The American Family Plan unveiled by President Biden last week is his attempt to strengthen the economy by supporting families with additional tax credits and free education. The cost of the initiatives would be offset by increasing taxes on top earners and capital gains. It’s more of the same. We need a different framework for reducing poverty in this country, one that focuses on ownership.
When I was about seven years old, my mother asked me to walk down to the grocery store, which was about a football field from our house. I remember walking in the store and grabbing a handful of items and then going to the cash register. As I held out my hand which contained a pocketful of coins, the cashier looked down in disgust. Embedded among the change were several food stamps. I was too young then to understand this reaction, but the shame of poverty is something you never forget.
In our country, there are thoughts that bind us. One of the most important ones is that, no matter who your parents are or who your ancestors were, no matter the color of your skin, no matter your current station, you can elevate yourself. This is even embedded into popular culture. Of course, we fall short, but all agree on the principle or the goal. If you look at other countries, you realize how different and precious this is.
Other countries can attempt to claim this virtue, but really it remains exclusively an American construct. America alone was born as an accidental experiment where we proved that your ability is tied to you and only you, not to some genetic lineage transferred from generation to generation. The byproduct for us as a people is hope: hope that we can control our own destiny. We come to love Gatsby because he manifests this American ideal.
So, does the promise of America still hold true? In 1964, the poverty rate in the United States was 19 percent. Since January of last year, it has ranged from 15.5 percent to 16.7 percent. Some reading this will say that the standard of living has improved, and they are right, but the standard of living has improved because of the positive effects of the capitalist system and technology.
Even the poorest among us often have access to things that the poor in other countries don’t have- cars, television sets, phones, etc. But we also remember the argument that Michael Harrington (who was a devoted socialist) made in his seminal work, “The Other America,” that poverty is a social disease, not just an economic one. It affects, not just the amount of money you have, but other things such as your level of health care, your education, the amount of violence in your neighborhood and, probably most important, the way you view yourself. Harrington’s thesis remains true today. Poverty rapes dignity from the people who live in it.
And we know that poverty is sticky. In the United States, for every 100 people who are born poor, about 4 will be out of poverty when they die. Are the other 96 kids 100 percent responsible for their outcomes at birth? Of course not. So, the truth is that it is almost impossible to rise out of poverty if you are born poor.
There are two blind enemies in the battle to eliminate poverty. First, there are those who act as if poverty is not even a problem. These are the ones who think we have a level playing field, more or less. Consequently, the issue is moot for them. It is that simple — you don’t need to fix something that isn’t broken.
Second and more insidious, there are those who want to solve poverty by handing things out. At root, their proposals demonstrate that they think poor people don’t have the ability to lift themselves. Otherwise, why would they propose giving people money and things for work not performed or value not created. At root, these people are arrogant and patronizing to the poor. They also forget that people don’t value things they don’t work for. They live in the self-satisfied full confidence that they are helping, when they are actually probably cementing the problem.
So, the question becomes how can people rise up — what do we do? Left to the politicians, the problem of poverty is not likely to change. They are so mired in their own dogma they cannot solve problems that require real thought … and action.
I look to history. The way every group has risen is through ownership. People need to own things — homes and businesses as a start. There is a class of people who don’t own anything — even their furniture. The solution to this is teaching people, especially at an early age, how to own things and create wealth for themselves. This requires an entirely different approach to poverty than the one we have used for almost 100 years.
Brian Hamilton is the founder of Inmates to Entrepreneurs (inmatestoentrepreneurs.org). He is a leading voice on the power of ownership to transform lives. He is star of the ABC show, “Free Enterprise,” where he helps people who were incarcerated start their own businesses. He is also the founder of Sageworks, where he developed an artificial intelligence platform used today to help millions of small businesses understand their financial information.