What if We Don't Want Anti-Poverty Programs?

A writer at no less than the National Review worries that the Deep South can't be trusted with Federalism, because states there don't tend to enact anti-poverty programs like other states do. He posits that this is because Southern Republicans are white and above-average in income, so that the constituents who vote for Southern governors and many legislators don't want to pay the taxes because they wouldn't benefit from the programs.

Yet even in the Solid South, the Republicans are not always in charge (and have only been in charge for a generation anyway: it was a Democratic stronghold through most of its history).

Did the Democrats who controlled legislatures in the Deep South, black and non-black, play any role at all in the creation and governance of anti-poverty programs? It seems important not to neglect this part of the story. Bouie references the history of the region: “In keeping with their histories as low-tax, low-service states,” Bouie writes, ”places like Alabama and Mississippi have aimed for the minimum, providing as little as possible to poorer residents.” To be sure, Bouie’s point isn’t exactly a partisan one. It could be that it’s not just Republicans in the Deep South who can’t be trusted with anti-poverty efforts, but rather all elected officials in the Deep South, including the Democrats, including the African-American Democrats, who controlled the legislature until relatively recently. (It’s also true that Republicans proved more competitive in races for governor in recent decades, and governors have a great deal of power.) This seems like a dispiriting conclusion to draw, particularly for those of us who have at least some faith in the public-spiritedness of southern lawmakers. Though I would concede that southern policymakers of the past have much to answer for, it seems excessive to discount even the possibility that future southern policymakers will learn from the mistakes of the past.

As a Southerner who has written quite a bit about concern for the poor and the working class in the South, let me suggest that perhaps you're missing the point. There's more than one way to use the government to help the poor and the working class. The Southern way has traditionally been to encourage business development (a tradition that dates to the Reconstruction-era "New South" programs of the Bourbon Democrats who ran the region before, during, and after the Civil War). This is not done by establishing programs that have to be funded by higher taxes, because taxes tend to cause businesses to flee or not to form at all. It is done through a combination of tax brakes and deregulation, that is, by making it cheaper and easier to run your business here. This is the standard wisdom, and it is why the South has been growing at the expense of the Rust Belt for quite a long time now.*

I'm not sure the wisdom is exactly correct, but it is at least partially correct. Having good work is an important part of any anti-poverty program. Where the South has flourished, around cities like Atlanta and Charlotte, it has done so in this way. By attracting major corporations and investors, you create an environment in which small business creation is also encouraged: some small businesses that support the corporations directly, and others that provide services to their employees (or, at a second order, services to people who provide services). I know a young man who recently quit his job at a business that does pressure-washing of trucks (on contract to Federal Express, Pepsi, and others) to take another job at a company that does trimming and cutting trees for subdivisions that house those who have come down during Atlanta's growth over the last several generations. He's working-class, uneducated but energetic and willing to do a hard day's work, and even this terrible economy has provided him with a couple of opportunities from which to choose.

Additionally, the South has not had a good experience with Federally-led anti-poverty programs. Where such programs have had flourishing enrollment, poverty has not declined, but morality has (as a writer at the National Review should know). This had led to a general degradation of the culture in those areas, as well as the people who become wrapped up in this culture of dependency. Where traditional moral structures have held strong, in spite of Federal enticements, rural poverty is not obviously worse yet people live better lives.

Where the Southern anti-poverty strategy falls down seems to me to be in three broad areas:

1) Federal intrusion: It can't defeat Federal regulations, which have badly hurt the working class -- especially the Obamacare regulations, which have lately turned most unskilled workers from full time employees into part-time employees, suppressed business growth and formation, and generally created an atmosphere in which it is harder to create work. Likewise it was very vulnerable to the disruption caused by the housing bubble, which was created in part by Federal regulations on mortgages that destabilized the risk market. No Southern legislature could pass a law countermanding the Federal law that mortgages be issued to people who probably couldn't pay for them, and if they had tried they would have been suspected (and accused) of being racially motivated for it. Yet it would have protected workers in the region from the vastly negative effects of the bubble's formation and collapse.

2) What do we do about people for whom jobs aren't the answer? This strategy gives workers a measure of independence by encouraging the formation of lots of job opportunities, which means that they can elect to move from one job to another. Thus, they aren't quite in the situation of having their lives dominated by a corporate master: they can go work for someone else. But what about those who are getting older and can't work as hard or as long (if they can find an other-than-part-time job, or enough of them); or who lack the resources to train for new skills; or who happen to lack the intelligence to be useful to anyone; or who have developed chronic illness; or, really, anyone else for whom employment isn't the answer? When new technologies alter the playing field for workers, how do we ensure they can adapt to it? What happens if we just need fewer workers because of technological changes -- what do we do about people who can't work though they would? We seem not to have a good set of answers here.

3) Corruption: National and international banks who are protected by lobbying relationships with the Feds are impossible to hold to account locally. Federalism is supposed to be our method of protection here -- it's supposed to provide a level of government that is better able to handle larger-scale actors who may be beyond the reach of a state. Instead it has been captured by the people it was supposed to regulate. The danger of the South's model is that it is inviting state-level corruption of the same kind that has already captured the Federal government. It is a short walk from offering tax breaks and fewer regulations to offering special protections from torts or lawsuits, or to structuring regulations in a way that actually allows bad behavior by the wealthy corporations you'd like to court.

Of these problems, only problem #2 even conceptually might be amenable to solutions of the type this author would like to see. Yet solutions of that type have failed -- see the links under 'such programs have had flourishing enrollment,' above. There isn't a general agreement about what the solutions ought to be in any case; and there's a balance to be achieved between any solution and the general strategy of encouraging the growth of the private sector.

So it could be that the reason there aren't more anti-poverty programs in the South is that the South doesn't want them. That doesn't mean there are no problems, and poverty is certainly a serious issue. It just means that we don't agree about how to address the issue or solve the problems. Government at any level isn't helpful if you don't know what you want it to do; and if you just start screwing around and trying things, you're apt to upset that general strategy of business development. We are only willing to do something that damages the general strategy in the rare case that it has come to command broad democratic agreement that the cost would be worth the benefits.

None of that has anything to do with race.

* This begs the question of why the South didn't grow instead of the Rust Belt, or begin its upswing earlier. After all, the policy is very old. The answer is partially one of infrastructure development: the South was deeply impoverished by the Civil War, and had less money for the infrastructure on which an industrial economy depended; impoverishment only got worse outside of the city centers, because the South's economic structure postwar was a cotton monoculture, which meant that the economic activity was wealth-extracting rather than wealth-creating from the perspective of the region. (It created lots of wealth for those down the line, who were buying cotton cheaper every year and turning it into finished products: but that was done outside the South.) Broad educational attainment was less for a long time for similar reasons, and an industrial worker must be basically educated.