[inaudible conversations] [inaudible conversations] good afternoon, everyone. Im carin bowen and a senior here the american enterprise. Well conclude this series. We are also us a grateful to the Bradley Foundation of milwaukee wisconsin, supporting this lecture series for more than a quarter century. When peter schuck giving a electric noor washington about hit new book, one nationen decide, Clear Thinking about five hard issues that divide us, we jumped the chance for peteer is one of the cleese expose thoughtful legal and policy scholars of this and or in the generation, a Professor Emeritus of law at jail and an aei visiting scholar in 1979, the year i arrived at aei. The author of among many other books, why government fails so often and how it can do better, understanding america, the institutions and policies that shape america in the world, and then coed it with our colleague, wilson, and finally, meditations of a militant bloggerrist, cool news on hot topics. Tonight copies of the new book will be available for purchase and he will sign them in this room. Join us for a reception after the lecture and questions answer period. One more House Keeping detail. Were taking questions from the audience online. If you want to submit a question for consideration go to slido. Com and enter code aei event. Its very simple, enterrure name, nine your question and we may choose to read. Testimony peter will discuss three of the five issues that currently divide us, poverty, integration, and religious exemption from secular public policies. He reminds us that we have argued about these for are so long that their contures are well known and will give us a sense of what makes the issues hard, why todays hard issues are almost harder by definition, and explain what Clear Thinking on each one entails. After last weeks debacle on health care its clear we need hard thinking on policy issues. Ick i can think of no better guide than peter schuck. [applause] thank you very much, and to the aei staff, and to folks who have decided to spend a beautiful Late Afternoon inside with me. Its a brand new book and this is not the first become ive written that aei has been gracious fluff to host a become event for so im very grateful for them, to them, for doing that. The title one nation undecided. Clear thinking about five issued that device it emphasizes three urgent can bees. First the deep divisions within our society. I dont have to belabor the opinion. I dont know whether we have ever been as polarized as we are now since the civil war, and it is an extraordinary extraordinarily difficult time in our political system. The second urgent condition is the need for Clear Thinking, which is related to the first. By Clear Thinking i mean five basic elements first, ones analysis needs to rest on a clear factual record so the factual information on which we make our decisions or think about these issues is accurate, timely, and its unbiased. Secondly, a Clear Thinking person analyzes the relevant values and these issues one aspect of their hardness is that they implicate a number of values and theyre often conflicting values. A third element of Clear Thinking is that the analysts needs to consider the likely consequences of various policy choices that are under consideration, and that entails a very hardnosed view of mobile globalizing whatever social science there is to predict the consequences and follow them where they lead. The fourth element of Clear Thinking in my view, is that it identifies relevant distinctions and tradeoffs, and has those clearly in mind. Without blinking the reality of these tradeoffs but take them serious and i understanding the tradeoffs often reflect conflicting values and conflicts ways of reading the evidence. And then the fifth element of Clear Thinking is to prefer the policy options which are most Cost Effective and implementable. I would also add that i say this in the book that process matters a lot, and by process i refer not only to process of formulating and adopting policy bus also the process for implementing whatever measures are adopted. Now, this is a technocratic way of thinking about policy, if you will. I do not find that a problem. I discuss in the book the moral objective to this technocratic way of thinking and i reject the objection in the q a i can get into that. Now, this is about Clear Thinking with respect to hard issues, so i explain what i moon by hard issues and i analyze five of them. What is most important about hard issues is that reasonable people can and do differ wife with respect to them though some prefer outcomes that are clearer than others in general is a says the book i dont care where people come out on these issues as long as they have thought them through in the manner that i suggest. The major exception to that, i would say, is affirmative action where i think the evidence is very, very clear that this is a failed policy, very divisive policy, and really helps no one except the relatively few beneficiaries of affirmative action who are already by and large privileged within their group. But im not going to discuss affirmative action today. Asked what you would most be interested and she suggested that i focus on poverty, immigration, and religious exemptions to secular policies. So let me begin with poverty. I should say that i had to submit the manuscript before the brookings aei report on poverty came out, but i had access to most of the work that went into that report, and i cite it and use it in my analysis. In the chapter on poverty i also discuss inequality for a couple of reasons. First to distinguish it from poverty. The folks in this audience i suspect understand theyre two very different things, one being poverty being an absolute level of deprivation and inequality being relative concept comparing one group of people to other groups of people. But there is in the public mind, i think, a lot of confusion about the distinction so i an analyze inequality and explain some of its measures and trends, and then i turn to poverty itself. So, poverty involves a wide range of difficult questions, analytical questions. Obvious i dont need to say that it involves terrible conditions of life for people who suffer from it, but that only makes the importance more important. They need to define it clearly and rigorously. So the first issue is having to define it. Second issue is how to measure it. And the let me pause on that. The measurement of poverty has been a much controverted issue from the very outset of the establishment of the office of Economic Opportunity in 1964. The official poverty measure, which we still use today, was has been based on this measure developed by a woman the Social Security administration. She recognized at the time that it was very inadequate measure of policy, very actually uninformative in most respects, but since then almost everybody who discusses and analyzes policy agree its no a good measure. The real question is what adjustments should be made to the official poverty measure. And some of ill just tick off adjustments for which theres a very strong argument and which have a very profound affect on what the poverty numbers are. The first is whether to include noncash transfers from the government, and the needless to say, food stamps, now under the s. N. A. P. Program, and Health Care Entitlements and the earned income tax credit and Child Welfare the Child Tax Credits and so forth. These are important additions to aftertaxed income that need to be taken account of. Second is the earned income tax credit which is of course a government transfer but extremely important for working families, and makes a big difference in the level of poverty that they endure. If i can put in a personal plug issue wrote an article with economic friend way back when i was a graduate student, arguing for a the precursor of the around income tax credit and its one of the most successful programs if not the most successful program, apart from Social Security, that affect the lives of poor or near poor people. Consumer price index overstates the cost of constant standard of living and that is an adjustment that most analysts believe needs to be made. The census treats cohabiting couples differently than married couples and that also can make a difference in the result of the calculation. It does not take into account regional differences in the standard of living. It doesnt take account of the fact that poverty for many people, for many poor people, is episodic, doesnt continue throughout the year but they have a certain periods of poverty during the year. Doesnt take account of smaller household size, since 1964. It doesnt take cant of parttime workers who receive Unemployment Insurance for the periods of their unemployment or many period of unemployment. Doesnt mention the take account of the refundable Child Tax Credit and then very important factor is the reliance of the census bureau, not surprisingly, on the selfreporting of income and other elements of the calculation by the individual inside question. Some very Important Research hat been done about whether those figures, the selfreporting, are consistent with the actual dispersements the Government Agencies to make to people who are eligible for these benefits and theres a big, big difference. So, thats a serious of adjustments. Then theres a different conception of the appropriate measure of poverty which is based on the consumption of good and services by poor people, and nicholas eversad who may be here has done a lot of work on measuring the consumption changes over time and theyre substantial. The standard of poor people today is much better than it was in 1964. Needless to say im not sawing i would change places with people who are in this condition, but an objective analysis of how many there are, what the trends are, what their prospects are, needs to be based on this kind of study. So, if you look at housing, food, cars, appliances, health care, crime, and even obesity, the plight of people who are denominated poor in the official calculations is much better than it ever has been. Then theres subgroups of americans whose poverty is especially concerning to us and ought to be especially concerning. The children. The Child Poverty rate is about 20 without the adjustment is mentioned before. If you add in those adjustments its down to 15 , which is still a really appalling figure in a country as wealth ya y as ours, the elderly poverty rate is 9. 8 without the im are so dish without the adjustment and 2. 6 with the adjustment. So theres a almost a quarter what it would be under the official measure. Then very interesting complication in the analysis of poverty is immigrants. Immigrants have an enormous increase in their wellbeing and their income measured in any way by reason of their coming to the United States, and yet many of them remain poor and so one might question whether we should think of them in the same way we think of americans who are poor. As one analyst put it, its as if we absorbed a Large Population of the third world and didnt expect that to affect the poverty rate, but coupled with the realization that they actually have benefited enormously from coming to the United States. So thats a complication. Another feature of the Poverty Analysis has to do with intergenerational mobile on which the u. S. Used to be a world leader and now in the middle of the pack, and a very troubling statistic i discuss in the book is that 40 of the grown sons born to fathers who are in the lowest quinn tile remain the lowes quintile. So democracy is deafening and if youre born to a father who was very poor, theres some very good chance you not a overwhelming chance but a very good chance youre going to be poor as well. Much of the discussion of poverty relates to black, and i discuss why thats the case and why much of this discussion can be very misleading. Actually the poverty rate is slightly lower than that of native americans native americans and alaskan natives, but more important point is that 75 of blacks are not poor. So, the kinds of generalizations immigrations we form are unfortunately quite inaccurate, though it the case that many, too many blacks are born into mother, well remain in poverty. The most important conclusion that i think analysts analysts y have come to in trying to determine what the trend is, is that today the class gap is even greater than the racial gap. That is to say this is a most unfortunate and deplorable condition the best predictyear of poverty is being been to unmarried mothers and absent fathers. Thats the single best predicter. Not race, not where you live. Its the accident of birth. There has summon good news in the poverty picture. The 2015 poverty rate declined sharply for all groups, teenage pregnancy is down by over 50 since 1991. High School Completion is up where if with the blackwhite gam in graduation closing. Its now 85 . The divorce rates have stabilized, though of course as we all know at a very high level, much too high, i think for the wellbeing of children. And crime has dropped in all communities over the last 20 years or so. So, having measured explained the measures and adjustments and the Statistical Patterns of poverty, i next turn to the causes of poverty, and there are many, of course. The main proximate cause is, as has been emphasized by brookings and aei scholars, is underemployment and unemployment. By working age, nondisabled family heads. What causes this underemployment and unemployment . Well, i go through a number of causes in some detail. This first is bad luck. Now, how we define luck is of course a question that reasonable people can differ about, but some of it is i think bad luck, misfortune by any standards. Poor people, many poor people are poor because of a Health Problem that they could not really anticipate. Some are especially women are poor often because of divorces. Their standard of living declines Something Like 25 in first year after a divorce whereas mens standard of living increased by 10 the first year after divorce. Its kind of a shocking comparison to me. 72 of babies thats the bad luck. Have nor to say about it but ill move on to family and Community Breakdown which is the single most important cause of the underand unemployment by working age, nondisabled family heads. 72 of black babies born out of wedlock today thats triple the rate in 1965. Triple the rate that it was when Daniel Patrick moynihan famously decried the chaos and crisis of of black families and the white rate of babies born out of wedlock is higher than the black rate when moynihan conducted his analysis in 1965. So an extraordinarily devastating development. And unfortunately a development that we dont seem to know very much about solving. Its not for want of study and effort. Its a really, really hard problem. A third cause of poverty is disappearing jobs. Here i again i have a lot to say itch discussion William Julius wilsons analysis and his concerns about disappearing jobs. Very interesting finding, kind of shocked me is how low a personal of working age unemployed men cite as the reason for their unemployment lack of jobs. Now, some of these people are disabled but when i come to discussion of disability i will have something more to say about that. A fourth of possible causes, although certain lay accuse, is educational deficits. But here its important to emphasize what we often forget, which is that while were blaming poor schools, we really ought to realize that in fact the deficits that exist in childrens opportunities and achievement begins well before they start in school. Ill have a bit more to say about that, including something about jim heckmans analysis of the problem. So, i talk about bad luck, family and Community Breakdown, disappearing jobs, occasional deficit. A fifth is isolation. Here the sociology yeases have a lot of teach us. Many of you may be familiar with a famous network sociologist whose how written about the strength of weak ties but which he means the greater opportunities that are available to people who have a Large Network of weak ties instead of a Small Network of strong ties. So its a kind of paradox but easily explained. Orlando patterson has written about the misof the the mug of the hood and just the myth of the mood to summarize what the sociology e reported they black networks are smaller and denser and have the smallest percentage of kinsmen of any other group. Also very little outgroup major, especially on the for black women. So that isolation which limits opportunities, limits information, limits contacts, is very severe. A sixth possible cause is discrimination. In here i distinguish between month three different typed of discrimination, one is intentional, a second is unintentional and third is statistical. And lawyers in the audience will certainly be very much aware of those that distinction which us rye reacted in doctrine under title vii of the civil rights act. One complication is discrimination against based on race, religion, National Origin and gender but not on the basis poverty. And so poverty is not a protected classification, which means that it cant be attacked with the normal to the extent that discrimination is based on poverty, it cant be attacked in the normal fashion that civil rights will employs. Seventh cause of poverty is bad choices. Now, here one can easily be accuse ode accused of blaming the victim, but there are range of choices that we can reasonably characterize as bad. Some are antisocial behaviors an