About these issues. I think it is a mistake for us to suggest that somehow every effort we make has failed and we are powerless to address poverty. Thats just not true. First of all, just in absolute terms, the poverty rate when you take into account tax and transfer programs, has been reduced about 40 since 1967. Now, that does not lessen our concern about communities where poverty remains chronic. It does suggest, though, that we have been able to lessen poverty when we decide we want to do something about it. In every lowincome Community Around the country, there are programs that work to provide ladders of opportunity to young people, we just havent figured out how to scale them up. And so one of the things im always concerned about is cynicism. My chief of staff, Denis Mcdonough we take walks around the south lawn, usually when the weather is good, and a lot of it is policy talk, sometimes its just talk about values. And one of our favorite sayings is, our job is to guard against cynicism, particularly in this town. And i think its important when it comes to dealing with issues of poverty, for us to guard against cynicism, and not buy the idea that the poor will always be with us and theres , nothing we can do because theres a lot we can do. The question is do we have the political will, the communal will to do something about it. Joseph dionne jr. thank you, mr. President. I feel as a journalist maybe im the one representative of cynicism up here. I will try to do my job. I want to go through the panel and come back to you, mr. President. I want to invite bob, and im going to encourage us to reach for solutions. But before we get there, i think its important to say that your book, bob, your book, our kids, is above all a moral call on the country to think about all the kids in the country who have been left out as our kids, in some deep way. And you make the point that the better off and the poor are now so far apart that the fortunate dont even see the lives of the unlucky and the left behind. You wrote, before i began this research, i was like that. Following on what the president said, you insist that the decline in social mobility, the blocking of the American Dream for so many is a purple problem. And i may have some questions later on that, but i really would like you to lay out the red and blue components. And also, how do we break through a politics in which food stamp recipients are still somehow cast as privileged or the poor are demonized. But id like you to lay out sort of the moral call of your book. Robert thanks to the president and to arthur for joining me in this conversation. I think in this domain theres good news and bad news, and its important to begin with the bad news because we have to understand where we are. The president is absolutely right that the war on poverty did make a real difference, but it made a difference more for poverty among people of my age than it did for poverty among kids. And with respect to kids, i completely agree with the president that we know about some things that would work and things that would make a real difference in the lives of poor kids, but what the book that youve deferred to, our kids, what it presents is a lot of evidence of growing gaps between rich kids and poor kids, that over the last 30 or 40 years, things have gotten better and better for kids coming from welloff homes, and worse and worse for kids coming from less welloff homes. And i dont mean bill gates and some homeless person. I mean people coming from collegeeducated homes their kids are doing better and better, and people coming from high schooleducated homes, their kids arent. And its not just that theres this class gap, but a class gap on our watch i dont mean just the president s watch, but i mean on my generations watch that gap has grown. And you can see it in measures of family stability. You can see it in measures of the investments that parents are able to make in their kids, the investments of money and the investments of time. You can see it in the quality of schools kids go to. You can see it in the character of the social and Community Support that kids rich kids and poor kids are getting from their communities. Church attendance is a good example of that, actually. Churches are an important source of social support for kids outside their own family, but Church Attendance is down much more rapidly among kids coming from impoverished backgrounds than among kids coming from wealthy backgrounds. And so i think what all of that evidence suggests is that we do face, i think, actually a serious crisis in which, increasingly, the most important decision that anybody makes is choosing their parents. And if like my grandchildren are really smart, they were the best decision they ever made was to choose collegeeducated parents and great grandparents. But out there, someplace else, there is another bunch of kids who are just as talented and just as in principle just as hardworking, but who happened to choose parents who werent very welleducated or werent highincome, and those kids fate is being determined by things that they had no control over. And thats fundamentally unfair. It also is, by the way, bad for our economy, because when we have this large number of kids growing up in poverty, its not like thats going to make things better for my grandchildren. Its going to make things worse for my grandchildren. So this is, in principle, a solution that we a problem that we ought to find solutions to. And historically, this is a kind of problem that americans have faced before and have solved, and this is the basis for my optimism. There have been previous periods in American History when weve had a great gap between rich and poor, when weve ignored the least of these, in which weve im thinking of the gilded age at the end of the 19th century and both of you have written about that period, in which there was a great gap between rich and poor and we were ignoring lots of kids, especially lots of immigrant kids. And america seemed to be going to hell in a hand basket. And there was a dominant philosophy, social darwinism, which said that its better for everybody if everybody is selfish, and the devil take the hindmost. But that, unlike some of the ideology of ayn rand that you referred to but that period was quickly not quickly but was overcome by a real awakening of the conscience of america across party lines, with the important contribution of religious leaders and religious people, to the fact that these are all our kids. And now is not the time to rehearse all of the lessons of that earlier period, but i think it does actually give me grounds for hope. This is a kind of problem that we could solve as long as we all recognize that its in everybodys interest to raise up these poor kids and not to leave them in the dust. Joseph dionne jr. thank you very much. By the way, let the record show the president was not looking at arthur when he referred to coldhearted capitalists. [laughter] but it is nice to have somebody here from the aei. Brooks well, d. J. when the president said that, i was just thinking what was going through my head was, please dont look at me, please dont look at me. [laughter] but you notice when bob said this about the social darwinism, he pointed at me. So im more outnumbered than my thanksgiving table in seattle, let me tell you. Joseph dionne jr. you just have to look into your heart, arthur. And in fact, thats kind of what i want to ask you to do here. I mean, your views on these subjects have actually changed, and i think its one of the reasons you wanted to join us today. Back in 2010, you talked about makers and takers in society and a culture of redistribution. But in february 2014, you wrote a very important article and commentary the openhanded toward your brothers and you said we have to declare peace on the safety net, which i think is a really important thing to say. And as the president suggested, the safety net we have has actually cut poverty substantially. So twin questions could you talk about how and why your own views have changed if ive fairly characterized that. And in the spirit were celebrating here of transideological nonpartisanship now, theres a mouthful for you in that spirit, where can republicans cooperate with democrats, conservatives with liberals, on safety net issues like making the earned income tax credit permanent or expanding the Child Tax Credit . I mean, where can we find not just verbal Common Ground, but actual Common Ground to get things done for the least among us . Arthur c. Brooks thank you, e. J. And thank you, mr. President. Its an honor to be here and with all of you. This is such an important exercise in bringing catholics and evangelicals together, but having a public discussion. One of the main things that i do as president of aei is to talk publicly about issues and start a conversation with my colleagues in a way that i hope can stimulate the conversation and spread it around the country. At the American Enterprise institute where we have a longstanding history of work on the nature of american capitalism when were focusing very deeply on poverty, it sends a signal to a lot of people that are deeply involved in the Free Enterprise movement. My colleague, robert doar is here he came to aei because poverty is the most important thing to him. And indeed, the reason i came into the Free Enterprise Movement Many years ago is because poverty is the thing i care about the most. And in point of fact, 2 billion people around the world have been lifted up out of poverty because of ideas revolving around Free Enterprise and free trade, and the globalization of ideas of sharing through Property Rights and rule of law, and all the things that the president is talking about in policy debates right now. Thats why im in this particular movement. But weve gotten into a partisan moment where we substitute a moral consensus about how we serve the least of these, our brothers and sisters, where we pretend that that moral isferences instances impossible and we blow up policy differences until they become a holy war. Thats got to stop because its completely unnecessary. [applause] and we can stop that, absolutely, with a couple of key principles. So how are we on the center right talking about poverty in the most effective way . Number one is with a conceptual matter. We have a grave tendency on both the left and the right to talk about poor people as the other. Remember in matthew 25, these are our brothers and sisters. Jim olsen and i have this roadshow we go to campuses and everybody wants to set up something, rightleft debates, and it never works out, because it turns out we both have a commitment to the teachings of the savior when it comes to treating the least of these, our brothers and sisters. When you talk about people as your brothers and sisters you dont talk about them as liabilities to manage. Theyre not liabilities to manage. Theyre assets to develop because every one of us made in gods image is an asset to develop. Thats a completely different approach to poverty alleviation. Thats a Human Capital approach to poverty alleviation. Thats what we can do to stimulate that conversation on the political right, just as it can be on the political left. One concept that rides along with that is to point out and this is what i do to many of my friends on capitol hill i remind them that just because people are on public assistance doesnt mean they want to be on public assistance. And thats the difference between people who factually are making a living and who are , accepting public assistance. Its an important matter to remember about the motivations of people and humanizing them. And then the question is, how can we come together . How can we come together . I have, indeed, written that its time to declare peace on the safety net. And i say that as a political conservative. Why . Because Ronald Reagan said that, because Friedrich Hayek said that. This is not a radical position. In fact, the social safety net is one of the greatest achievements of Free Enterprise that we could have the wealth and largesse as a society, that we can help take care of people who are poor that weve never even met. It is a historic, its never happened before. We should be proud of that. But then when i talk to conservative policymakers, and say how should you distinguish yourself from the traditional positions in a marketplace of ideas from progressives, you should also talk about the fact that the safety net should be limited to people who are truly indigent, as opposed to being spread around in a way that metastasizes into middleclass entitlements and imperils our economy. And the third part is that help should always come with the dignifying power of work to the extent that we can. Then we can have, with these three ideas declaring peace on the safety net, safety net only for the indigent, and always with work then we can have an interesting moral consensus and policy competition of ideas and maybe make some progress. Joseph dionne jr. thank you. In fact, im hoping people will challenge each other about what that actually means in terms of policy. And i want to invite the president to do that. Im tempted, mr. President , to ask you to sort of go in a couple of directions at once. One is, i am, again, hoping that you can enlist arthur as your lobbyist on this. One kind of question i want to ask is if john boehner and Mitch Mcconnell were watching this and suddenly had a conversion and there are a lot of religious people in the audience, so miracles barack obama i assure you theyre not watching this. But its a hypothetical. E. J. Dionne it is a religious audience they believe in miracles. They were persuaded that it is time we do something about the poor. Tell us a few things that will pass. When you think about we can talk abstractly about the family on this side and what government can do, what do you think would make a difference . That is one question i intended to ask and maybe you could put that in the context of bobs mention of the gilded age. I was taken by that. Help me. President obama a couple of years ago. E. J. Dionne it did put this conversation in context where we seem to be having the problems we had back then. What would you tell congress, please help me on this and how do we move out of this gilded age feeling . President obama let me tease out a couple things what bob and arthur said and challenge them. They may want to respond. Let me talk about big picture and then we can talk about specifics. First of all, i think we can stipulate that the best Antipoverty Program is a job, which brings income, structure, dignity and a sense of community. We have to spend time thinking about the macroeconomy, the broader economy. What has happened is, since 1973, over the last 40 years, the share of income going to the bottom 90 has shrunk from about 65 to 53 . A big transfer. We cannot have a conversation about poverty without talking about what has happened to the middle class and the latters of opportunity into the middle class. When i read bobs book, the first thing that strikes you is, when hes growing up in ohio, he is in a community where the banker, living in proximity to the janitor at the school, the janitors daughter may be going out with the bankers son. They may attend the same church, the a member of the same rotary club. They maybe active at the same parks. All the things that stitch them together contributes to social mobility and a sense of possibility and opportunity for all kids in that community. Now, part of what has happened and this is where arthur and i have some disagreements. We do not dispute that free market is the greatest producer of wealth in history, it has lifted millions of people out of poverty. We believe in Property Rights, rule of law, so forth. But, there has always been trends in the market in which concentrations of wealth cant lead to some being left behind. What has happened in our economy is that those doing better and better, more skilled, more educated, luckier, having greater advantages, are withdrawing from the commons, kids to private schools, kids start working at private clubs instead of the public parks. An antigovernment ideology that disinvest from those common goods and things that draw us together. That, in part, contributes to the fact that there is less opportunity for all of our kids. That is not inevitable, a free market is compatible with making investment in good Public Schools, public universities, investment in public parks, a whole bunch Public Infrastructure that grows our economy and spreads it around. That has been under attack. Rather than soften the edges of the market, turbocharge it. We have not been willing to make those common investments so that everybody can play a part in getting opportunity. One other thing i have to say about this even back in bobs day, that was happening, just not to black people. In some ways, part of what is changed is that those bias or restrictions to who had access to resources that allowed them to climb out of poverty who had access to the firefighters job . Who had access to the Assembly Line job, the bluecollar job that pays well enough to be in the middle class and guide you to the suburbs and the next generation was Office Workers . All those were closed to a big chunk of the minority population in this country for decades. That accumulated and built up. People with less resources, more strains, it is hard being poor. People do not like being poor, it is timeconsuming, stressful, it is hard. Over time, families afraid, men who could not get jobs left, mothers single not able to read as much to their kids. That was happening to africanamericans and that we are seeing those same trends have accelerated and are spreading to the broader community. The pattern is no different in your stories, when William Julius talk about the truly disadvantaged. I know that was not an answer to your question [laughter] i will answer, but i think it is important to a knowledge, if we are going to find Common Ground, we have to realize we there are investments we are willing to make as a society as a whole in Public Schools and public universities. Today, i believe Early Childhood education. In making sure that Economic Opportunity is available in communities that are isolated. And that somebody can get a job and there is a train that takes folks to where the jobs are. That broadband lines are in Rural Communities and not just in cities. Those things are not going to happen through Market Forces alone. If that is the case, then our government and budgets have to reflect our willingness to make those investments. If we do not make those investments, we could agree on the earned income tax credit, which i know arthur believes in, we could agree on home visitation for low income parents, all those things will make a difference, but the broader trend in our society will make it harder and harder for us to deal with old inequality and poverty. I think it is important for us to recognize, there is a genuine debate, that is what portion of our collective wealth and budget are we willing to invest in those things that allow a poor kid, whether in a rural town or in appalachia or the innercity to access what they need, oh in terms of mentors and social networks, as well as these and books and computers and so forth. In order to succeed along the terms that arthur discussed. Right now, they do not have those things and they have been stripped away. Look at state budget, city budgets, and federal budgets, we do not make those same common investments we used to and it has had an impact. We should not pretend that, somehow, we had been making those same investments, we have not been. There has been a specific ideological push not to make those investments. E. J. Dionne it gets to the underlying problem where we talk about lets tear down these ideological barriers, but they get rejected. How do you change the politics of that . You said Mitch Mcconnell and john boehner were unlikely to be watching us, that has a political significance. President obama they have votes. E. J. Dionne how do you tear down those barriers . You laid out a robust agenda. How do you get from here to there . President obama part of what happened in our politics, and part of what shifted from when bob was younger and seeing a genuine community. There was still Class Divisions in your small town here they were probably certain clubs or activities that were restricted to the bankerss son as opposed to the janitors son. We are able to live together, away from folks who are not as wealthy. They feel less of a commitment. To making those investments. In that sense, what used to be racial segregation, now mirrors itself and classic segregation. This great sorting that has taken place creates its own politics. There are some communities where i do not know not only do i not know poor people, i do not know people who have trouble paying the bills at the end of the month. I do not know those people. There is less sense of investment in those children. That is part of what is happening. Part of it has to there has always been a strain in american politics, where you have the middle class, and the question has been, who are you mad at if you are struggling . If you are working, but do not seem to be getting ahead. Over the last 40 years, sadly, there has been an effort to either make folks mad at folks at the top, or be mad at folks at the bottom. I think the effort to suggest that the poor are sponges, leeches, do not want to work, are lazy, are undeserving, got traction. Look, it is being propagated. If you watch fox news on a regular basis, it is a constant menu they will find folks who make me mad. I do not know where they find them. [laughter] i just want a free obama phone. [laughter] that becomes their entire narrative. They get worked up. Very rarely do you hear an interview of a waitress much more typical, raising kids and doing everything right, but still cannot pay the bills. If we will change how john boehner and Mitch Mcconnell think, we will have to change how our body of politics thinks, which means changing how the media reports on these issues. How peoples impressions of what it is like to struggle in this economy looks like. How budgets connect to that. That is a hard process, because that requires a much broader conversation than typically we have on the nightly news. E. J. Dionne i am tempted to welcome arthur to defend his network, but instead i want to invite him to [laughter] i want to invite you to the altar call, the president talked about basic public investments, that are oldfashioned. Along the lines of somebody like president eisenhower supported. President Obama Abraham lincoln thought landgrant colleges and infrastructure, investments in basic research was important. I suspect, arthur, you would agree in theory about those investments, then the question would be, how much . Arthur brooks no selfrespecting person denies there are public goods, there are public goods. We need public goods, markets fail from time to time. There is a role for the state, there are no radical libertarians. The veterans who believe the state should not exist. Libertarians who believe the state should not exist. We should not caricature the views of others. What we are talking about is, when are the public good, when can the government provide them and when are the benefits higher than the costs of the government providing these things . When we do not make costbenefit activations at the macro level, the poor pay. If you look at what is happening in the periphery countries in europe, as george w. Bush used to say, this is a true fact. [laughter] it is more emphasis, there is nothing wrong [laughter] if you do not Pay Attention to the Macro Economy and the fiscal stability, you will become insolvent and you will have austerity and if you have austerity, the poor pay. The rich never pay, they are never left with the bill. If you join me in believing in the safety net is a fundamental moral right and privilege of our society to provide, you must avoid austerity and you must avoid insolvency, and the only way is by smart policies. I am 100 sure the president agrees with me. Can you believe he said obama phone . [laughter] and he is against the obama phone. [laughter] only because they took away his phone. Since we believe there should be public goods, we are talking about the system that provides them efficiently. The president talked about the changing structure of the Income Distribution and it is true. What i would urge us to regret is this notion that it is not a shift, but a transfer. The rich have not gotten richer because the poor have gotten poorer, they are not having their money taken away and given to the rich, we might be concerned with that because that reflects on opportunity. As an opportunity society, equal opportunity society, we should be concerned with that. To the extent we should get away from this notion that the rich are stealing from the poor, then we can look at this in a way that is constructive. Why because the rich are our neighbors and the poor are our neighbors. Getting away from that rhetoric is important. Lastly, as we come to consensus, is removing that capitalism or socialism or social democracy or any system is just the system. It is just a machine. It is like your car, you can do great good or great evil with it. They cannot go uninhabited so far, it cannot ride on its own. The economy never will be able to. Capitalism is a system and it must be predicated on right morals. It must be. Adam smith taught me that. The father of modern economics, wrote the wealth of nations. 17 years before, he wrote the theory of moral sentiments, a more important book, because it talked about what it meant as a society to earn the right to Free Enterprise. It is true today. This is why this conference is important. From my point of view. Because we are talking about right morality towards our brothers and sisters, and built on that, that is when we can have an open discussion to get our capitalism right and then the distribution of resources is a tertiary question. E. J. Dionne i want to know how much infrastructure you are willing to vote for . Arthur brooks 41 billion. E. J. Dionne this is for president the president and bob. In this conversation about poverty, there is a consensus on the stage that you need to care about Family Structure, it really matters. If you do not worry about the economy, youre not thinking about why the battering rams against the families. The family conversation can make a lot of people feel uneasy, because it sounds like you are not taking politics seriously or youre not taking the real economic pleasure seriously. I want to share two things with the president and bob and have you respond. One, i ask a lot of smart people, what they would ask if they were in my position. One smart economist said, what we know is when we have tight labor markets, unemployment down below 4 or lower. Maybe this person said, even though he said, Family Structure matters, lets stop with the moral lectures and run a tight Economic Policy and have good things happen to us. The other thing i want to share i am being pointed, because you know and i have heard you talk about this, not that often, publicly, i have heard you in other sessions you do with opinion reporters. Something was written in 2013 about your talk about what needs to happen inside the africanamerican community. It is hard to avoid the conclusion that this white house has one way of progressing the social ills that afflict black people, particularly black youth and addressing everyone else. I would have a hard time convincing the president of barnard that there is no longer room for any excuses as though they were in the business of making them. Maybe it is about economics primarily, because we cannot do much about the other things through government policy. Answer the critique. I know you hear that a lot. Robert putnam i will try to respond to that. I want to comment briefly on that earlier conversation about public goods. I agree with the president s framing of the issue and that we have just invested in collective assets that would benefit everybody, but are more important for poor people because they cannot do it on their own. I want to give one example, where we have shot ourselves in the foot, for most of the 20th century, all americans thought that part of getting a good education was getting soft skills, not just reading and writing and arithmetic. Part of that was everybody in the country got free access to extracurricular activities, band, football, and music. Beginning about 20 years ago, a view developed that is evil that that is a frill. We say, if you want to take part in music and football, you have to pay for. Then poor people cannot pay for it. 1600 on average for to get in a family, to play football or play in the band, or the french club, not a big deal if your income is 200,000, but if your income is 16,000, who would pay . It seems like the benefits, of learning teamwork and hard skills grit, were only on the individual, that was not true, the whole country was benefiting from the fact that we had a broadbased set of skills. I am trying to emphasize how the runs this antipathy in some quarters that these are all our kids and we have to invest in all of them. I want to come back to the thing we have not spent enough time on, this is a purple problem. Those of us on the left can see most clearly the economic sources of this problem and want to do some thing about it. There are people on the conservative side, who use a different lens and can see most clearly the effects of family disruption among poor families of all races on the prospect of kids. And the stories of kids we gathered across america, i want to return not just the abstract discussion, but to real kids. But, part of that is because marys parents paid in irresponsible ways. We interviewed a kid from duluth who is now on drugs, how did you get on drugs her dad was addicted to meth and wanted to get high, but did not want to get high alone, so her dad taught molly how to do meth. I dont even know how to do it. I have to check. We all know this. I am not making an attack on single moms who are often doing terrific jobs in the face of lots of obstacles, but i am saying it is harder to do that and therefore we need to think, all of us, even those on the more Progressive Side have to think, how did we get into a state in which two thirds of American Kids have only a single parent and what can we do to fix that . Im not sure it is the governments role. All of us have to think about this purple side of the problem if we are concerned with poverty. This family side of the problem. Those of us i am now speaking to my side of the choir, we should not assume that anybody who talks about family stability is somehow saying that the economics dont matter of course they matter. [applause] president obama a couple of things i would say. Going back to something arthur said. About how we characterize the wealthy and do they take this extra wealth from the poor, middle class . These are broad economic trends. Turbocharged by technology and globalization. A winner take all economy that allows those with even slightly better skills to massively expand their reach and markets and they make more money and it gets more concentrated and it reinforces itself. There are values and decisions that have aided and abetted that process. For example, in the era that bob was talking about if you had a company in that town, that company had a whole bunch of social restraints on it. The ceo felt he was a member of that community. The sense of obligation about paying a certain wage, or contributing to the local high school, was real. Today, the average fortune 500 company, some are great corporate citizens, some are great employers, but they do not have to be, and that is not how they are judged. That may account for the fact that, where a previous ceo might have made 50 times the average wage of the worker, they might now make 1000 times or 2000 times. That is accepted fact inside the corporate boardroom. That is not because theyre bad people, they have been free from a certain set of social constraints. Those values have changed. Sometimes tax policy has encouraged that and government policy has encouraged that. There is a whole literature that justifies that, that is what you need to get the best ceo and they are bringing the most value and then you do get into that ayn rand, which, arthur, you would acknowledge, if they are not on a panel, they will say, we created all the stuff and we made it and we are creating value. We should be able to make decisions about what goes. There is less commitment to those public goods, even though a good economist has read adam smiths moral sentiments, wont acknowledge that we are underinvesting or need a certain investment. Point number two on this whole family values structure issue it is true that, if i am giving a commencement at morehouse, i will have a conversation with young black men about taking responsibility as fathers that i probably will not have with the women of barnard. I make no apologies for that. The reason is because i am a black man who grew up without a father. I know the cost that i paid for that. I also know that i have the capacity to break that cycle, and as a consequence, i think my daughters are better off. [applause] that is not something that that is not something for me to have that conversation does not negate my conversation about the need for Early Childhood education or the need for job training, or the need for greater investment in infrastructure, or jobs in low income communities. I will talk till you are blue in the face about hardnosed economic policies. In the meantime, i have kids right now graduating, and i want to give them some sense that they can have an impact on their immediate circumstances and the joys of fatherhood. We did something with my brothers keepers, which emphasizes apprenticeships and corporate responsibility, and we are gathering resources to give concrete hooks for kids to be able to advance. I am going very hard at issues of criminal Justice Reform and breaking this schooltoprison pipeline that exist for so many young africanamerican men. When im talking to these kids and i have a boy who says, how did you get over being mad at your dad, because i have a father that beat my mom and has left . And has left the state and i have never seen him because he is trying to avoid 83,000 in Child Support payments. I want to love my dad, but i do not know how to do that. I will not have a conversation with him about macro economics. [laughter] [applause] im going to have a conversation with him about how i tried to understand what it is that my father had gone through. How issues of that were specific to him, created his difficulties in his relationships with his children, so that i could forgive him. This is what i mean this is where i agree with bob, this is not an eitheror conversation. The reason we get trapped in these conversations is because too often, not arthur, but those who have argued against a safety net, or argued against government programs, have used the rationale that character matters, family matters, values matter, as a rationale for the disinvestment of public goods that took place over the course of 20 to 30 years. If the most important thing is character and parents, then it is ok if we do not have band and music and a School Computer that is the argument you will hear. There are immigrant kids who are learning at schools that are much worse and we are spending huge amounts in the district and we still get poorer outcomes, so oviously money is not the issue. You hear logic that is used as an excuse to underinvest in those public goods. Thats why i think a lot of people are resistant. And are skeptical of that conversation. What i am saying is, guarding against cynicism, what we should say is, we are going to argue hard for those public investments. We will argue hard for Early Childhood education, because, if a young kid, 3, 4 years old is hearing a lot of words, science tells us they will be more likely to succeed at school and if they have trained and these only paid teachers in that preschools decently paid teachers, by the time they are in third grade, they will be reading at grade level. We will argue hard for that money. If we do those things, the values and the characters those kids are learning in a loving environment, where they can succeed in school and being praised and read at grade level, and they are less likely to drop out. It turns out, when they succeed at school, a are less likely to get pregnant as teens and less likely to engage in drugs and less likely to be involved in the criminal justice system. That is a reinforcement of the values and characters we want. That is where we, as a society, have the capacity to make a real difference. It will cost us some money. It will cost us some money. It is not free. You look at a state like california, it used to have by far the best Public Higher Education system in the world. There is a direct correlation between proposition 13 and the slow this investment in the Public University system, so it became expensive. And kids got priced out of the market. Or they took on a whole bunch of debt, and that was a Public Policy choice. Based on folks not wanting to pay property taxes. That is true in cities across the country and states across the country. That is a big part of our political argument. I am all for values and character, but i also know that the values our kids have that allow them to succeed, discipline and hard work, all those things and part are shaped i what they see. What they see early on. Some of those kids, because of no fault of those kids, and history, and some tough going generationally, some of those kids are not going to get help at home. The question becomes, are we committed to helping them . E. J. Dionne i want to follow up on that, mr. President. A lot of us feel that we made bargains with our friends on the conservative side, i agree with the idea that you have to care about what happens in the family if youre going to care about social justice and you have to care about social justice if you care about the family. Yet, when people like you Start Talking like this, there does not seem to be much give back on, ok, we agree on these values, where is the investment in the kids . When welfare reform was passed in the 1990s, there were a lot of people who said, we will not hear about welfare cheats anymore because all these people will have to work. We get the same thing again, it is as if the work requirement was never put in the welfare bill. How do we change this conversation so it becomes an actual bargain where the other half of the agenda you talked about gets recognized and we do something about it . President obama i will ask arthur for advice on this. The devil is in the details. If you talk to any of my republican friends, they will say, number one, they care about the poor, and i believe them. Number two, they say there are public goods that have to be made, and i believe them. When it comes to actually establishing budgets, making choices, prioritizing, that is when it starts breaking down. I think that there will come a time when political pressure leads to a shift, because more and more families, not just innercity africanamerican families or hispanic families, but more and more middleclass or workingclass folks are feeling pinched and squeezed. That there will be a greater demand for core public goods and we will have to find a way to pay for them. But, ultimately, they will have to be choices made. When i make an argument about closing the carried interest loophole that exists, Hedge Fund Managers are paying 15 on the fees and income they collect. I have been called hitler for doing this like hitler going into poland, that is an actual quote from a hedge fund manager. The top 25 Hedge Fund Managers made more than all the kindergarten teachers in the country. I am not saying that because i dislike Hedge Fund Managers or i think they are evil. I am saying that you are paying a lower rate than a lot of folks who are making 300,000 a year. You pretty much have more than you will ever be able to use in your life, and your family will be able to use. There is a fairness issue, and if we were able to close that loophole, i can invest in Early Childhood education that will make a different. That is where the rubber hits the road. That, arthur, the question of compassion and am i my brothers keeper comes into play. If we cannot ask from societys lottery winners to make that modest investment, this conversation is for show. If we cannot ask [applause] that is where by the way, i am not asking to go back to 70 marginal rates, which existed in the golden days that bob is talking about when he was a kid. Im just saying, maybe we can go tax them like ordinary income, which means they might have to pay a true rate of around 23 to 25 , which, by historical standards, postwar era and would be low. If we cannot bridge that gap, we will not make as much progress as we need to. Although we can find some areas of agreement like the earned income credit, which i give arthur credit for extolling, because it could strengthen families. Arthur brooks these are show issues, corporate jets are show issues. The real issue, middleclass entitlements. 70 of the federal budget, that is where the real money is. Until we can take that on, if we want to make progress, the left and right want to make progress as they put together budgets, they will have to make progress on that. If we want to increase taxes on carried interest, that is fine for me. Not that i can speak for everybody, certainly not everybody on the republican side. By the way, Mitch Mcconnell and john boehner are watching, at least indirectly and paying attention. They care a lot about this. They care a lot about culture and economics. They care about poverty. We have to be careful not to impugn the motives and imputing motives on the other side is the number one barrier against making progress. We should declare war on that and defeat it. Then we can take on issues. It is important for us to do that. Who, by the way, are you are having dinner with, when youre discussing ayn rand, and why was i not invited . [laughter] lets decide that we have a preference a rumble over how much money we are spending on public goods for poor people. Republicans should say, i want to spend money on programs for the poor, but i think these ones are counterproductive and these once ineffective and democrats should say, no or not, we have never done them right and they have always been underfunded. We cannot get to that when politicians are conspiring not to touch middleclass entitlements. We are looking at it in terms of the right saying all the money is gone, and the left saying, we just need a lot more money on top of these things, when most people looking at it realized that this is an unsustainable path for lots of things, not just programs for the poor, we cannot adequately fund our military. We would have a tremendous amount of agreement about the misguided notion of the sequester. For lots of reasons, because we cannot spend money on purpose. That is what we need to do. An automatic path to spend tons of money in entitlements that are leading us to physical and sustainability, we cannot get to these aggressive conversations where conservatives and liberals agree and Work Together to help poor people and defend our nation. E. J. Dionne if they carry interest why cant we just move on . Heres what i would like to do. I would like bob to speak and i have one last question for the president. Robert putnam we need to rise out of the washington bubble. We are speaking to an audience of people of faith, largely to america. I think we should not disempower ordinary americans, if they care about these problems, americans can change the politics that would, over the next five to 10 years, make a huge difference, im not talking about changing republicandemocrat, making poverty and the opportunity to escape from poverty a higher issue on both parties agendas. [applause] i have hope that will happen. This may not be true, i understand there will be an election next year. President obama that is a true fact. [applause] [laughter] Robert Putnam i think american
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