MR. DIONNE: It's a real honor to be here today with my two Presidents -- President Obama and President DeGioia. (Laughter.) And my friend, David Brooks, hurled the most vicious insult at me ever once when he said that I was the only person he ever met whose eyes lit up at the words, “panel discussion.”
(Laughter.) And I have to confess my eyes did light up when I was asked to do this particular panel discussion -- and not just for the obvious reason, to my left -- and, again, it's a real honor to be with you, Mr. President -- or Arthur or Bob.
Poverty is a subject we talk about mainly when tragic events, such as those we witnessed recently in Baltimore, grab our attention. Then we push it aside; we bury it; we say it's not politically shrewd to talk about it. So I salute Georgetown, my friend John Carr and Galen Carey, and all the other extraordinary people who are gathered here for the poverty summit from all religious traditions all over the country.
Our friend, Jim Wallis, once said that if you cut everything Jesus said about the poor out of the Gospel you have a book full of holes. And these are evangelicals, Catholics and others who understand what the Scripture said.
Just two quick organizing points on our discussion. The first is that when it's time to go, please keep your seat so the President can be escorted out. The other is that Bob and Arthur and I all agreed that we should direct somewhat more attention to President Obama than to the other members of the panel.
(Laughter.) I just say that -- I say that in advance so that you know this was our call and not some exercise in executive power. (Laughter.) This was our decision to do this. (Applause.)
And in any event, we hope this will be a back-and-forth kind of discussion. Bob and Arthur, feel free to interrupt the President if you feel like it. (Laughter.)
My first question, Mr. President, is the obvious one. A friend of mine said yesterday, when do Presidents do panels? And what came to mind is the late Admiral Stockdale, “Who am I? Why am I here?” (Laughter.) And I'd like to ask you why you decided -- this is a very unusual venue for a President to put himself in -- and I'd like to ask you where do you hope this discussion will lead beyond today?
And I was struck with something you said in your speech last week. You said, politicians talk about poverty and inequality, and then gut policies that help alleviate poverty and reverse inequality. Why are you doing this, and how do you want us to come out of here?
THE PRESIDENT: Well, first of all, I want to thank President DeGioia, the Georgetown community, all the groups -- nonprofits, faith-based groups and others -- who are hosting this today. And I want to thank this terrific panel.
I think that we are at a moment -- in part because of what’s happened in Baltimore and Ferguson and other places, but in part because a growing awareness of inequality in our society -- where it may be possible not only to refocus attention on the issue of poverty, but also maybe to bridge some of the gaps that have existed and the ideological divides that have prevented us from making progress.
And there are a lot of folks here who I have worked with -- they disagree with me on some issues, but they have great sincerity when it comes to wanting to deal with helping the least of these. And so this is a wonderful occasion for us to join together.
Part of the reason I thought this venue would be useful and I wanted to have a dialogue with Bob and Arthur is that we have been stuck, I think for a long time, in a debate that creates a couple of straw men. The stereotype is that you’ve got folks on the left who just want to pour more money into social programs, and don't care anything about culture or parenting or family structures, and that's one stereotype. And then you’ve got cold-hearted, free market, capitalist types who are reading Ayn Rand and -- (laughter) -- think everybody are moochers. And I think the truth is more complicated.
I think that there are those on the conservative spectrum who deeply care about the least of these, deeply care about the poor; exhibit that through their churches, through community groups, through philanthropic efforts, but are suspicious of what government can do. And then there are those on the left who I think are in the trenches every day and see how important parenting is and how important family structures are, and the connective tissue that holds communities together and recognize that that contributes to poverty when those structures fray, but also believe that government and resources can make a difference in creating an environment in which young people can succeed despite great odds.
And it seems to me that if coming out of this conversation we can have a both/and conversation rather than either/or conversation, then we’ll be making some progress.
And the last point I guess I want to make is I also want to emphasize we can do something 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. That’s 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 percent 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 low-income community around the country, there are programs that work to provide ladders of opportunity to young people; we just haven't figured out how to scale them up.
And so one of the things I’m 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 it’s 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 it’s 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 there’s nothing we can do -- because there’s a lot we can do. The question is do we have the political will, the communal will to do something about it.
MR. DIONNE: Thank you, Mr. President. I feel as a journalist maybe I’m the one representative of cynicism up here
-- (laughter) -- so I’ll 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 I’m going to encourage us to reach for solutions. But before we get there, I think it’s 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 don’t even see the lives of the unlucky and the left behind. You wrote, “Before I began this research, I was like that.”
And 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 I’d like you to lay out sort of the moral call of your book.
MR. PUTNAM: Thanks, E.J., and thanks to the President and to Arthur for joining me in this conversation.
I think in this domain there’s good news and bad news, and it’s 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 you’ve 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 well-off homes, and worse and worse for kids coming from less well-off homes.
And I don’t mean Bill Gates and some homeless person. I mean people coming from college-educated homes -- their kids are doing better and better, and people coming from high school-educated homes, they’re kids aren’t. And it’s not just that there’s this class gap, but a class gap on our watch -- I don’t mean just the President’s watch, but I mean on my generation’s 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 college-educated 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 weren’t very well-educated or weren’t high-income, and those kids’ fate is being determined by things that they had no control over. And that’s 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, it’s not like that’s going to make things better for my grandchildren. It’s 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 we’ve had a great gap between rich and poor, when we’ve ignored the least of these, in which we’ve -- I’m 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 it’s 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 it’s in everybody’s interest to raise up these poor kids and not to leave them in the dust.
MR. DIONNE: Thank you very much. By the way, let the record show the President was not looking at Arthur when he referred to cold-hearted capitalists. (Laughter.) But it is nice to have somebody here from the AEI.
MR. BROOKS: Well, D.J., when the President said that, I was just thinking -- what was going through my head was, please don’t look at me, please don’t look at me. (Laughter.) But you notice when Bob said this -- about the social Darwinism, he pointed at me. (Laughter.) So I'm more outnumbered than my Thanksgiving table in Seattle, let me tell you. (Laughter.)
MR. DIONNE: You just have to look into your heart, Arthur. And in fact, that’s kind of what I want to ask you to do here. I mean, your views on these subjects have actually changed, and I think it's 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 open-handed 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 I’ve fairly characterized that. And in the spirit we’re celebrating here of trans-ideological nonpartisanship -- now, there’s 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?
MR. BROOKS: Thank you, E.J. And thank you, Mr. President. It's 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 we’re 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.
That’s why I'm in this particular movement. But we’ve 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 consensus is impossible,+++++++ and we blow up policy differences until they become a holy war. That’s got to stop because it's 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, right-left 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 don’t talk about them as liabilities to manage. They’re not liabilities to manage. They’re assets to develop because every one of us made in God’s image is an asset to develop.
That’s a completely different approach to poverty alleviation. That’s a human capital approach to poverty alleviation. That’s 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 doesn’t mean they want to be on public assistance. And that’s the difference between people who factually are making a living and who are accepting public assistance. It's 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 it's 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 we've never even met. It's ahistoric; it's 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 middle-class 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.
MR. DIONNE: Thank you. In fact, I'm 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.
I'm 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 --
THE PRESIDENT: I assure you they’re not watching this. (Laughter.) But it's a hypothetical. (Laughter.)
MR. DIONNE: Well, it's a religious audience. I believe in miracles. (Laughter.) So if they said we are so persuaded that it's time we do something about the poor, Mr. President, tell us a few things that we'll actually pass, we'll do this -- when you think about -- we can talk kind of abstractly about the family on this side, and what government can do. What do you think would actually make a difference? So that's one kind of question I'm tempted to ask.
And maybe you could put that into the context of Bob’s mention of the Gilded Age. As you know, I was much taken by that Osawatomie speech -- I even learned how to pronounce Osawatomie, thanks to you -- back in 20 -- help me.
THE PRESIDENT: A couple years ago.
MR. DIONNE: A couple years ago -- 2011. And it really did put this conversation in context. We do seem in certain ways to be having the problems we had back then. So what would you tell Congress? Please help me on this. And how do we sort of move out of this Gilded Age feeling kind of period?
THE PRESIDENT: Let me tease out a couple things that both Bob and Arthur said -- and maybe some of these will be challenging to a couple of them and they may want to respond. But let me talk about big picture, and then we can talk about specifics.
First of all, I think we can all stipulate that the best antipoverty program is a job, which confers not just income, but structure and dignity and a sense of connection to community. Which means we have to spend time thinking about the macro-economy, the broader economy as a whole.
Now, what has happened is, is that since, let’s say, 1973, over the last 40 years, the share of income going to the bottom 90 percent has shrunk from about 65 percent down to about 53 percent. It's a big shift. It's a big transfer. And so we can't have a conversation about poverty without talking about what’s happened to the middle class and the ladders of opportunity into the middle class.
And when I read Bob’s book, the first thing that strikes you is when he’s growing up in Ohio, he’s in a community where the banker is living in reasonable proximity to the janitor at the school. The janitor’s daughter may be going out with the banker’s son. There are a set of common institutions -- they may attend the same church; they may be members of the same rotary club; they may be active at the same parks -- and all the things that stitch them together. And that is all contributing to social mobility and to a sense of possibility and opportunity for all kids in that community.
Now, part of what’s happened is that -- and this is where Arthur and I would probably have some disagreements. We don’t dispute that the free market is the greatest producer of wealth in history -- it has lifted billions 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 can lead to some being left behind. And what’s happened in our economy is that those who are doing better and better -- more skilled, more educated, luckier, having greater advantages
-- are withdrawing from sort of the commons -- kids start going to private schools; kids start working out at private clubs instead of the public parks. An anti-government ideology then disinvests from those common goods and those things that draw us together. And that, in part, contributes to the fact that there’s less opportunity for our kids, all of our kids.
Now, that’s not inevitable. A free market is perfectly compatible with also us making investment in good public schools, public universities; investments in public parks; investments in a whole bunch -- public infrastructure that grows our economy and spreads it around. But that’s, in part, what’s been under attack for the last 30 years. And so, in some ways, rather than soften the edges of the market, we’ve turbocharged it. And we have not been willing, I think, to make some of those common investments so that everybody can play a part in getting opportunity.
Now, one other thing I’ve got to say about this is that even back in Bob’s day that was also happening. It’s just it was happening to black people. And so, in some ways, part of what’s changed is that those biases or those restrictions on 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 blue-collar job that paid well enough to be in the middle class and then got you to the suburbs, and then the next generation was suddenly office workers -- all those things were foreclosed to a big chunk of the minority population in this country for decades.
And that accumulated and built up. And over time, people with less and less resources, more and more strains -- because it’s hard being poor. People don’t like being poor. It’s time-consuming’ it’s stressful. It’s hard. And so over time, families frayed. Men who could not get jobs left. Mothers who are single are not able to read as much to their kids. So all that was happening 40 years ago to African Americans. And now what we’re seeing is that those same trends have accelerated and they’re spreading to the broader community.
But the pattern that, Bob, you’re recording in some of your stories is no different than what William Julius Wilson was talking about when he talked about the truly disadvantaged. So I say all this -- and I know that was not an answer to your question. (Laughter.) I will be willing to answer it, but I think it is important for us at the outset to acknowledge if, in fact, we are going to find common ground, then we also have to acknowledge that there are certain investments we are willing to make as a society, as a whole, in public schools and public universities; in, 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 that there’s actually a train that takes folks to where the jobs are -- that broadband lines are in rural communities and not just in cities. And those things are not going to happen through market forces alone.
And if that’s the case, then our government and our budgets have to reflect our willingness to make those investments. If we don’t make those investments, then 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 trends in our society will make it harder and harder for us to deal with both inequality and poverty.
And so I think it’s important for us to recognize there is a genuine debate here, and 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 in the inner city, to access what they need both in terms of mentors and social networks, as well as decent books and computers and so forth, in order for them to succeed along the terms that Arthur discussed.
And right now, they don’t have those things, and those things have been stripped away. You look at state budgets, you look at city budgets, and you look at federal budgets, and we don’t make those same common investments that we used to. And it’s had an impact. And we shouldn’t pretend that somehow we have been making those same investments. We haven’t been. And there’s been a very specific ideological push not to make those investments. That’s where the argument comes in.
MR. DIONNE: And if I could follow up, which gets to the underlying problem where we talk, piously, sometimes, about let’s tear down these ideological red/blue barriers, yet when push comes to shove, these things get rejected. How do you change the politics of that? I mean, as you said, Mitch McConnell and John Boehner were unlikely to be watching us -- that actually has a kind of political significance. Not to this event, but in general.
THE PRESIDENT: I was suggesting they’re busy right now. They’ve got votes. (Laughter.)
MR. DIONNE: No, but I think you were saying something else. How do you tear down those barriers? Because you laid out a fairly robust agenda there. And I want to -- forgive me, Arthur and Bob -- but I’m curious, how do you get from here to there?
THE PRESIDENT: Well, part of what happened in our politics and part of what shifted from when Bob was young and he was seeing a genuine community -- there were still class divisions in your small town.
MR. PUTNAM: True.
THE PRESIDENT: There were probably certain clubs or certain activities that were still restricted to the banker’s son as opposed to the janitor’s son. But it was more integrated. Part of what’s happened is, is that elites in a very mobile, globalized world are able to live together, away from folks who are not as wealthy, and so they feel less of a commitment to making those investments.
In that sense -- and what used to be racial segregation now mirrors itself in class segregation and this great sorting that’s taking place. Now, that creates its own politics. Right? I mean, there’s some communities where I don’t know -- not only do I not know poor people, I don’t even know people who have trouble paying the bills at the end of the month. I just don’t know those people. And so there’s a less sense of investment in those children. So that’s part of what’s happened.
But part of it has also been -- there’s always been a strain in American politics where you’ve got the middle class, and the question has been, who are you mad at, if you’re struggling; if you’re working, but you don’t seem to be getting ahead. And over the last 40 years, sadly, I think there’s been an effort to either make folks mad at folks at the top, or to be mad at folks at the bottom. And I think the effort to suggest that the poor are sponges, leaches, don’t want to work, are lazy, are undeserving, got traction.
And, look, it's still being propagated. I mean, I have to say that if you watch Fox News on a regular basis, it is a constant menu -- they will find folks who make me mad. I don’t know where they find them. (Laughter.) They’re like, I don’t want to work, I just want a free Obama phone -- (laughter) -- or whatever. And that becomes an entire narrative -- right? -- that gets worked up. And very rarely do you hear an interview of a waitress -- which is much more typical -- who’s raising a couple of kids and is doing everything right but still can’t pay the bills.
And so if we’re going to change how John Boehner and Mitch McConnell think, we’re going to have to change how our body politic thinks, which means we’re going to have to change how the media reports on these issues and how people’s impressions of what it's like to struggle in this economy looks like, and how budgets connect to that. And that’s a hard process because that requires a much broader conversation than typically we have on the nightly news.
MR. DIONNE: I am tempted to welcome Arthur to defend his network. But instead, I want to sort of maybe invite him to an alter call here. (Laughter.) I want to invite you to a kind of alter call, which is, the President talked about some basis public investments that are actually pretty old-fashioned public investments, along the lines of somebody like President Eisenhower supported a lot of those kinds of investments --
THE PRESIDENT: Republican President Abraham Lincoln thought things like land-grant colleges and infrastructure, investments in basic research in science were important.
I suspect, Arthur, you’d agree in theory about those investments. And the question would be, how much?
MR. BROOKS: Look, no good economist, no self-respecting person who understands anything about economics denies that there are public goods. There just are public goods. We need public goods. Markets fail sometimes -- there’s a role for the state. There are no radical libertarians up here, libertarians who believe that the state should not exist, for example. Even the libertarians don’t think that. So we shouldn’t caricature the views of others because, in point of fact, that impugns the motives.
I think that what we’re talking about is, one, when are there public goods? When can the government provide them? And when are the benefits higher than the costs of the government proving these things? Because, in point of fact, when we don’t make cost-benefit calculations at least at the macro level about public goods, the poor pay. This is a fact.
If you look at what’s happening in the periphery countries of Europe today, as George W. Bush used to say, this is a true fact. (Laughter.) It’s more emphasis.
There’s nothing wrong. (Laughter.) If you don't pay attention to the macro economy and the fiscal stability, you will become insolvent. And if you become insolvent, you will have austerity. And if you have austerity, the poor always pay. Jim Wallis taught me this. The poor always pay when there’s austerity. The rich never pay. The rich never are left with the bill. It’s the poor who are left with the bill.
So if you join me in believing the safety net is a fundamental, moral right, and it’s a privilege of our society to provide, you must avoid austerity and you must avoid insolvency. And the only way that you can do that is with smart policies.
And I’m 100 percent sure the President agrees with me about smart macro-economic public policies, so I’m not caricaturing these views either. Although can you believe he said “Obama phone”? (Laughter.) And he’s against the Obama phone. So let’s stipulate to that. (Laughter.) Just because they took away his phone. (Laughter.)
Now, since we believe that there should be public goods, then we're really talking about the system that provides them and provides them efficiently. The President talked about the changing structure of the income distribution, and it’s unambiguously true. What I would urge us to regret is this notion that it’s not a shift, but a transfer. It’s not a transfer.
Since the 1970s, it’s not that the rich have gotten richer; because the poor have gotten poorer. The poor are not having their money taken away and given to the rich. The rich have gotten richer faster than the poor have moved up. And we might be concerned with that because that also reflects on opportunity. And as an opportunity society, as an equal opportunity society, we should all be really concerned with that.
But the extent that we can get away from this notion that the rich are stealing from the poor, then we can look at this in I think in a way that's constructive. Why? Because the rich are our neighbors and the poor are our neighbors, and everybody else should be our neighbors and they're all our kids. And I think getting away from that rhetoric is really important.
And then the last point, actually, as we come to consensus is remembering that capitalism or socialism or social democracy or any system is just a system. Look, it’s just a system. It’s just a machine. It’s like your car. You can do great good with it, you can do great evil with it. It can't go uninhibited. So far it can't drive on its own. It will soon enough. The economy never will be able to.
Capitalism is nothing more than a system, and it must be predicated on right morals. It must be. Adam Smith taught me that. Adam Smith, the father of modern economics -- he wrote “The Wealth of Nations,” in 1776 -- 17 years before he wrote “The Theory of Moral sentiments,” which was a more important book because it talked about what it meant as a society to earn the right to have free enterprise, to have free economics. And it was true then, and it’s still true today.
So this is why this conference is so important. This conversation with the President of the United States is so important, from my point of view -- I say with appropriate humility -- is because we're talking about right morality toward our brothers and sisters, and built on that, that's when we can have an open discussion to get our capitalism right. And then the distribution of resources is only a tertiary question. (Applause.)
MR. DIONNE: I still want to know how much infrastructure you're actually willing to vote for, but I’ll take --
MR. BROOKS: $41 billion.
MR. DIONNE: All right, it’s a start. We can negotiate.
I want to -- this is in a way for both the President and Bob, because in this conversation about poverty, there’s kind of consensus on this stage that, yes, you need to care about family structure, it really matters, but if you don't worry about the economy, you're not sort of thinking about why the battering ram is against the family.
And yet, this family conversation can make a lot of people feel uneasy because it sounds like either you're not taking politics seriously, or you're not taking the real economic pressure seriously. And I just want to share two things with the President and Bob, and have you respond.
One, as you can imagine, I asked a lot of smart people what they would ask about if they were in my position. And one very smart economist said, look, what we know is when we have really tight labor markets, unemployment down below -- down to 4 or even lower -- Kennedy, Johnson years, World War II, at the end of the Clinton years -- all kinds of good things start happening to poor people. So maybe, this person said, even though, he says, yes, family structure matters, let’s stop with the moral lectures and just run a really tight economic policy, and we could have some really good things happen to us.
And then the other thing I wanted to share -- and I’m being pointed here, Mr. President, because you know and I’ve heard you talk about this, but not that often publicly, which is -- you know, I’ve heard you in those sessions you do with opinion reporters -- Ta-Nehisi Coates wrote something back in 2013 about your talk about what needs to happen inside the African American community -- I know you remember this: “Taking full measure of the Obama presidency thus far, it is hard to avoid the conclusion that this White House has one way of addressing the social ills that afflict black people and particularly black youth, and another way of addressing everyone else. I would have a hard time imagining the President telling the women of Barnard that ‘there's no longer room for any excuses’ -- as though they were in the business of making them.”
I’d love you to address sort of the particular question about -- maybe it is primarily about economics because we can’t do much about the other things through government policy, and also answer Ta-Nehisi’s critique, because I know you hear that a lot.
THE PRESIDENT: Why don’t we let Bob --
MR. DIONNE: Let Bob --
MR. PUTNAM: Well, I’m going to try to respond to that, and of course, I want to hear what the President has to say about that. But I wanted to just comment briefly on that earlier conversation, first of all, about public goods.
I agree very much with the President’s framing of this issue -- that is that we disinvested in collective assets, collective goods that would benefit everybody but are more important for poor people because they can’t do it on their own. I want to just give one example of that that’s very vivid, and this is a case where we’ve clearly shot ourselves in the foot.
For most of the 20th century, all Americans of all walks of life thought that part of getting a good education was getting soft skills -- not just reading, writing, arithmetic, but cooperation and teamwork, and so on. And part of that was that everybody in the country got free access to extracurricular activities -- band and football, and music and so on. But beginning about 20 years ago, the view developed -- which is really, really deeply evil -- that that’s just a frill.
And so we disinvested, and we said if you want to take part in football here, or you want to take part in music, you’ve got to pay for it. And of course, what that means is that poor people can’t pay for it. It’s a big deal -- $1,600 on average for two kids in a family. Well, $1,600 to play football, or play in the band, or French club or whatever -- it’s not a big deal if your income is $200,000; but if you income is $16,000, who in their right mind is going to be paying 10 percent of their family income?
So it seems to me that that’s a case where the allocation that the benefits of learning teamwork and hard skills -- I mean grit were only on the individual. But that wasn’t true. The whole country was benefitting from the fact that we had a very broad-based set of skills that people had. So I’m trying to emphasize this -- how deep runs this antipathy in some quarters for the notion that these are all our kids and, therefore, we’ve got to invest in all of them.
But I also want to then come back, if I can, to I think the thing we maybe haven’t spent enough time here, and that is this is a purple problem. There are those of us who on the left can see most clearly the economic sources of this problem and want to do something about it. But then there are people on the conservative side, especially religious people, who use a different lens and they can see most clearly the effects of family disruption among poor families of all races on the prospects of kids.
And in the stories of the kids that we gathered across America -- I want to return a little bit not just to the abstract discussion of poverty, but to real kids. Mary Sue from -- doesn’t have anything the like the same opportunities as my granddaughter. But part of that is because Mary Sue’s parents behaved in very irresponsible ways. We interviewed a kid from -- a young woman from Duluth who is now on drugs. How did she get on drugs? Because her dad was addicted to meth and wanted to get high, but didn’t want to get high alone, so her dad taught -- Molly is her name -- how to smoke -- how to do meth. I don’t even know how you do meth myself. I’ll have to check with him. (Laughter.)
And it’s systematically -- the fact is we all know this, that it’s -- I’m 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’s harder to do that. And therefore, we need to think, all of us, including those of us -- and I know the President agrees with me about this -- even those of us on the more progressive side have to think, how did we get into a state in which two-thirds of American kids coming from what we used to call the working class have only a single parent, and what can we do to fix that?
I’m not sure this is government’s role. But I do think that if we’re concerned about poverty, we also, all of us, have to think about this purple side of the problem -- I mean, this family side of the problem. And we shouldn’t -- those of us -- I’m now speaking to my side of the choir -- we shouldn’t just assume that anybody who talks about family stability is somehow saying that the economics don’t matter. Of course, the economics matter. It’s both/and; it’s not either/or. (Applause.)
MR. DIONNE: Mr. President?
THE PRESIDENT: A couple of things I would say. First of all, just going back to something Arthur said earlier about how we characterize the wealthy, and do they take this extra wealth from the poor, the 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 their markets, and they make more money and it gets more concentrated, and that then reinforces itself. But there are values and decisions that have aided and abetted that process.
So, 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 because the CEO felt it was a member of that community and the sense of obligation about paying a certain wage or contributing to the local high school or what have you was real. And today the average Fortune 500 company -- some are great corporate citizens, some are great employers -- but they don’t have to be, and that’s certainly not how they’re judged.
And that may account for the fact that where a previous CEO of a company might have made 50 times the average wage of the worker, they might now make a thousand times or two thousand times. And that’s now accepted practice inside the corporate boardroom. Now, that’s not because they’re bad people. It's just that they have been freed from a certain set of social constraints.
And those values have changed. And sometimes tax policy has encouraged that, and government policy has encouraged that. And there’s a whole literature that justifies that as, well, that's what you’d need to get the best CEO and they're bringing the most value, and then you do tip into a little bit of Ayn Rand.
Which, Arthur, I think you’d be the first to acknowledge because I’m in dinners with some of your buddies and I have conversations with them. (Laughter.) And if they're not on a panel, they’ll say, you know what, we created all this stuff and we made it, and we're creating value and we should be able to make decisions about where it goes.
So there’s less commitment to those public goods -- even though a good economist who’s read Adam Smith’s “Moral Sentiments” would acknowledge that actually we're under-investing, or at least we have to have a certain investment. So that's point number one.
Point number two, on this whole family-character values-structure issue. It’s true that if I’m giving a commencement at Morehouse that 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. And I make no apologies for that. And the reason is, is because I am a black man who grew up without a father and I know the cost that I paid for that. And I also know that I have the capacity to break that cycle, and as a consequence, I think my daughters are better off. (Applause.)
And that is not something that -- 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.
So I’ll talk till you're blue in the face about hard-nosed, economic macroeconomic policies, but in the meantime I’ve got a bunch of kids right now who are graduating, and I want to give them some sense that they can have an impact on their immediate circumstances, and the joys of fatherhood.
And we did something with My Brother’s Keepers -- which emphasizes apprenticeships and emphasizes corporate responsibility, and we're gathering resources to give very concrete hooks for kids to be able to advance. And I’m going very hard at issues of criminal justice reform and breaking this school-to-prison pipeline that exists for so many young African American men. But when I’m sitting there talking to these kids, and I’ve got a boy who says, you know what, how did you get over being mad at your dad, because I’ve got a father who beat my mom and now has left, and has left the state, and I’ve never seen him because he’s trying to avoid $83,000 in child support payments, and I want to love my dad, but I don't know how to do that -- I’m not going to have a conversation with him about macroeconomics. (Laughter and applause.)
I’m going to have a conversation with him about how I tried to understand what it is that my father had gone through, and how issues that were very specific to him created his difficulties in his relationships and his children so that I might be able to forgive him, and that I might then be able to come to terms with that.
And I don't apologize for that conversation. I think -- and so this is what I mean when -- or this is where I agree very much with Bob that this is not an either/or conversation. It is a both-and. The reason we get trapped in the either/or conversation is because all 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 in public goods that took place over the course of 20 to 30 years.
If, in fact, the most important thing is character and parents, then it’s okay if we don't have band and music at school -- that's the argument that you will hear. It’s okay. Look, there are immigrant kids who are learning in schools that are much worse, and we're spending huge amounts in the district and we still get poor outcomes, and so obviously money is not the issue. And so what you hear is a logic that is used as an excuse to under-invest in those public goods.
And that's why I think a lot of people are resistant to it and are skeptical of that conversation. And I guess what I’m saying is that, guarding against cynicism, what we should say is we are going to argue hard for those public investments. We're going to argue hard for early childhood education because, by the way, if a young kid -- three, four years old -- is hearing a lot of words, the science tells us that they're going to be more likely to succeed at school. And if they’ve got trained and decently paid teachers in that preschool, then they're actually going to get -- by the time they're in third grade, they’ll be reading at grade level.
And those all very concrete policies. But it requires some money. We're going to argue hard for that stuff. And lo and behold, if we do those things, the values and the character that those kids are learning in a loving environment where they can succeed in school, and they're being praised, and they can read at grade level, and they're less likely to drop out, and it turns out that when they're succeeding at school and they’ve got resources, they're 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 character that we want.
And that's where we, as a society, have the capacity to make a real difference. But it will cost us some money. It will cost us some money. It’s not free.
You look at a state like California that used to have, by far, the best public higher education system in the world, and there is a direct correlation between Proposition 13 and the slow disinvestment in the public university system so that it became very, very expensive. And kids got priced out of the market, or they started taking on a whole bunch of debt. Now, that was a public policy choice, based on folks not wanting to pay property taxes. And that's true in cities and counties and states all across the country. And that's really a big part of our political argument.
So I am all for values; I am all for character. But I also know that that character and the values that our kids have that allow them to succeed, and delayed gratification and discipline and hard work -- that all those things in part are shaped by what they see, what they see really early on. And some of those kids right now, because of no fault of those kids, and because of history and some tough going, generationally, some of those kids, they're not going to get help at home. They're not going to get enough help at home. And the question then becomes, are we committed to helping them instead?
MR. DIONNE: Mr. President, I want to follow up on that and then invite Arthur and Bob to reply. Arthur, you clearly got a plenary indulgence in this session on all kinds of positions. (Laughter.)
A lot of us, I think, feel that we made bargains with our friends on the conservative side that -- I agree with the idea that you've got to care about what happens in the family if you're going to care about social justice, and you got to care about social justice of you care about the family. Yet when people like you start talking like this, there doesn’t seem to be much giveback on, “okay, we agree on these values; where’s the investment in these kids?”
Similarly, when welfare reform was passed back in the ‘90s, there were a lot of people who said, okay, we’re not going to hear about welfare cheats anymore because all these people are going to have to work. And yet we get the same thing back again. It’s as if the work requirement was never put in the welfare bill. How do we change this conversation so that it becomes an actual bargain where the other half of the agenda that you talked about gets recognized and that we do something about it?
THE PRESIDENT: I’ll ask Arthur for some advice on this -- because, look, the devil is in the details. I think 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’ll say that there are some public goods that have to be made -- and I’ll believe them. But when it comes to actually establishing budgets, making choices, prioritizing, that’s when it starts breaking down.
And I actually think that there will come a time when political pressure leads to a shift, because more and more families -- not just inner-city African-American families, or Hispanic families in the barrio, but more and more middle-class or working-class folks are feeling pinched and squeezed -- that there will be a greater demand for some core public goods and we’ll have to find a way to pay for them. But ultimately, there are going to have to be some choices made.
When I, for example, make an argument about closing the carried interest loophole that exists whereby hedge fund managers are paying 15 percent on the fees and income that they collect, I’ve been called Hitler for doing this, or at least this is like Hitler going into Poland. That’s an actual quote from a hedge fund manager when I made that recommendation. The top 25 hedge fund managers made more than all the kindergarten teachers in the country.
So when I say that, I’m not saying that because I dislike hedge fund managers or I think they’re evil. I’m saying that you’re paying a lower rate than a lot of folks who are making $300,000 a year. You pretty much have more than you’ll ever be able to use and your family will ever be able to use. There’s a fairness issue involved here. And, by the way, if we were able to close that loophole, I can now invest in early childhood education that will make a difference. That’s where the rubber hits the road.
That’s, Arthur, where the question of compassion and “I’m my brother’s keeper” comes into play. And if we can’t ask from society’s lottery winners to just make that modest investment, then, really, this conversation is for show. (Applause.)
And by the way, I’m not asking to go back to 70 percent marginal rates, which existed back in the golden days that Bob is talking about when he was a kid. I’m just saying maybe we can go up to like -- tax them like ordinary income, which means that they might have to pay a true rate of around 23, 25 percent which, by historical standards in postwar era, would still be really low.
So that’s the kind of issue where if we can’t bridge that gap, then I suspect we’re not going to 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 a lot of credit for extolling because it encourages work and it could help actually strengthen families.
MR. DIONNE: Arthur raised capital gains taxes for us here.
MR. BROOKS: Yes, sure. Fine. These are show issues. Corporate jets are show issues. Carried interest is a show issue. The real issue? Middle-class entitlements -- 70 percent of the federal budget. That’s where the real money is. And the truth of the matter is until we can take that on -- if we want to make progress, if the left and right want to make progress politically as they put together budgets, they’re going to have to make progress on that.
Now, if we want to create -- if we want to increase taxes on carried interest, I mean, that’s fine for me -- not that I can speak for everybody, certainly not everybody on the Republican side.
And by the way, Mitch McConnell and John Boehner are watching, at least indirectly, and they’re paying attention to this -- 100 percent sure, because they care a lot about this. And they care a lot about both culture and economics, and they care a lot about poverty. And, again, we have to be really careful not to impugn their motives, and impugning motives on the other side is the number-one barrier against making progress. Ad hominem is something we should declare war on and defeat because then we can take on issues on their face, I think. It’s really important morally for us to be able to do that.
Who, by the way, were you having dinner with who was discussing Ayn Rand and why wasn’t I invited? (Laughter.)
So if we want to make progress, I think let’s decide that we have a preference -- I mean, let’s have a rumble over how much money we’re spending on public goods for poor people, for sure. And Republicans should say, I want to spend money on programs for the poor, but I think these ones are counterproductive and I think these ones are ineffective, and Democrats should say, no they’re not, we’ve never done them right and they’ve always been underfunded. I want to have that competition of ideas. That’s really productive.
But we can’t even get to that when politicians on the left and the right are conspiring to not touch middle-class entitlements, because we’re looking at it in terms of the right saying all the money is gone on this, and the left saying all we need is a lot more money on top of these things -- when most people who are looking at it realize that this is an unsustainable path. It’s an unsustainable path for lots of things, not just programs for the poor. We can’t adequately fund our military.
I think you and I would have a tremendous amount of agreement about the misguided notion of the sequester, for lots of reasons, because we can’t spend money on purpose. And that’s what we need to do. And when we’re on an automatic path to spend tons of money in entitlements that are leading us to fiscal unsustainability, we can’t get to these progressive conversations where conservatives and liberals really disagree and can work together, potentially, to help poor people and defend our nation.
MR. DIONNE: I just want to say if the carried interest is a show issue, why can’t we just get it out of the way and move forward? (Laughter and applause.)
THE PRESIDENT: It is real money. It’s real money.
MR. DIONNE: Here is what I’d like to do. I think we have about three minutes left, so I’d like Bob to speak, and then I have one last question for the President.
MR. PUTNAM: All of us would agree about this -- we need to a little bit rise out of the Washington bubble and the debates about these things. Of course, they’re important. I understand why they’re important. But, actually, we’re speaking here to an audience of people of faith. We’re speaking, more largely, to America. And I think we ought not to 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.
And I’m not talking about changing Republican-Democrat. I’m talking about making poverty and the opportunity to escape from poverty a higher issue on both parties’ agendas. (Applause.) I have some hope that that will happen. I understand -- this may not be true, Mr. President -- I understand that there is going to be an election next year. (Laughter.)
THE PRESIDENT: That’s a true fact. (Laughter and applause.)
MR. PUTNAM: And I think American voters should insist that the highest domestic priority issue is this issue of the opportunity gap, the fact that we’re talking about. This is not a third order issue, it's a really important issue. And ask candidates, what are you going to do about it? And then just use your own common sense. Is that the right way to go forward?
I think that we need, as a country, not just from the top down and from Washington, but from across the grassroots, to focus -- and in congregations and parishes all across this country, focus on what we can do to reduce this opportunity gap in America.
MR. DIONNE: Mr. President, I wanted you to reflect on this religious question. I mean, one of your first salaries was actually paid for by a group of Catholic churches, something -- Cardinal McCarrick knows that, but not a lot of Catholic bishops notice that -- (laughter) -- that you were organizing for a group of South Side churches. You know what faith-based groups can do. And I’d like you to talk about sort of three things at the same time, which is the role of the religious community simply in calling attention to this problem; the issues of how government can cooperate with these groups; and sort of the prophetic role of these ideas for you, where your own reflections on your own faith have led you on these questions.
THE PRESIDENT: Well, first of all, it's true, my first job was funded through the Campaign for Human Development, which was the social justice arm of the Catholic Church. (Applause.) And I think that faith-based groups across the country and around the world understand the centrality and the importance of this issue in a intimate way -- in part because these faith-based organizations are interacting with folks who are struggling and know how good these people are, and know their stories, and it's not just theological, but it's very concrete. They’re embedded in communities and they’re making a difference in all kinds of ways.
So I think that what our administration has done is really a continuation of work that had been done previously by the Bush administration, the Clinton administration. We’ve got our office of faith-based organizations that are working on an ongoing basis around a whole host of these issues. My Brother’s Keeper is reaching out to churches and synagogues and mosques and other faith-based groups consistently to try to figure out, how do we reach young boys and young men in a serious way?
But the one thing I guess I want to say, E.J., is that when I think about my own Christian faith and my obligations, it is important for me to do what I can myself -- individually mentoring young people, or making charitable donations, or in some ways impacting whatever circles and influence I have. But I also think it's important to have a voice in the larger debate. And I think it would be powerful for our faith-based organizations to speak out on this in a more forceful fashion.
This may sound self-interested because there have been -- these are areas where I agree with the evangelical community and faith-based groups, and then there are issues where we have had disagreements around reproductive issues, or same-sex marriage, or what have you. And so maybe it appears advantageous for me to want to focus on these issues of poverty, and not as much on these other issues.
But I want to insist, first of all, I will not be part of the election next year, so this is more just a broader reflection of somebody who has worked with churches and worked in communities.
There is great caring and great concern, but when it comes to what are you really going to the mat for, what’s the defining issue, when you're talking in your congregations, what’s the thing that is really going to capture the essence of who we are as Christians, or as Catholics, or what have you, that this is oftentimes viewed as a “nice to have” relative to an issue like abortion. That's not across the board, but there sometimes has been that view, and certainly that's how it’s perceived in our political circles.
And I think that there’s more power to be had there, a more transformative voice that's available around these issues that can move and touch people. Because the one thing I know is that -- here’s an area where, again, Arthur and I agree -- I think fundamentally people want to do the right thing. I think people don't set out wanting to be selfish. I think people would like to see a society in which everybody has opportunity. I think that's true up and down the line and across the board. But they feel as if it’s not possible.
And there’s noise out there, and there’s arguments, and there’s contention. And so people withdraw and they restrict themselves to, what can I do in my church, or what can I do in my community? And that's important. But our faith-based groups I think have the capacity to frame this -- and nobody has shown that better than Pope Francis, who I think has been transformative just through the sincerity and insistence that he’s had that this is vital to who we are. This is vital to following what Jesus Christ, our Savior, talked about.
And that emphasis I think is why he’s had such incredible appeal, including to young people, all around the world. And I hope that that is a message that everybody receives when he comes to visit here. I can't wait to host him because I think it will help to spark an even broader conversation of the sort that we're having today.
MR. DIONNE: All events are better with a reference to Pope Francis. Thank you so much, Mr. President. (Applause.)
I really want to thank Arthur and Bob. And thank you, Bob, for writing this book that's moved us all. And thank you, Mr. President, for being here. And John and Galen and then so many others for creating this.
If I may close by simultaneously quoting Amos and Dr. King, “Let justice roll down like waters and righteousness like a mighty stream. Bless you all.”
Thank you, Mr. President.
THE PRESIDENT: Thank you.