The culture of poverty has led Ohio Secretary of State Kenneth Blackwell to propose a novel, market-based solution to poverty in Ohio, which is detailed in his new book, Rebuilding America.
Rebuilding America
by John Kenneth Blackwell and Jerome R. Corsi
WND Books, published by Cumberland House Publishing, Inc.
Nashville, Tennessee 2006
Hdbk, 255 pgs., notes, index
ISBN: 13;978-1-58182-501-5
Ohio Secretary of State and Republican nominee for governor (2006) Ken Blackwell and co-author Jerome Corsi (Unfit for Command: Swift Boat Veterans Speak Out Against John Kerry) have penned a book that first outlines the history of black poverty in America since the 1950’s and the federal government’s response (the Problem), and second, Blackwell’s proposal (The Blackwell Initiative) which eschews federal involvement and looks to a state solution that leans heavily on the inclusion of the private sector (the Solution).
The first five chapters of the Blackwell/Corsi book review the sad history of race relations and the federal government’s involvement in eliminating poverty since the days of Lyndon Johnson’s Great Society. The authors make the point that ten trillion dollars in transfer payments over four decades has netted no appreciable decrease in poverty in the United States and we are left to guess how much better off American blacks, indeed the entire country, would have been, had the American taxpayer been permitted to keep his hard earned wages.
In arguing for the abandonment of the failed policies of the “War on Poverty” the authors write, “No redefinition of the laws, no matter how equitable; no government program, regardless of how brilliantly it can be designed; and no expenditure of funds, even if we spend trillions more, will ever solve the problem of black poverty in America.” The problem of black poverty, the authors tell us, is in a “poverty culture,” first expressed by Senator Pat Moynihan, “where the welfare state itself was actually encouraging the breakup of families by the rules under which welfare payments were available.” For Blackwell/Corsi the problem is that “poverty is a social and economic problem…a problem government alone will never solve.”
Ken Blackwell’s solution (or initiative) is centered on “finding new state funds that can be applied to stimulate jobs and home ownership in Ohio.” And, his goal is to lease the Ohio Turnpike to private business for an “immediate cash infusion of potentially billions of dollars into a trust fund or funds that will be dedicated to jobs and economic development for Ohioans.” To his credit he has earmarked not only the urban poor, but the rural poor as well where those areas “have become under invested as a result of the failures of the welfare state.”
“Our goal,” the authors write, “in leasing the Ohio Turnpike is to establish, under Ohio law, trust funds that will work with the private-capital markets, including banks, venture capital firms, real estate investment trust (REITS) comprised of property owners, and businesses whose job it will be to put the funds to work in Ohio’s communities.” Blackwell assures the reader that “what is being sold” is not the turnpike per se but the “rights to operate the turnpike.” Blackwell does not see state government as a “taxing and spending entity” but one with the means to “structure public projects” to utilize investment bankers in the creation of free market enterprises.
Blackwell’s objective is to set market forces to work in the urban ghetto and in areas of Ohio where rural poverty prevails. Under the title, "Rebuild Ohio Now," he hopes to “anchor businesses that will relocate in the target areas, regardless of whether they are majority- or minority-owned, regardless of whether they plan on employing the area’s minority workers or not. Our goal is to start the development process in the target areas on a strictly private-enterprise basis.”
In analyzing Blackwell’s initiative it would be easy to be critical of yet another government program reminiscent of the alphabet soup solutions that have come down the pike the past forty years or so. Blackwell’s is different for two reasons. First, he’s not requiring that additional bureaucracies be established or more regulations be promulgated in the Ohio Revised Code, neither is he insisting on the minority requirements usually attached to these proposals. And second, there’s a legitimate point to be made about the religious element inherent in the black community. Urban blacks tend to be Pentecostal/Evangelical Christians and their numbers are growing. It is these churches and their preachers who are calling for the renewal of the traditional black family, renouncing out of wedlock pregnancy, gang related crime, and the use of drugs. The same analogy can be applied to Ohio’s white rural poor.
If Ken Blackwell is one of those rare politicians who defines public office as an honor, a duty, and a trust, then we may have a gentleman who understands the concept of responsibility in office. Maybe Blackwell is right, maybe his Rebuild Ohio Now initiative can work. It is a shame to see so many lives, black and white, being thrown away. If leasing (privatizing) the Ohio Turnpike can reap the social/economic rewards Blackwell envisions then maybe we should give it a try. But we might keep in mind a history of failure, scandal, and fraud that usually accompanies these political efforts at creating “jobs, jobs, jobs!”
Rebuilding America is available on Amazon.com.
robertcheeks@core.com
Read more articles by Bob Cheeks
I don't know which is worse.
Thinking market forces help the poor,
or letting them try and fail and having it hurt the poor.
Market forces "work" for anyone with money, and are completely useless for everyone else.
Comment by JS Narins | May 25, 2006
On another thread I asked if Mr. Narins was really a liberal who just enjoys getting a rise out of conservatives on a conservative site. Well now he has answered my question.
Comment by Red Phillips | May 26, 2006
JS Narins alleges that market forces work only for those who have money. Having said this he must be able to explain how those who "have money" got it. The ancestors of the growing number of people who "have money" now could not have had it twenty five, fifty or a hundred years ago. Is the answer that they have essentially stolen it ("property is theft")? If so, and in case we assume that the upper 25% of the population "has money," then there are about 75 000000 successful crooks running around in America. Or does Mr. Narin mean only the Kennedys -sober or not- or the Heinz heirs?
Comment by george handlery | May 26, 2006
Mr. Narins:
Of the many beliefs held by the left, the notion that the free market doesn't help the poor and that government intervention is needed is probably the most troubling to me. You would do yourself well to take a class on economics.
The fundamental truth is that, in a free market economy, the profit motive will continuously drive innovation and the need to improve on existing or create new goods and services, and the need for labor to bring these to the public will generally grow. The economy fluctuates, of course, so there will be times of higher unemployment than others, but without a doubt - competition and free markets have historically been shown to generate the most wealth, occupy the most citizens, and provide continual innovations in technology, health, etc.
Morevover, it has also been pretty well demonstrated that government run redistribution programs have done far more harm than good. It's been nearly 40 years since LBJ established his "Great Society" programs to win the "War on Poverty," and poverty has INCREASED in that time, not lowered. Welfare programs are a huge disincentive against traditional marriage (many benefits of it come when the father is out the picture), work ethic, and the sense of community that this country had throughout its first 200 years of existence. Heck, just look at France and the other socialized European countries with their double digit unemployment. Give the people a sense of entitlement with a range of goverment programs, and you take away the innate sense of responsibility of those people to work hard and strive to improve themselves.
Sure, free market systems mean that some folks will be rich while others will be poor, but then, that would happen anyway. Soviet Russia had a very small group of rich, powerful people, with the overwhelming majority of the populace being extremely poor. Unlike the US, however, there was no middle class - nothing for poor folks to look forward to. Why was it like this? Because the government controlled economy squelched innovation and became stagnated. And the fact is, in this country, prior to the 16th amendment (income tax) and FDR's New Deal, we had a very intricate and well run charity system to help the poor. This wasn't just Sister so-and-so going around delivering bread, but a powerful network that did a far better job than the government could ever hope to in helping the poor and disabled. They were, of course, run out of business by the New Deal programs, and the attendant buearocracy of government ensured that billions would be redistributed, with no real help for the poor ever being accomplished. There is also the fact that a free market economy allows for "niche" markets, and there are a number of businesses which provides cheap goods and services for the poor, ie, Wal-Mart, Goodwill, etc.
So, Mr. Narins, for someone like me, who makes his livelihood in finance and has studied economics extensively, it's not even a question. The best economic system is one with very little government intrusion. It is one in which people are free to chose their destiny, and to find new ways of turning raw materials into capital. Anything else is simply self-destructive.
Shawn
Comment by Shawn | May 26, 2006
For those interested in Redd's comment, here is a link to that thread.
As for Mr. Handlery, I do not, at this time, have the total amount of US assets which were inherited. I can tell you that 42% of the Forbes 400 richest Americans were born with enough money to put them on the Forbes 400 list. Widely reported is that America is one of the most unequal of all OECD countries. Only Mexico has lower taxes.
For reliable, this Chicago Fed Board Working Paper should suffice to show that the top 1% and 5% and 10% have done amazingly well, in terms of total share of wealth, since 1979.
It is clear that, if I have $1 and a rich person has $10, or I have $10 and a rich person has $100, I will never win an auction unless the rich person simply doesn't care about to take what I want.
The total share of wealth held by the few in America was low during the 1950s-1970s. Since then the share of total wealth held by the tiny few has gotten worse and worse.
In fact, it is getting worse, faster, than any time since before the Great Depression (Chart showing share of total US income received by top 0.01% of Americans, 1913-1999).
So, no matter the commodity, the wealthy have more total wealth than any time since before WWII, and are increasing their total wealth share at a faster rate than any time (I'd wager) since US income statistics began being collected in 1913, and any free auction in the market will favor the wealthy.
History, of course, has examples of much greater inequality. Colonial Virginia, the champion of popular ignorance, where French inspired Aristocrats gambled, raced, drank and swore (compare to Massachusetts; where Roundhead tradition Colonists studied, soldiered and prayed).
So, Mr Handlery, please be quiet.
Shawn, you work in finance, too? You know, as long as I've worked in the industry I never found too many people who had a clue about politics.
Comment by JS Narins | May 26, 2006
Shawn,
We did have such a system.
Guess what simply evaporated when the Great Depression hit brainiac? Philanthropy for the poor.
At the precice freaking moment when the poor needed the most charity, those granting it stopped.
The limited public sector charities were in no position to double their rolls, as they were now called upon to do.
So, private charity is nice and cute and it makes you feel good, but in a pinch they are out like a shot.
Wake up.
Comment by JS Narins | May 26, 2006
The Minneapolis Fed has a web page that says the total amount of unearned, inherited wealth in the United States is probably between 25 and 80%.
That, too, turns out to be untrue, at least in the aggregate. In perhaps the most damning refutation of life-cycle theory, economists Laurence Kotlikoff and Lawrence Summers showed in 1981 that as much as 80 percent of current U.S. wealth was inherited and concluded that “the pure life-cycle component of aggregate U.S. savings is very small. American capital accumulation results primarily from intergenerational transfers.” Modigliani responded that the true figure for estates as a percentage of U.S. wealth doesn't exceed 25 percent and argued that the Kotlikoff-Summers' estimate reflects 'mainly definitional differences.' But even so, he conceded that bequests 'play an important role … in the very highest income and wealth brackets.'"
Comment by JS Narins | May 26, 2006
Mr. Narins - or should I call you Josh? What you have done is simply thrown out ad hominens toward me, and posted statistics on the wealthy in this country. Neither of those refutes my arguments.
For starters, although I should just ignore the obvious insult, I will tell you that your assumption that I don't know anything about politics because of my line of work is simply a bunch of bull. And more precisely - my whole point is that politics needs to stay out of the economy, as much as possible.
As to the rest of your posting (rant), it seems you have focused on nothing but an apparent hostility toward the rich. Quite frankly, it does not matter who possesses what, if you have any concern at all about personal liberty. If I invent some great new product and make a billion dollars off of it - what is that to you? I am under no obligation to share that wealth other than how I see fit. And yes, my first choice would be to pass it on to my children. But there would be another important aspect - I would hire as many employees as needed to produce, market and sell my product, and they would all receive pay commisserate with the market demand for their positions. Further, I would, in fact, create and donate to a number of charitable causes - just like most of that 1% of our populace you are so hostile to does.
One thing you've neglected in focusing on only the top 1% is the fact that, of those making $200,000 to $1,000,000 per year, 80% did NOT inherit it, but earned it on their own merit. Sure, the billionares of America pass on their old money, but that doesn't mean wealth is unatainable for the rest of us.
The Great Depression obviously strained people's ability to help others. But it didn't completely "dry up" like you claim. The important things to remember about the GD are its causes: lack of conformity in reporting and valuation and the unregulated leveraged equity trading throughout the '20s. Those things should be - and are now - regulated, as Congress has the power to do under the Commerce Clause. Hence, it is highly unlikely that another depression of such magnitude will occur again.
I would ask that you demonstrate an example of a truly successful system which uses income redistribution. The historical examples speak for themselves.
Comment by Shawn | May 26, 2006
For all of you arguing the wealthy vs. poor and who holds more:
SO WHAT?
One of you even went so far as to say that the US was the "…most unequal of all OECD countries." No duh! Considering most of those countries are Socialist economies with some of the higher taxrates in the world for all classes.
So what if most of America's capital ir inherited? We're not talking wealth here, which is, of course, a liberal rant. We're talking employment and hope and oppotunity for the poor to lift themselves out of the ghetto and rural poor areas into the middle class, or even possibly higher, and none of that can happen under a socialistic regime nor under government entitlements. I have a problem with the gap between the wealthy and the other classes getting wider; howsomever, I have no problem with there being a wealthy class. I would much rather Steve Jobs handle the millions of dollars his company makes, then to have a government try to "redistribute" all that money. Why? Because Mr. Jobs has proved he can make something work and grow; all the Socialist-minded governments can prove is how to create a vacuum and grow.
Comment by Dave | May 26, 2006
Shawn, I called you "brainiac." Take it as you will. Other than that, I did not refer to you. You are a craven liar for saying, as you just did "What you have done is simply thrown out ad hominens toward me, and posted statistics on the wealthy in this country."
I didn't imply that you did or did not know anything about politics. You chose to read it that way, because you are in a dander. Not my fault. Remember, I am in the _same_ industry. Was I saying I know nothing of politics?
Both you and Dave seem to ignore the mathematical argument I made. If someone has $1, and someone else has $430 dollars, then in _any_ free market, the person with $430 dollars never has to lose a single auction.
Why do you folks keep saying I hate the rich? That sounds silly to me. I have no reason to _like_ the Walton family, worth nearly 100 billion dollars (.2% of the America's entire net worth) but who don't give to charity.
The point about (perhaps as much as) 80% of all wealth being inherited comes to one of the underpinnings of the entire capitalist system, entrepreneurship.
You folks obviously didn't read the Minneapolis Fed Report. Here, I'll quote it for you: "In 'Entrepreneurship, Frictions and Wealth,' (Working Paper 620), De Nardi and Cagetti build a life-cycle model similar to De Nardi's earlier version, but pared down to accommodate the extra feature of occupational choice: the decision of whether to become an entrepreneur or remain a worker. In the De Nardi-Cagetti model, individuals facing this choice must have the inclination and ability to be an entrepreneur, of course, but they also need capital. And that capital is available—in their model as in the real world—only if they've saved it themselves, acquired it as a bequest or used their own wealth as collateral for a larger loan."
Now, we agree that entrepreneurs can get wealthy, workers can get along, and lazy bums will get poor, right? Well, if you need capital to become an entrepreneur, and 80% of it is held by wealthy families… the system is entirely unfair, and the poor do not have a fair shot.
They did, back in the 1950s, well, close to it anyway. The chance that someone born poor would end up rich was almost the same as the chance of someone born rich ending up rich. That's opportunity.
That opportunity is gone.
I actually have a long argument that the Estate Tax should be favored by Libertarians and Conservatives more than any other single tax, but I don't feel like talking about it just now. I'm having trouble with Blogger.
Comment by JS Narins | May 26, 2006
Shawn, you _actually_ said I did nothing to address your arguments. What a shameless lie. I explained how your theory of the sufficiency of private charity was belied BY THE FACTS. When the poop hits the fan, the rich pull in their shingle. At least they did during the Great Depression.
Comment by JS Narins | May 26, 2006
In January 1987 Sociologist Marvin Harris came to the same conclusions about the welfare state, and stated that the only way to end the poverty culture was to stop paying people to stay impovrished. His conclusion was published, with other materials in "America Now the Anthropology of a Changing Culture"
Comment by Steven Laib | May 27, 2006
Josh, I'm not going to carry this out much farther. But, for starters - I am not a liar. The phrasing of your posts did in fact, sound like an ad homimen to me. At best, I was mistaken - not lying. I don't lie.
As far as any of the rest of your argument, you still haven't actually refuted mine. Your point is that the rich have an advantage over the poor. Duh. I'm not arguing that - of course they do. My argument is against your original comment - that the free market doesn't HELP the poor. Helping someone doesn't mean giving them the same exact advantage of everyone else in their society. The point is, free markets are more beneficial to more people than are controlled economies. Our government currently pays people to remain impoverished (see Steve's post). This helps no one - particularly the poor.
Comment by Shawn | May 28, 2006
Mr. Narins advises me to "please be quitet." It must be admitted that the (authoritarian) tone seems to fit his cause of replacing the market with another instrument of control. At the same time one wonders what N. thinks he has proven -besides the obvious and therefore uncontested- that would anyone conclude that shutting up is compelling advise. let the reader make up his mind!
Comment by george handlery | May 28, 2006
Why do you think the rural poor don't have high speed internet access? What about when the "new" thing was electricity? What about the mails? There's no money in providing mail service to the rural poor. None at all. No rational market actor would provide such a service if they had the "common" sense to do a cost/benefit analysis. There are many such services.
The market didn't just "not help" the poor in these cases, it (empowers)empowered everyone else and (leaves)left them behind.
Now, if wealth were distrubted (say) by meritocracy, or even _only_ as a reward for market activity, then far fewer would enter the economy and think the (accurately, if 80% of all wealth is really inherited) the deck was stacked against them, as all the Aces were handed out before they were born.
So, I think that shows that parts of the free market hurt the poor in actual opportunity.
And, since we live in a time when the government tries to rule by Perception, it also hurts society, since if they believe it isn't fair, they might not try, and if we all aren't working together, well, there are more problems.
At no point did I advocate any classic form of a command economy, If you call the existence of the Post Office and FDR's rural electrification a "command economy" then we are operating outside of the words' classic meaning, as it relates to production schedules set by the government as part of a, say, Five Year Plan.
"Private utility companies, who supplied electric power to most of the nation's consumers, argued that it was too expensive to string electric lines to isolated rural farmsteads. Anyway, they said, most farmers, were too poor to be able to afford electricity." And that meant the rural poor couldn't enjoy electric appliances, which saved time of only electrified people, further setting the rural poor backwards.
Comment by JS Narins | May 29, 2006
Well, let's see. Historically, we have had fairly open markets. yes, between 120 and 80 or so years ago, unions had a valuable function. However, with and economic system more open than most, our poorest people live a better life than over half the population of the world. Very few starve to death. People in my home town make up to $20 an hour just panhandling. Other so called poor have a roof over their head, running water, t.v., etc. Meanwhile, around the world, people work 105 hours a week in sweatshops so they can sleep in a box and keep their kids from starving. I fail to see how yoo can assert that a free market system is somehow more harmful to these poor people than what has happened any time something else has been tried. Unless of course you would prefer a Soviet breadline to our "poor" eating at McDonalds.
Comment by Shane Atwood | May 30, 2006