This year marked the 50th anniversary of President Lyndon B. Johnson declaringan “unconditional war on poverty in America.” Where do we find ourselves interms of that goal today?

In a five-decade stalemate. First, the good news: life expectancy is longer, infant mortality much lower,

and education more accessible than in the 1960s. Living standards and conven-iences have improved dramatically for everyone, including the poor, over the past 50 years.

Now, the bad news: it wasn’t the War on Poverty that brought any of these improvements. They can be attributed to general economic growth, tech-nological improvements, and falling relative prices for domestic goods. Anddespite $1 trillion spent every year on federal antipoverty programs, millions of Americans are still in poverty and living without much hope or opportunity. It may be “easier” to be poor today than in 1964, but the poverty rate is the

Poverty Relief That Lastsby AEI President Arthur Brooks

Issue No. 3, August 2014

Enterprise ReportRestoring Liberty, Opportunity, and Enterprise in America

same as when the war began. Perhaps even worse, however, is the increase in welfaredependency and workforce alienation.

As my colleague Nick Eberstadt has pointed out, the percentage of Americans who rely on government assistance for food or other sustenance has risen from 3.8 percent beforethe War on Poverty to 35 percent today. Since 1964, the percentage of working-age menwho are completely out of the workforce has nearly tripled, from 6 percent to 17 percent,and the percentage of children raised in a two-parent home—a key indicator of future earn-ing potential—has dropped about 20 percentage points to 69 percent.

In other words, economic growth through free enterprise has made life more bearablefor people at the bottom, but opportunity has fallen and welfare dependency has risen. We must do better. But how?

The answer is a safety net that relieves the indigent without creating dependence, whilebringing the secret to true opportunity and dignity—capitalism—to the poor.

AEI scholars are identifying and propagating those ideas to start a true social move-ment for change. We are drawing people into our cause regardless of party or ideologicalpersuasion and fighting for the public policies—and cultural institutions—that lift up the mostvulnerable among us.

AEI has a long track record in this regard, including the work of scholars Robert Bork,Jeane Kirkpatrick, Irving Kristol, Charles Murray, Michael Novak, Ben Wattenberg, andJames Q. Wilson. Today, their mantle is being taken up by AEI scholars like Robert Doar,Kevin Hassett, Rick Hess, Andrew Kelly, Ramesh Ponnuru, and Michael Strain—several ofwhom were featured in the July 6 New York Times Magazine cover story, an AEI-heavy lookat policy reforms centered on the poor that are beginning to shake up Washington.

AEI scholars are identifying a way forward with free enterprise ideas that will lift up themost vulnerable in our society and restore the middle class by bringing transformation, relief,and opportunity to all Americans. Thank you for supporting AEI in this moral cause.

Arthur BrooksPresident, AEI and Beth and Ravenel CurryChair in Free Enterprise

A Conservative Vision for Social Justice, ARTHUR BROOKS

Capital and Poverty, MEGAN MCARDLE

From Policy to Practice: What Works in Helping the Poor, ROBERT DOAR

In the first of AEI’s Vision Talks, Arthur Brooks, AEI Morgridge Fellow in Poverty StudiesRobert Doar, and journalist Megan McArdle address the failings of the War on Povertyand offer concrete policy solutions for expanding opportunity to those left behind. Watchthe three talks at thepursuitofhappiness.com/the-big-picture.

AEI’s education policy scholars have spurred a growing movement for what the team’s director, Rick Hess, calls “cage-busting” teaching and schoolleadership. While it is widely accepted that federallaws, district policies, collective bargaining agree-ments, and generally creaky bureaucracies hamperpublic school teachers, principals, and superintend-ents in their reform efforts, these leaders have a lot

more power to invigorate their classrooms and schools than they realize—if they adopt a cage-busting mentality.

Hess’s inspiring 2013 book Cage-Busting Leadership and its sequel, The Cage-Busting Teacher, due out next year, draw lessons from the experiencesof the most dynamic school reformers in the country. Anecdotes include:

Washington, DC, Chancellor of Public Schools Kaya Hendersonwas told by the teachers’ union’s lawyers that she couldn’t give her school principals a much-needed $30,000 raise unless school businessmanagers got the same raise across the board. Undeterred, she found a loophole in the contract that allowed her to grant the raise for “talentrecruitment,” and when the union said, “You can’t do that,” she said, “Yes, I can.”

New York City Deputy Chancellor of Education David Weinerlearned his first cage-busting lesson as a young elementary school princi-pal. He needed to fire an abusive teacher, but Human Resources told himhe didn’t have the authority to do it. So he bought a laptop and set up his office in the teacher’s classroom, until after six weeks he had enoughevidence to force her resignation. “Maybe I was young and naïve, but I’mglad I did it,” Weiner recalled.

Hess helps education leaders apply his research principles through a series oftargeted, high-level seminars that he hosts around the country with superintendents,school boards, principals, and teachers. Over the past year alone, Hess has ledmore than 20 seminars with leaders from some of the largest and most innovativeschool districts in the country. The education community has taken notice of thedynamic power of the cage-busting mentality, and today, Hess’s ideas are beingincorporated by leaders across the country. As one school board leader wroterecently, “Never again will I take the words ‘we can’t do that because of the contract’ without first asking specifically where it says it in the contract!”

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Cage-Busting Education

Senators Tim Scott (R-SC) and Lamar Alexander (R-TN)unveiled proposals to free up billions of federal education dollars to fund school choice scholarshipsfor children in all 50 states and DC.

Representative Todd Rokita (R-IN), chairman of the USHouse Subcommittee on Early Childhood, Elementary,and Secondary Education, introduced his CHOICEAct, which would expand school choice for low-income families in Washington, DC.

Rick Hess, Kaya Henderson, and 4.0 Schools CEOMatt Candler discuss the future of education reform.

Recent Education PolicyEvents at AEI

For more on AEI’s Education Policy StudiesProgram and future events, please visit www.aei.org/policy/education.

AEI continued its series of dialogues on freedom, happiness, and humanflourishing with world-renowned leaders, such as His Holiness the Dalai Lama and Chen Guangcheng(below), with a June 24 event featuringSri Sri Ravi Shankar, a leading Hinduspiritual figure. In conversation withArthur Brooks, Sri Sri, whose Art ofLiving Foundation is active in 152countries, discussed the importance ofcompassion to capitalism, explainingthat humanism is a precursor for a

just society. Wealth is good, and “hard work keeps you out of trouble,”as Sri Sri put it. A compassionate society can use these things to improvethe lives of all its members.

More than 300 attendees filledAEI’s conference center to hear the discussion in person, another 2,000watched the live video stream, andAEI’s YouTube video of the event hasbeen viewed more than 9,000 times so far.

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Marking the 25th Anniversary of the Tiananmen Square MassacreChinese Dissident Chen Guangcheng on the Way Forward for China

Speaking publicly in English for the first time, Chinese activist ChenGuangcheng reminded an AEI audiencethat the quest for human rights and free-dom in China is alive a quarter-centuryafter Tiananmen Square. Blind from an early age, Chen taught himself thelaw two decades ago to represent him-self in a tax case. He received interna-tional attention for successfully filing aclass-action lawsuit against Chineseauthorities on behalf of women victim-ized by enforcement of China’s one-child policy—and was soon arrested

and jailed. He fled to the United Stateswith his family following his release andsubsequent harassment.

The visit highlighted the connectionthat both Chen and AEI stress betweenfreedom and free enterprise and humanhappiness. While China’s economicgrowth may be impressive in fiscalterms, when the state stamps out culturaltransformation—the first pillar of a flour-ishing, happy life, as AEI PresidentArthur Brooks explained—a people’spotential is tragically limited. More than100 people attended the speech at AEI

in early June, over 1,000 more live-streamed the event or have watched itsince, and five international cameracrews covered the event.

“Capitalism can flourish well withcompassion, and compassioncan only happen with peoplewho can afford to show compas-sion and do something about it.”

—Sri Sri Ravi Shankar

“Twenty-five years ago today, a great evil was done by those in power inChina. They killed hundreds of their own people to silence them. They havetried to silence me. But I will not be silent. I want to speak to you today, inEnglish, so no one will forget that terrible day.”

—Chen Guangcheng

Sri Sri Ravi Shankar at AEI

Chinese activist Chen Guangcheng and Arthur Brooks

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On May 22, the 50th anniversary of President Lyndon Johnson’s “Great Society”speech that launched his liberal reform agenda and War on Poverty, AEI hosted the launch event for a new reform-minded publication, Room to Grow:Conservative Reforms for a Limited Government and Thriving Middle Class. Edited by the Washington-based YG Network, this compilation of policy-specificessays offers the framework for a new domestic policy agenda that will empowerindividuals and increase human flourishing by promoting free markets in the placeof failed, outdated government programs.

The day’s program included Arthur Brooks moderating a discussion withRepresentative Eric Cantor (R-VA) and Senators Tim Scott (R-SC) and Mike Lee (R-UT); Senator Mitch McConnell’s (R-KY) keynote address; and a panel featuringpublic intellectuals Ross Douthat, Yuval Levin, Ramesh Ponnuru, Reihan Salam, and Peter Wehner. “The event was a success by almost every measure,” declaredthe New York Times Magazine July 6 cover story on the Republican Party’s idearenaissance.

Room to GrowAEI Scholars Among “Reform Conservatives”Offering Empirical Policy Ideas for the Future

Senators Mike Lee (R-UT) and Tim Scott (R-SC), andRepresentative Eric Cantor (R-VA)

Senate Minority Leader Mitch McConnell (R–KY)

The Curmudgeon’s Guide to Getting AheadDos and Don’ts of Right Behavior, Tough Thinking,Clear Writing, and Living a Good LifeWhat started as Charles Murray’s advice column for AEI interns and research assis-tants was published this year as a book that can be useful to all college graduatesand young professionals in America. The Curmudgeon’s Guide to Getting Aheadhelps young people navigate their entry into the workplace, win the approval ofprickly employers, and begin their pursuit of a life well lived. A few of Murray’s tips:

• Always be aware that what passes for good grooming and fashionamong people in their 20s can still make you look like a slob to peoplein their 50s.

• If you do not start your career until you are 30, that still gives you 35 years to make it professionally. If you cannot make it in 35 years,you were not going to make it in 40 or 45.

• Marry someone with similar tastes and preferences. It is absolutely crucial that you really, really like your spouse.

• Excise the word “like” from your vocabulary.

W. H. Brady Scholar Charles Murray

—Jon Buchleiter, University of NorthCarolina–Chapel Hill, Class of ’16

Buchleiter spent the spring of 2014 taking courses in public policy inWashington and interning at AEI, and he was excited to stay for the summer. He is editor-in-chief of the Hill Political Review, UNC’s student-run, nonpartisan politics and current events magazine, as well as a member of UNC’s AEIExecutive Council, AlexanderHamilton Society chapter, andRoosevelt Institute Foreign PolicyCenter. He will be pursuing a careerin national security and intelligence.

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Twenty-five top college students traveledto Washington in June to participate inthe 2014 AEI Summer Institute. Duringthe six-week program, these future lead-ers learned the principles and methodsof public policy analysis from AEI schol-ars including Arthur Brooks, CharlesMurray, Michael Barone, and JonahGoldberg. During a special guest-lectureseries, students interacted with prominentpolicymakers and thinkers WilliamKristol, Newt Gingrich, journalist Megan

McArdle, former Merck ChairmanRaymond Gilmartin, Carlyle GroupDirector Edward Mathias, and the teamsat Facebook’s Washington, DC, officeand the German Embassy.

This year’s class was selected onthe basis of academic achievement,leadership potential, and demonstratedinterest in public policy, and it includedsix students who are AEI ExecutiveCouncil members in charge of AEI onCampus programming at their schools.

“I can’t think of abetter way tospend my summer.Taking classes fromArthur Brooks,

Charles Murray, Nick Eberstadt,Fred Kagan, and others at AEI is a once-in-a-lifetime opportunity.During my spring internship I discovered just how world-class thescholarship is here—my friends areso jealous that these scholars aredevoting a few weeks of their timeto teaching me and 24 others.”

“It’s exciting to be surrounded by such high-caliber students who are passionate about free enterprise and motivated by the good it can do for others.”

—Luciana Milano, Harvard University, Class of ’14

A native of Texas, Milano has a deep interest in US-Mexico relations. She hasserved as a pro-bono Spanish translator for legal cases in her home town andappeared on Fox News’s O’Reilly Factor. She plans to become a prosecutor in her home state, working to address the drug trafficking-related challenges ofher Rio Grande Valley community.

(Left) Caleb Jackson, Institute for ResponsibleCitizenship, Hampton University; AmberSmoczyk, Summer Institute, NYU; and Lexi Vankevich, Summer Institute, LSE. (Center) Summer Institute students meet withBloomberg columnist Megan McArdle. (Right) Students talk to Institute for ResponsibleCitizenship President William Keyes.

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Eugene Fama, winner of the 2013Nobel Prize in Economics and memberof AEI’s Council of Economic Advisers,received AEI’s Irving Kristol Award onMay 6 at the AEI Annual Dinner inWashington, DC. This year’s dinner wasgenerously underwritten by former Famastudent and AEI trustee Clifford S.Asness of AQR Capital Management,

and Fama was interviewed onstage by Wall Street Journal Editorial PageEditor Paul Gigot. More than 1,100members of the AEI community attendedthe dinner, and we are grateful to theevening’s sponsors, whose support signals their belief in AEI’s policyresearch and efforts in the fight for free enterprise.

AEI’s 2014 Annual Dinner

Eugene Fama and Paul Gigot

AEI President Arthur Brooks and Board ChairmanTully Friedman

AEI National Council member Anne Raymondand Catherine Cox

AEI trustee Gordon Binder, former Senator and AEIVisiting Scholar Phil Gramm, and AEI's Arthur F. BurnsFellow in Financial Policy Studies Peter Wallison

AEI President Arthur Brooks addresses the 2014 Summer Institute.

Rachel Brand, a Chamber of Commerce chiefcounsel and the former head of legal policy at the Justice Department, talks to Summer Institute students about the effects of regulation on businesscompetitiveness.

Summer Institute student Fatema Ghasletwala,George Washington University, speaks up in class.

Students from the Institute for Responsible Citizenshipand the Summer Institute met with AEI trustee,Harvard Business School professor, and formerMerck Chairman Raymond Gilmartin.

Weekly Standard Editor Bill Kristol leads a classand discussion of American politics with SummerInstitute students.

Summer Institute students Pranay Udutha, University ofGeorgia (center) and Wilson Shirley, NorthwesternUniversity (right), with new friend Kirklan Ventrella,Hillsdale College, enjoy AEI’s reception for Washing-ton, DC, policy interns.

The American Enterprise Institute is a community of scholars and supporterscommitted to expanding liberty, increasing individual opportunity, andstrengthening free enterprise. AEI’s work is made possible only by the financialbacking of those who share our values and support our aims.

To learn more about AEI’s scholars and their work, visit www.aei.org | www.american.com | www.aei-ideas.org

To find out how you can invest in our scholars’ work, visit www.aei.org/support

1150 Seventeenth Street, NW Washington DC 20036

202.862.5800 | www.aei.org

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www.facebook.com/AEIonline

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www.youtube.com/AEIVideos

AEI recently launched an AlumniProgram which already counts 150members. As AEI’s scholars, staff,research assistants, interns, andSummer Institute students move on tothe next phases of their professionallives, they remain an important part ofthe AEI community. This new programwill help our alumni stay connectedwith AEI and help the Institute reachnew, growing, and influential audi-ences with its free enterprise message.

AEI alumni have become senioradvisers to Congress’s top committees,deputy secretaries and directors innearly every executive department of government, senior fellows anddirectors at influential policy organiza-tions, and broadcast and print journal-ists. Several, after building successfulcareers beyond AEI, have returned tothe Institute as scholars and fellows.

Our new Alumni Program offersnetworking opportunities and the

ability to remain engaged with AEIthrough special programming, such as bimonthly conference calls with AEI scholars on current topics, privateAEI gatherings in cities around thecountry, and an invitation to AEI’sAnnual Dinner.

In turn, AEI’s alumni help connectour scholars and their work to policyleaders and continue to help attract the best and brightest talent to theInstitute. Most importantly, alumni takethe free enterprise principles learned at AEI into the next stage of their professional careers.

AEI development associateGwendolyn Gorse would be happyto hear from you if you or someone you know is interested in joining theAlumni Program. Membership is free, and there are various levels of involvement. Please contact her at 202.862.5852 orgwendolyn.gorse@aei.org.

Jonah Goldberg began his careerat AEI as a research assistant forscholar Ben Wattenberg from 1992to 1994. He went on to producedocumentaries for PBS before joining National Review and help-ing to found National ReviewOnline. Now a contributing editorfor National Review and a colum-nist for the Los Angeles Times,Goldberg returned to AEI as afellow in 2010. Goldberg is also a member of the board of contribu-tors of USA Today. He has receivedthe Lowell Thomas and Robert J.Novak journalism awards and written two New York Times best-selling books, The Tyranny ofClichés (Sentinel HC, 2012) andLiberal Fascism (Doubleday, 2008).

AEI Launches New Alumni ProgramInstitute’s Network Holds Potential for Wide-Ranging Impact