[inaudible conversations] good afternoon, everyone. I karlyn bowmanim karlyn bowmar fellow at the American Enterprise institute and i would like to welcome all of you and the cspan audience to this lecture by peter schuck. This will conclude 20162017 bradley lecture series. We are as always grateful to the lives of milwaukee Wisconsin Foundation that supported the lecture for more than a quartercentury. When peter emailed me and colleagues to say he might be able to give a lecture about his new book, one nation undecided Clear Thinking about bipartisanship that divides us we jumped at the chance for he is one of many academic. But professor of law at yale he reminded me that he was an aei visiting scholar in 79. Hes the author of why government fails so often and how it can do better, understanding the institutions and policies that shape america and the world and it collaborated with the late james q. Wilson. And finally, the moderate, cool news on hot topics. To find out copies of the new book will be available for purchase and he will sign them in this room. We invite all of you to join us for a reception after the question and answer period. One more detail. We will be taking questions from the audience online. If you would like to set it a question, enter the code aei event. Its simple, your name, question and we may choose to read it on stage. Peter will discuss the nations that divide us, poverty, integration and religious exemptions from secular Public Policies. He reminds us weve argued about these issues for so long they are well known. He will tell us what makes them hard and have the issues are almost harder by definition and explained the Clear Thinking on each one. After last weeks debacle in healthcare is more than clear that we need Clear Thinking about these issues and i can dig up no one better for the landscape of these issues. Please join me in welcoming peter. [applause] thank you very much to the staff and folks that decided to spend a beautiful afternoon inside with me. It is a brandnew book and this is in the firsisnt the first be written that aei has been gracious enough to host a book event for, so im very grateful to them for doing that. The title, one nation undecided is cumbersome but it emphasizes three conditions, first in the conditions where there are societies and i dont have to belabor the point. I dont know whether we have ever been as poor since the civil war and it is an extraordinary difficult time in our political system. The second condition is the need for Clear Thinking which is related to the first. By Clear Thinking, i mean five basic elements. First, the 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 and timely and unbiased. Second, they Clear Thinking person analyzes the relevant values and one of the aspects is they implicate a member of values and they are often conflicting values. The third element is that the analyst needs to consider likely consequences of the various policy choices that are under consideration and that that entails a very hardnosed view of globalizing whatever social there is to analyze and predict the consequences and follow them where they leave. Before its element of Clear Thinking in my view is that it identifies relevant distinctions and tradeoffs and has those clearly in mind. Taking them seriously and understanding the tradeoffs often reflect conflicting values and also conflicting ways of reading the evidence. Then the fifth element is preferred policy options which are most costeffective and implementable. I would also add and i see this in the book the process matters a lot and i refer not only to the process of formulating and adopting policy but also the process for implementing whatever measures are adopted. This is a technocratic way of thinking about the policy if you will. I do not find that a problem. By discussing the book the moral objections to this technocratic way of thinking and i reject the objection in the qanda if you like i could get into that. This is about Clear Thinking with respect to hard issues. I explain what they mean and i analyzed five of them. Whats most important is that reasonable people can and do differ with respect to them although some prefer outcomes that are more clear than others in general as i stated the book above idont care where people t on these issues as long as they have taught them through in the matter that i suggest. The major exception to that is affirmative action where the government is very clear that this is a failed policy in the very divisive policy and helps no one except the few in the affirmativeaction who were already by and large privileged within their group by not going to discuss affirmativeaction today. I asked what you would be most interested in and she suggested a focus on policy, immigration and religious exemptions to secular policies so let me begin with poverty. I should say i meant was that the manuscript before the brookings report on poverty came out, but i have access to most of the work that went into that report and i used it in my analysis. I also discuss inequality for a couple of reasons, first, to distinguish it from poverty to folks in this audience i suspect understand there are different things, one being an absolute level of deprivation and a relative concept comparing one group of people to other groups of people but in the public mind there is a lot of confusion about the distinction analyzed and explaining some of its measures and trends. Then i turned poverty itself. It involves a wide range of difficult questions. Obviously i dont need to see that it involves the terrible conditions of life for people who suffer from it, but that only makes more important the need to define it so the first issue is how to define and measure it and let me pause on that. It has been a much controverted issue from the outset of the establishment of the office of Economic Opportunity in 1964. The official policy measure which we still use today was based on the measured the Social Security administration. She recognized at the time it was a very inadequate measure of policy and very actually one of informative and most respects but since then, almost anybody that discusses the policy agrees that isnt a good measure. The question is what adjustments should be made to the measure and the first is whether to include non cash transfers and needless to say, food stamps and Health Care Entitlements and the earned income tax credit and child welfare, tax credits and so forth are important additions to aftertax income. Second is the earned income tax credit which is important for working families and makes a big difference in the level of poverty that they and end of her. They were arguing for the earned income tax credit. It also can make a difference in the result of the calculation. It doesnt take any account of reasonable differences. Since the 1964. It doesnt take account of workers who received unemployment insurance. It is on the Self Reporting of income and other elements of the calculation by the individuals of the question. The research has been done about whether those figures were Self Reporting more consistent with the actual disbursement of government agencies. There is an adjustment with a different appropriate measure on the goods and services. They had done a lot of work on measuring the consumption changes over time in the right direction. So in the standard of living that poor people have is much better than it was in 1964. Needless to say that i would trade places with people that are in this condition, but an objective analysis of how many there are, what the trends are e and what the prospects are needs to be based on this kind of study. If you look at housing, food, cars, appliances, healthcare, crimhealth care,crime and even e plight of people who are denominated for the official calculations is much better than it ever has been. Then there are subgroups of americans whose poverty is especially concerning to us and the Child Poverty rate is about 20 as i mentioned before if you enter this adjustment is back to about 15 which is still a really appalling figure in the country as wealthy as ours. The elderly poverty rate is 9. 8 without the adjustment and its 2. 6 with. So it is almost a quarter of what it would be under the official measure. And then, the very interesting complication is immigrants because they have an enormous increase in their wellbeing and income measure anyway by reason of their coming to the United States and yet many of them aiming for someone might question whether we should think of them in the same way that we think of americans who are poor. As one analyst put it, its simply absorbed in large populations of the third world and didnt expect that could affect the poverty rate. But coupled with the realization that they actually have benefited enormously from coming to the United States comes of it as a complication. Another feature of the policy analysis has to do with the intergenerational mobility on what the u. S. Used to be a world leader in itself very much in the countries and very troubling statistic that i discuss in the book is that 40 of those born to fathers who are in the lowest percentile of income remain in the lowest quintile of income. So often the case is fascinating if you are born to a father who was very poor, theres a very good chance that not overwhelming, but a good chance that you will be poor as well. Much of the discussion of poverty relates to blacks and i discuss why thats the case and why mucthenwhy much of the discn be very misleading. It is slightly lower than that of native americans but the more important point is 75 of blacks are not poor so the images that we form our unfortunately quite inaccurate though it is the case that too many are born into poverty will end up in poverty. The most important conclusion that i think analysts have come to hi in trying to determine wht the trend is is that today the gap is even greater than the racial gap that is to say this is the most unfortunate deplorabldeplorable conditions t predictor is being born to unmarried mothers and absent fathers. That is the single best predictor. It is not race or where you live. It is birth. There has been some good reason into poverty picture the rate declined sharply since 1991 with a gap in High School Completion closing not enough but running at 5 . Rates have stabilized though as we know at a higher level much too high for the wellbeing of children and crime has dropped in all communities over the last 28 years or so. Let me explain the measures of the adjustments and the patterns of poverty i will turn to the causes of poverty. And there are many of course. The main cause as it has been emphasized by brookings is under employment and unemployment by the working age family heads. What causes this under employment and unemployment . I go through a number of causes in some detail. First i would say that its bad luck. How we defined it as is a quesn that reasonable people can differ about that some of it is misfortune by any standards. Many poor people are poor because a Health Problem that they could not really anticipa anticipate. Some are poor often because of divorces. Their standard of living declines Something Like 25 in the first year after divorce where mens standard of living increases by about 10 in the first year after divorce. Kind of a shocking comparison to me. 72 of beef i will move on to the family and Community Breakdown which i consider the most important single cause of the under and unemployment by working age nondisabled family heads. 72 of black babies born out of wedlock today that is triple the rate that it was when Daniel Patrick moynihan famously decried the chaos and crisis of black families and the great of babies born out of wedlock is now higher than when he conducted his analysis so its an extraordinarily devastating and its a development that we dont seem to know much about solving. Its not for want of study and effort. It is a really hard problem. The third cause of poverty is the socalled disappearing jobs. And here again i have a lot to say on the analysis and some of the responses to the concerns. Very interesting finding and what shocked me is how low of a percentage of unemployed men cite as the reason for their unemployment lack of jobs. Some of these people are disabled but when i come to discussion of disability i will have more to say about that. The fourth possible cause is educational deficits. But here its important to emphasize that they often forget which is we are blaming poor schools and we really ought to realize that in fact, the deficits that exist in childrens opportunities and achievement begins well before they start in school. There will be more to say about that including the analysis of the problem. So i talk about bad luck, educational deficits. A fifth one is isolation and here they have a lot more to teach us. Many of you may be familiar with the famous at work sociologist has written about the strength of weak ties by which he means a greater opportunities available to people that have a Large Network instead of a Strong Network so it is a kind of paradox but its easily explained and Orlando Patterson has written about the myth of the hood and just to summarize quickly what the sociologists have reported is that black networks are both smaller and denser and have the smallest percentage of kens been then any other group and is also very littltheres alsovery little abe especially for black women so that isolation that limits the context is very severe. The six possible cause is discrimination and here i distinguish between or among three different types of discrimination one is intentional and second is unintentional and third is statistics. Lawyers in the audience will certainly be very much aware of those in the distinction that is reflected in the doctrine under title vii of the act. One complication is that it is prohibited against people on the basis of race, religion, national origin, gender and so forth but not on the basis of poverty so it is not a protected classification which means it cant be attacked within normal to the extent it is based on poverty it cant be attacked in the normal fashion that civil rights law in place. A second cause of poverty is bad choices. Here one can be easily accused of blaming the victim. But there are a range of choices that we can reasonably characterized as bad some of them are antisocial behaviors and some of them are just shortsighted behaviors so let me just read one description of this phenomenon. Most bad choices or simply shortsighted and the second possibility common examples include dropping out of high school, gambling, ignoring school work, excessive borrowing and spending, domestic violence, parenting children one cannot afford. The substantiation is within one might think. 62 of prisoners in the United States are violent or sex offenders. The states are by and large primarily for fiscal reasons trying to empty minor offenders but tha thats welcomed policy l only have a marginal effect on the number of people. A widespread entrenched pattern of despair or selfdestructive conduct. I discuss that a bit i dont want to see more about that unless you want to raise it in the qanda. Then i discuss a Current Program with the focus on the low income people and communities and its not that we spend much money or have much in recent years on the programs in 2008 we spent 261 billion at the federal level that was in 2008 and only seven years later we spent 848 billion on these programs. Going through the programs i dont want to be labored becauss because theres other things to discuss, but a earned income tax credit, snap, the earned income tax credits, Social Security, medicare, medicaid its all important and largely successful programs so they have large amounts of fraud, waste and abuse and we dont seem to be able to reduce those measures were those amounts vary significantly if at all. Some of the programs raise concern is in medicaid and Social Security disabilities. I discuss the evidence on that. Another Important Program is titled fun with respect to education. Brookings did a report on the effectiveness year and a half ago and was quite critical of the effectiveness of the program on a variety of grounds some of which are difficult to rectify a think. Head start, small program. Both health and Human Services and the Brookings Institution reported a rapid stays out of the benefits from head start by the third grade or even sooner sometimes during the summer. A Nobel Prize Winner in economics in chicago is more optimistic about the longterm effects of head start. When you talk about the effects 30 years later theres so many intervening conditions that its hard to be really confident in that kind of analysis. But if he says i that theres probably a lot of truth to it. Job Training Programs the assessments show no effectiveness. The job court today costs us about 1. 8 billion a year and every study that has been done which i am aware of shows no effective as whatsoever. Social Security Disability and others have studied this and have shown that it contains serious hazards in reducing work incentives. Disability insurance recipients and the ratio of workers to disability recipients has declined from 1341 to 161. Some would say it is close to 111 so that is a Shocking Development that we need to take very seriously. Housing the National Bureau of Econom