August Turak

Author Consultant Speaker

Is The American Dream Dead? The Four Inconvenient Truths Behind Income Inequality

In his latest book The Price of Inequality, Columbia's Joseph Stiglitz argues that America “is no longer the land of opportunity” and “the ‘American Dream’ is a myth.” This Nobel laureate marshals a mind numbing array of statistics to argue that the rich are getting richer and the poor are getting poorer and that never the twain shall meet: Social mobility in America, says Stiglitz, is a thing of the past.

But apparently all is not lost, according to Stiglitz if we just make Brazil our model by improving education and nutrition and eliminating “corporate welfare” the American Dream may yet rise phoenix-like from the ashes.

While I share the concerns of Stiglitz and other apocalyptic prophets over poverty and income inequality, I find the causes he cites and the medicine he prescribes far less compelling. Our educational system is in fact abominable; better nutrition is always a good thing; and “too big to fail” corporate welfare is inexcusable. But there is a far more serious underlying cause to income inequality that almost no one, including Dr. Stiglitz, wants to talk about. This elephant in the parlor is apparently too big to be acknowledged let alone ushered back to the zoo.

The Wall Street Journal recently cited testimony that Ron Haskins of the left-leaning Brookings Institution gave before the Senate Finance Committee. Haskins emphasizes “the importance of individual initiative in reducing poverty and promoting economic success.” He cites “three elementary rules” that based on census data can “virtually assure” that young people and their families will not only “escape poverty,” but have a “72% chance of joining the middle class (defined as above $55,000 a year in 2010).”

Rule 1: Complete at least a high school education.

Rule 2: Work full time.

Rule 3: Be married but wait until at least age 21 before getting married and having children.

Haskins goes on to say that the prospects for people who violate all three rules are almost exactly the reverse: their chances of being poor soars to 77% and their chance of making the middle class craters to just 4%.

“Individual effort and good decisions about the big events in life are more important than government programs. Call it blaming the victim if you like, but decisions made by individuals are paramount in the fight to reduce poverty and increase economic opportunity in America.”

Haskins willingness to step out onto such thin, politically incorrect ice is incredibly refreshing, but there are two additional points I would add. First a fourth rule: Don’t abuse alcohol and drugs. Second, the most critical of Haskins’ rules is get married, stay married, and give your children the incredible leg up that only a home that includes a father can provide.

As if in answer to Haskins’ prayers, one week later the Journal ran an article, Asians Top Immigration Class, based on a Pew Research Center study: The Rise of Asian Americans. According to the study’s editor, “Asians exceed Americans on educational credentials and socioeconomic markers of success despite being predominately first generation immigrants.” Half of Asians get a college degree compared with 30% of Americans and their median household income is $66,000 versus $49,000 for Americans.

Apparently Asian immigrants have yet to get the memo from Stiglitz that the American Dream is dead, but what is most striking are the reasons that Pew cites for their remarkable success. “As a group, Asians place more value than Americans overall on marriage, parenting, and careers.”

Asians, according to Pew, are “more likely than the overall U.S population to be married, or live in a multigenerational household, and their children are more likely to be raised in a two-parent home.” As for blaming the victim, “Irrespective of their country of origin, Asians overall believe that American parents are too soft on their children.”

The editor concludes, “They [Asians] are the highly skilled workforce of the 21st century, but they also bring traditional values (my italics).

Asian immigrants are living breathing evidence that the American Dream is not only alive and well, but is not living in Brazil as Dr. Stiglitz would have us believe. However like oil from Saudi Arabia, according to Pew we are now importing the much maligned “family values” that make the American Dream possible from China, India, Japan, Korea, the Philippines, and Vietnam.

Dr. Stiglitz’s wrong-headed diagnosis is doubly dangerous because it fuels class envy while reinforcing the cult of victimhood that has proven so damaging to African-Americans in particular. What is moribund is not the American Dream, but the traditional values that Asian-Americans embrace. The same values that made the American Dream possible in the first place for my own immigrant grandparents and millions like them.

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I’ve argued repeatedly that great leaders face facts no matter how distasteful those facts may be. Communism for example is at heart neither an economic nor a political model. Instead it is a theory of human nature that tried -unsuccessfully and at the point of a bayonet- to prove that people are essentially cooperative and that competition and private property were unnatural aberrations foisted on people by a corrupt social system.

But what is far worse than being wrong is that Communism’s apparatchiks kept at it for 70 years despite overwhelming evidence that there was something fundamentally wrong with their underlying assumption about people. Advocates were so emotionally invested that they clung to the notion that Marxist theory was right and merely the implementation wrong.

All the Communist cadres needed was “more time” and a few more gulags to bring their worker’s paradise to fruition. To this day there are otherwise rational people who argue that "authentic" Communism was “never tried,” and that Marx will yet be proven right about the nature of the human animal.

America is in an analogous situation. Despite compelling evidence like the achievements of Asian immigrants, we refuse to accept the basic truth about family and parenting that our ancestors spent countless generations working out through trial and error. The so-called “social experiments” and “alternative lifestyles” that we’ve indulged in over the last sixty years under the banner of “diversity” and “tolerance” simply do not work for the overwhelming majority of Americans. For all too many, alternative lifestyles are just a one way ticket to underachievement and a cycle of poverty.

The inconvenient truth is that America’s most urgent problems are not economic, political, or even educational: They are social and cultural. The fundamental causes of income inequality are illegitimacy, divorce, single parent households, promiscuity, and a cultural miasma that treats fathers as ancillary and largely superfluous sperm donors.

Getting the proverbial cat back into the bag is a daunting task, but we will never begin unless we first recognize the real source of income inequality and poverty in America. Instead, like Communist apparatchiks, we will remain in denial and follow Dr. Stiglitz and his legions of acolytes down the politically safe and correct path of treating symptoms with remedies that only make the patient worse.

Instead of burying his head in the sands of Brazil it is high time Dr. Stiglitz looked to the rising sun of Asia’s immigrants for answers.


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