When most people think of California, they think of Silicon Valley, Hollywood, and Beverly Hills. Yet, California is actually tied with Louisiana for the nation’s highest poverty rate. Clearly, the “California model” is failing to address the needs of all the Golden State’s residents.
My most recent book, The Inclusive Economy: How to Bring Wealth to America’s Poor, examined the causes and solutions for poverty on a national scale, pointing to government policies from criminal justice to education to over regulation that trap people in poverty. Now, I’m going to look specifically at California’s failure to help its poorest citizens.
The Cato Institute is launching a Project on Poverty and Inequality in California. I will be directing this two-year project that will look at ways in which California government policies have burdened those most in need, and will suggest specific reforms designed to help poor Californians become part of the economic mainstream. An analysis of what works and what doesn’t in California will provide important information to California policy makers, as well as valuable insights for other states as they work to address similar problems.
The Project on Poverty and Inequality in California will investigate the impact that the state’s policies have had in five critical areas:
- Criminal Justice: Over-criminalization, sentencing disparities, treatment of ex-offenders, and pervasive bias against People of Color are problems for all levels of society, but have a disproportionate impact on the poor. Despite recent progress, California has lagged behind many other states in reforming its policing and criminal justice system.
- Education: While California has some of the highest per-student spending in the nation, student performance continues to lag behind other states. Despite this, the state rigidly restricts charter schools and blocks other forms of school choice.
- Housing: The poor spend a disproportionate share of their income on housing. California has some of the nation’s most costly and restrictive zoning and land use laws, which further drive up the cost of housing.
- Welfare reform: Asset tests for welfare programs encourage consumption and discourage savings. California eligibility requirements for a variety of welfare programs need to be examined in light of the incentives they create.
- Regressive regulation: Regulatory barriers to getting a job or starting a business can block people from fully participating in the economy. Occupational licensing, zoning, environmental regulation, and high minimum wage requirements can inhibit small business development and growth and leave those wanting to work locked out of the labor force.
As part of this project, I will be undertaking extensive visits to California to meet with stakeholders, including state-level elected officials, interest groups, and individuals who are affected by current policy. My first trip will be to Sacramento for a community roundtable discussion on June 26. If you would like to attend, you can register here: https://register.cato.org/stakeholder-roundtable-sacramento-2019.
I am very excited at this opportunity to continue providing positive solutions to one of the most important problems of our time.
The Mueller Report is now in, and, while we should obviously want to see as much of the actual report and underlying evidence as possible, a few things are pretty clear.
First, the “Russia collusion” narrative is dead. As annoying as it was to hear President Trump intone “no collusion” endlessly, he was right. I say this as one who has never hid my dislike for many aspects of the Trump presidency. There clearly was, Trump’s equivocation notwithstanding, a concerted Russian campaign to influence the 2016 election to favor Donald Trump. But Mueller made clear that neither Trump nor anyone associated with his campaign conspired or coordinated with the Russian efforts. I would note that I have previously written that I was skeptical of the collusion narrative since it implied a level of competence and planning that the Trump administration has not demonstrated anywhere else. Essentially a campaign that was run by amateurs, and was unfamiliar with everything from campaign finance law to Russian intelligence tactics, made a number of questionable decisions, but ultimately did nothing criminal.
Second, it is also clear that Democrats and the media got way to far out over their skis on this one. How many times did we see Adam Schiff and others on TV telling us that they had seen clear evidence of collusion, predicting Trump’s immediate impeachment or even his arrest. Breathless conspiracy theories were advanced on a near daily basis. They now find themselves in the unenviable position of the boy who cried wolf. They continue their mistake if they give in to further conspiracy theories or refuse to accept the report’s conclusion. Democrats should take a deep breath…and keep Schiff far away from the TV cameras.
Trump supporters, on the other hand, are entitled to a victory lap or two. They were right, and a lot of Trump’s opponents were wrong. But they should be careful about getting too carried away. The report is much less clear on the question of obstruction of justice, specifically noting that the investigation “does not exonerate” the president. That doesn’t mean that there was obstruction, but it does mean that some of Trump’s conduct was less than scrupulously honest.
Moreover, the Mueller investigation also makes it clear that Trump surrounded himself with a rogue’s gallery of knaves, scoundrels and liars. That should tell us a great deal about the man who once told us he “only hires the best people.” And, lest we forget, there are still ongoing investigations of Trump’s inaugural committee, business relationships, and payoffs to mistresses. It remains tawdry at best and potentially criminal at worst.
Judging from my social media feeds, it seems unlikely that either Trump opponents or supporters will be taking my advice. Still, there is some hope that this chapter will eventually draw to a close and we can return to debating public policy. There are still important issues facing this country. Maybe we can stop talking about collusion and start talking about them.
Today is book release day, meaning The Inclusive Economy is finally available on Amazon, B&N, and in bookstores near you. This book is the result of more than four years of work, and I truly believe it is the most important thing I have written. It is available in digital, audio, and hard copy formats. You can order it here:
The Inclusive Economy looks at the reasons for poverty in America and offers a detailed agenda for increasing wealth, incomes, and opportunity for the neediest Americans. Notably, I challenge the conventional wisdom of both the Right and Left that underlies much of our current debate over poverty and welfare policy.
I suggest that conservative critiques of a “culture of poverty” too often amount to “victim blaming” and fail to account for the structural circumstances in which the poor live, especially racism, gender-based discrimination, and economic dislocation. However, I also criticize liberal calls for fighting poverty primarily through greater redistribution of wealth and new government programs.
Ultimately, I conclude that too much of contemporary anti-poverty policy focuses on making poverty less miserable, and not enough on helping people get out of poverty and becoming self-sufficient. Instead of another sterile debate over whether this program should be increased by $X billion or that program should be cut by $Y billion, I call for an end to government policies that push people into poverty. In doing so, I offer a detailed roadmap to a new anti-poverty agenda that includes criminal justice reform, greater educational freedom, housing deregulation, banking reform, and more inclusive economic growth. These policies reject the paternalism of both Left and Right, instead empowering poor people and allowing them to take greater control of their own lives.
In attempting to marry social justice with limited government, I offer something guaranteed to displease pretty much everybody. However, I also believe that this book provides an agenda for individual empowerment that should draw support across ideological and partisan lines.
At the risk of self-promotion, I urge you to buy The Inclusive Economy today, and read it.
The long painful slog to the midterms is finally over…which means we can start the long painful slog to the 2020 presidential election. But before that, let’s take a moment to evaluate the outcome from this week’s vote. There will be the usual post-election explanations that victories were really defeats and defeats were really victories, but a quick overview suggests that this was: 1) a good election for checks and balances; 2) a bad election for the Left Wing of the Democratic Party; 3) a mixed bag for Donald Trump; and 4) some bright spots (though hardly unalloyed) for individual liberty.
As I wrote here (https://www.cato.org/publications/commentary/what-expect-democrats-win-house), Democratic control of the House is unlikely to mean much in terms of big legislation. It will probably lead to increased spending — though the Republicans have hardly been fiscally responsible – and a few bipartisan bad ideas, like a giant infrastructure boondoggle. On the other hand, divided government is generally a good thing. And, far more importantly, a Democratic House will have the power to investigate and hold the Trump administration accountable. Control of the House comes with control of the investigatory committees and subpoena power. One hopes that they won’t go off the deep end chasing the chimera of impeachment, and, instead, focus on rooting out the genuine corruption and incompetence that permeates this administration. In addition, a Democratic House can serve as an additional check on some of Trump’s worst ideas. Some good legislation will never see the light of day now, but some very bad legislation will be buried as well. On balance, a good thing.
Despite their win in the House though, Democrats should have done far better. Exit polls showed that many more voters “strongly disapproved” of President Trump than “strongly supported” or “somewhat supported” combined. Trump was particularly toxic in the suburbs, which fueled the Democratic takeover of the House.
Yet, Democrats lost a lot of races that they should have won. Yes, the map worked against them; Senate races were generally in deep red states. But the demographic problems were made worse by the party’s lurch to the left. For instance, both Andrew Gillum and Stacey Abrams embraced single-payer health care and called for massive tax hikes. Beto O’Rourke supported impeachment and called for gun control – in Texas – in addition to government-run health care, higher taxes, etc. Given the unpopularity of their opponents, a more moderate candidate might have been better positioned to take advantage of the opportunity. All in all, it was not a great night for the Bernie Bros. That means that Democrats need to decide whether they will continue to cater to their left-wing base or to make an appeal to those in the middle, who dislike Trumpian excess but aren’t ready for democratic socialism.
As for Trump, he cemented his control over the Republican Party and white, rural America. But there were also warning signs for 2020. Trump’s victory in 2016 was a matter of roughly 80,000 votes in three states: Pennsylvania, Michigan, and Wisconsin. Democrats scored big victories in those states, as well as other Trump states like Iowa. Trump demonstrated an ability to excite and turn out his base, but he still has shown no ability – or desire – to expand it. And wannabe Trumps like Kris Kobach in Kansas and Corey Stewart in Virginia were not even competitive. The politics of resentment may have its limits (although, sadly, white nationalist hero Steve King squeaked by in his Iowa congressional district).
Republicans also should be concerned that they not only lost among African-Americans, Latinos, women, and those with higher education, but by the huge margin of their loss among young people. Republicans didn’t just lose by 2 to 1 among those under 30, but lost every age group under 50. Republicans are increasingly the party of aging white men, not a good scenario for the future.
From a pro-liberty standpoint, there were some bright spots. Arizona Supreme Court Justice Clint Bolick survived a judicial retention election, despite an all-out attempt by the teachers’ unions to unseat him. Justin Amash, the most libertarian member of Congress won reelection in Michigan’s Third District. This, despite a Democratic wave in the state that captured the governorship and possibly defeated two other Republican incumbents. And, in Colorado, the new Democratic governor, Jared Polis, has shown a strong libertarian streak. Indeed, Polis was the only Democratic member of the Congressional Liberty Caucus. It was also a terrific election for electoral diversity. A record number of women were elected to Congress, including the first Native American woman, and the first two Muslim Women. Polis will be the first openly gay governor of a state, and in Oregon, Kate Brown, the country’s first openly bisexual governor, won reelection. And while, in Vermont, Christine Hallquist, lost her race for governor, her status as a trans-woman was a non-issue.
The biggest positives for liberty may have been state ballot initiatives. It was generally a good night for criminal justice reform, with voters in Florida passing two important measures. By a nearly 2 to 1 margin they approved a measure restoring the right to vote to felons who have completed their sentence. That measure restores the right to vote to nearly 40 percent of the state’s African-American population. Floridians also repealed a state constitutional provision that prevented reform or repeal of criminal laws from applying retroactively. And in Louisiana, voters finally killed a Jim Crow-era law that allowed convictions by non-unanimous juries. It was also a good night for marijuana, with Michigan approving recreational use and both Missouri and Utah supporting medical marijuana. It was unanimous, however. In North Dakota, voters decided against a measure to legalize recreational marijuana use. And, in the night’s biggest loss for criminal justice reform, Ohio voters turned down an amendment to the state constitution that would have reduced most drug offenses to misdemeanors, limit incarceration for many parole violations, and created new incentives for prisoners to participate in work and education programs. Many reform advocates had worried that the proposal, particularly being a constitutional amendment, might be too big a stretch for voters. Apparently, that was true.
Not surprisingly, voters took a dim view of taxes. In Arizona, voters banned new taxes on services, while in North Carolina voters reduced the top income tax rate from 10 to 7 percent. Floridians passed a constitutional amendment requiring a 2/3 vote to raise most taxes. One exception to the anti-tax tide was in California, where voters decided to keep a gas tax increase. (On the other hand, in a victory for economic common sense, California voters overwhelmingly rejected a measure to expand rent control.) And Oregon rejected a measure that would have prevented both state and local governments from taxing groceries. A similar measure in Washington, that would restrict only local governments, is still too close to call.
And, sex remains popular in Nevada. In Lyon County,roughly 80 percent of voters turned down a ban on the county’s brothels. Meanwhile, a brothel owner won his campaign for the Nevada legislature, despite having died a month ago.
It wasn’t all progress, however. As expected, voters in Arkansas and Missouri approved an increase in the minimum wage. Such measures are inevitably popular with voters, despite their cost in jobs for low-skilled workers. Voters in four Republican states Idaho, Montana, Nebraska, and Utah expanded Medicaid under the Affordable Care Act. Taxpayers will be sorry, and poor patients will see fewer benefits than they think. Arizona voted against expanding the state’s pioneering and largely successful school choice program. And, Washington State imposed new restrictions on gun ownership. Two steps forward, one step back.
Overall, this election revealed an electorate that is still deeply split along demographic, racial, religious, and other lines. We can expect the political battles to continue. Still, as I wrote today for National Review Online (https://www.cato.org/publications/commentary/divided-party-united-spirit?utm_source=featured_commentary&utm_medium=views&utm_campaign=item_title), politics is not America, There is far more that unites us than divides us. That’s something to keep in mind no matter which side of this election you were on.
My new book, The Inclusive Economy: How to Bring Wealth to America’s Poor, will be out late this year. But reviewers, from both the Left and Right are already praising it. A sampling:
I have a bookshelf full of treatises about the history and purposes of welfare programs, most written by prominent experts on the right and left. But the Tanner volume could be the most thorough, scholarly, and balanced in exploring the major explanations for poverty. In addition, after lowering expectations, Tanner delivers a reasonable set of recommendations for policies that could reduce poverty including reforms of the justice system; increasing educational choice for parents; reducing the cost of housing; helping the poor gain access to banking, saving, borrowing and investing; reducing regulations that hold back the poor; and increasing economic growth to give the poor an expanded opportunity to get ahead. It will be a long time before we get another volume on poverty that delivers the breadth of understanding and solutions found in this superb volume.
—Ron Haskins, Co-Director, Center on Children and Families, Cabot Family Chair in Economic Studies, Brookings Institution
Michael Tanner has produced an extraordinarily thoughtful and comprehensive look at the history, causes, and debates about poverty. His ultimate goal, to eradicate rather than alleviate poverty, will be widely shared, but his analysis and proposals will clearly challenge the beliefs of conservatives, libertarians, and progressives alike.
—Andrew Stern, President Emeritus, Service Employees International Union (SEIU)
Tanner’s excellent new book bypasses the left-right divide to take the problem of poverty seriously. He shows that persistent poverty in the United States is largely structural. Welfare programs can help keep the poor from starving, but they have not and cannot solve the problem because they do not change the unfair structures which prevent the poor from escaping poverty. It’s time we stop stacking the deck against the most vulnerable members of society.
—Jason Brennan, Robert J. and Elizabeth Flanagan Family Chair and Provost’s Distinguished Associate Professor of Strategy, Economics, Ethics, and Public Policy, Georgetown University
Michael Tanner shows us why too much government regulation and too little economic freedom are precisely the structural conditions that keep so many Americans trapped in poverty. This is a balanced, sober, and thoughtful examination of the causes of poverty in the United States, and a hopeful and practical roadmap for how to make things better.
—Matt Zwolinski, Director, University of San Diego Center for Ethics, Economics, and Public Policy
And finally, here I am on Monte Malin’s terrific podcast, talking about The Inclusive Economy and a libertarian approach to fighting poverty. (BTW, if you don’t follow Monte’s podcast, you should. Non-political, but fascinating interviews).
Given the current debate, let me be upfront about my opinion on immigration. I am very close to being the “open borders supporter” people accuse me of being. I think there should be an orderly process for entry, and that we should be able to bar those with obvious criminal or terrorist backgrounds. Beyond that, if someone wants to come to this country, I say let them come. It will make us a richer, more entrepreneurial, and more vibrant country.
I am a libertarian because I believe in the equal intrinsic value of every human being. Basic human rights do not come from government and are not arbitrarily circumscribed by lines on a map. That applies equally to people with brown skin or who don’t speak English.
Despite what we tell ourselves on both sides of this debate, the United States is not a particularly generous nation when it comes to immigrants. The US only takes less than a third of one percent of our population in immigrants per year. That’s far fewer, as a proportion of our population, than most other rich countries such as Australia, Sweden, or Canada. We can easily accommodate more.
Yes, increased immigration would undoubtedly mean more people collecting government benefits, although immigrants tend to use most social welfare programs at a lower rate than native-born Americans. (https://www.cato.org/publications/immigration-research-policy-brief/immigration-welfare-state-immigrant-native-use-rates). But that’s an argument for walling off the welfare state – not the country. (https://www.cato.org/publications/policy-analysis/building-wall-around-welfare-state-instead-country.
Besides, the cost of immigrant welfare benefits would be more than offset by increased economic growth. After all, economic growth depends on the growth and productivity of the labor force. An increase in immigration would help offset an ongoing decline in U.S. labor force participation. These benefits are especially large for highly skilled immigrants. Trained on another country’s dime, such immigrants are about the closest thing economically to a free lunch for Americans.
Immigrants positively impact both the demand and supply sides of the economic equation. Obviously, immigrants are consumers, providing additional demand for goods and services in the areas where they reside. At the same time, immigrants are nearly twice as likely to start a business each month as native-born Americans, and about 40 percent of Fortune 500 companies were started by immigrants or their children.
What about concerns over crime and gangs like MS-13? One crime victim is one too many. And obviously there are criminals among immigrants just like there are among native born Americans. But the fact is that immigrants (both legal and illegal) are less likely to commit crimes or be arrested than non-immigrants. (https://www.cato.org/publications/immigration-reform-bulletin/criminal-immigrants-their-numbers-demographics-countries) And, resources expensed to track down peaceful, law-abiding immigrants are resources not available to arrest those MS-13 gangsters.
Immigration restrictionists express concern that increased immigration would mean lower wages for native-born Americans. At first glance, this seems obvious. With fewer workers available, employers would have to raise wages in order to convince native-born Americans to take less desirable jobs. It is in fact true that in some cases, immigrants will substitute for low-skilled native-born workers, leading to lower wages or job loss.
But for the most part, immigrants have different skills and job preferences than native-born workers, and they typically take jobs at the high end and low end of the skill spectrum. For instance, most Americans are simply unwilling to become seasonal agricultural migrants, doing menial work for relatively little pay. Such jobs simply would not exist without immigrants to fill them, and we would all be worse off as a result.
In terms of wages, the vast majority of immigrants do not directly compete with native-born workers but should be considered complementary, making American workers more productive. Higher productivity means higher wages for native-born workers.
Even if immigration might sometimes temporarily reduce wages, it seems odd for conservatives or libertarians at least to argue that it is the job of government to keep wages artificially high. The same argument, after all, is often made by those arguing in favor of an increased minimum wage or protectionist trade barriers, both of which free market supporters oppose.
Then again, it is clear that immigration restrictionists are far from consistent supporters of free markets. Isn’t the free flow of workers (along with goods and capital) a basic tenet of free market capitalism?
Opponents of immigration reform are on more consistent ground when they point out that illegal immigrants have, by definition, broken our laws. At a time when the president seems to feel that the law doesn’t apply to him, regard for the “rule of law” is more important than ever. But not all violations of the law are equal. Few would advocate jailing you because you tore that little tag off your mattress. Any immigration opponents ever speed? Under report income on your taxes? Smoke pot?
Moreover, if it is just “illegal” immigration that you oppose, then why do you back President Trump’s call for cutting *legal* immigration by 40 percent? (https://www.politico.com/story/2018/01/30/trump-legal-immigration-republicans-378041). Shouldn’t opponents of *illegal* immigration want to make *legal* immigration easier? If not, let’s dispense with the fiction that it’s the illegality that bothers you.
Finally, I wonder how you can have a restrictionist immigration policy while respecting civil liberties. Do we want a land of informers, where neighbors call ICE on neighbors they think might be undocumented? Do we want police pulling over people on a pretext to check their papers? Should dark skin or speaking Spanish make you the constant subject of suspicion?
I have always believed that the zero population growth people were dead wrong. Humans are a valuable resource. Those willing to risk a dangerous trip across the desert or in the hold of a container ship, to arrive in a new land, penniless, without even being able to speak the language, but with a determination to achieve a better life for them and their children, are exactly the sort of resource we could use more of.
One last point, I’m strictly talking immigration here, not citizenship. I believe in a pathway to citizenship- a lengthy and somewhat arduous one – but that is an entirely different debate. It is perfectly reasonable to support open immigration while opposing citizenship for them.
Obviously not everyone will agree with me, including friends and people I respect. So, if you support the president’s approach to immigration, I would love to know why. In particular, if you share my belief in free markets, limited government, and individual liberty, how do you square those beliefs with immigration restrictionism?
The floor is open.
My latest book has finally been accepted and has disappeared into the publication process – next stop copyediting. It has been more than two years in the works, and I really do see it as the most important publication of my career.
The Inclusive Economy: Bringing Wealth to America’s Poor looks at the reasons for poverty in America and offers a detailed agenda for increasing wealth, incomes, and opportunity for the neediest Americans. Notably, I challenge the conventional wisdom of both the Right and Left that underlies much of our current debate over poverty and welfare policy. I suggest that conservative critiques of a “culture of poverty” fail to account for the structural circumstances in which the poor live, especially racism, gender discrimination, and economic dislocation. However, I also criticizes liberal calls for fighting poverty through greater redistribution of wealth or new government programs.
Ultimately, I conclude that too much of contemporary anti-poverty policy focuses on making poverty less miserable, and not enough on helping people get out of poverty and becoming self-sufficient. Instead of another sterile debate over whether this program should be increased by $X billion or that program should be cut by $Y billion, I call for an end to government policies that push people into poverty. In doing so, I offer a detailed roadmap to a new anti-poverty agenda that includes criminal justice reform; greater educational freedom, including school choice; making housing more affordable through the elimination of zoning and land use regulations, banking reform, and more inclusive economic growth. These policies reject the paternalism of both Left and Right, instead empowering poor people and allowing them to take greater control of their own lives.
In attempting to marry social justice with limited government, I offer something guaranteed to displease pretty much everybody. However, I also believe that this book provides an agenda for individual empowerment that should draw support across ideological and partisan lines. We’ll see.
The Inclusive Economy has a Dec 4 catalogue date, but copies should be available well before that.