Social Policy and the American Welfare State

1
C h a p t e r 1

Source: The Image Works
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2 part 1 American Social Welfare Policy
would restrain Obama’s ambitions. Massive deficits
left by the Bush administration, compounded by a
severe global financial crisis and two unfunded wars,
meant that economic issues would trump other priorities.
Reduced tax revenues would impede the
ability of the government to meet existing obligations,
let alone expand social programs. Obama’s
centrist inclinations to build bipartisan support for
his legislative agenda failed as newly elected extremist
Tea Party legislators squashed most of his attempts
at compromise. Instead, ideologically driven
legislators focused on social issues such as abortion,
and even resuscitated the previously long-dead
issue of contraception. Parts of the nation had not
just turned right, but hard right. Added to this was
the side-show around Obama’s birth certificate,
doubts about whether he was Christian or Moslem,
accusations that he was socialist, and various other
distractions.
The 2012 presidential election was marked
by the often extreme positions taken by Republican
presidential contenders. Long dormant issues
like access to birth control resurfaced as Republican
candidates vied for the support of the religious
right and Tea Partiers. This political climate led to
an anti-science orientation, often reflected in wildly
unsubstantiated claims. For instance, Jeanine Notter,
a Republican state senator from New Hampshire,
claimed that medical evidence showed that
birth control pills can cause prostate cancer. Todd
Akin (R-MO) stated that doctors had told him that
it is extremely rare for “legitimate” rape victim to
become pregnant: “If it’s a “legitimate” rape, the
female body has ways to try to shut that whole
thing down.”2 Despite the lack of any medical
evidence, former Republican presidential candidate
Michelle Bachmann (R-MN) warned that
a Tampa mother told her how her little daughter
suffered from mental retardation after getting the
HPV (human papilloma virus) vaccine. Other former
Republican candidates, like Texas governor
Rick Perry, believe that evolution is a questionable
theory. John Shimkus (R-Ill) cited the Book of
Genesis as evidence that climate change is a hoax
since God promised Noah he would not destroy the
Earth due to people’s wickedness. Rick Santorum
cited climate change a travesty of scientific research
designed to create panic that would lead to further
governmental control of people’s lives.3 Nowhere
is the power of conservative elements more evident
than in the gun control issue. Despite the spate of
mass shootings—i.e. 2007 Virginia Tech shooting
Social welfare policy is best viewed through
the lens of political economy (i.e., the interaction
of economic, political, and ideological forces).
This chapter provides an overview of the American
welfare state through that lens. In particular, it
examines various definitions of social welfare policy,
the relationship between social policy and social
problems, and the values and ideologies that drive
social welfare in the United States. In addition, the
chapter examines the effects of ideology on the U.S.
welfare state, including the important roles played
by conservatism and liberalism (and their variations)
in shaping welfare policy. An understanding
of social welfare policy requires the ability to
grasp the economic justifications and consequences
that underlie policy decisions. As such, this chapter
contains a brief introduction to Keynesianism, free
market economics, socialism, and communitarianism,
among others.
American social welfare is in transition. Starting
with the Social Security Act of 1935, liberals argued
that federal social programs were the best way
to help the disadvantaged. Now, after 70 years of
experimenting with the welfare state, a discernible
shift has occurred. The conservatism of U.S. culture—so
evident in the Reagan, Bush (both Bushes),
and even Clinton and Obama presidencies—has left
private institutions to shoulder more of the welfare
burden. For proponents of social justice, the suggestion
that the private sector should assume more
responsibility for welfare represents a retreat from
the hard-won governmental, social legislation that
provided essential benefits to millions of Americans.
Justifiably, social advocates fear the loss of
basic goods and services during the transition in
social welfare.
The election of Barack Obama as the 44th
President of the United States in 2008 not only
broke a racial barrier but also promised to sweep
away the strident conservatism that had defined the
presidency of George W. Bush. The Obama victory,
with 52 percent of the vote and increased Democratic
majorities in both chambers of Congress,
heartened liberals who had anticipated an expansion
of government social programs. However, the
euphoria among liberals soon gave way to despair
as the Democratic Party lost control of the House
of Representatives and barely held on to the Senate
in the midterm elections of 2010.
While liberal pundits hailed the resurgence of
“a vast new progressive movement,”1 structural limits
and the emergence of a strong reactive element
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chapter 1 Social Policy and the American Welfare State 3
voting patterns between urban and rural voters,
young and old voters, religious and non-religious
voters, white and minority voters, and women and
male voters.8 These patterns reflect differing visions
of American society and where it should be going.
Structural features of the American welfare
state militate against a major expansion of government,
per se. A pluralistic mix of private and public
services is an overriding feature of U.S. social
welfare. As in other realms, such as education, in
social welfare private institutions coexist alongside
those of the public sector. U.S. social welfare has a
noble tradition of voluntary citizen groups taking
the initiative to solve local problems. Today, private
voluntary groups provide valuable services to
AIDS patients, the homeless, immigrants, victims of
domestic violence, and refugees.
Social welfare has become big business. During
the last 30 years, the number of human service
corporations—for-profit firms providing social
welfare through the marketplace—has increased
dramatically. Human service corporations are
prominent in long-term nursing care, health maintenance,
child day care, psychiatric and substance
abuse services, and even corrections. For many welfare
professionals, the privatizing of social services
is troubling, occurring as it does at a time when
government has reduced its commitment to social
programs. Yet, human service corporations will
likely continue to be prominent players in shaping
the nation’s social welfare policies. As long as U.S.
culture is democratic and capitalistic, entrepreneurs
will be free to establish social welfare services in
the private sector, both as nonprofit agencies and as
for-profit corporations.
The mixed welfare economy of the United
States, in which the voluntary, governmental,
and corporate sectors coexist, poses serious questions
for social welfare policy. To what extent can
voluntary groups be held responsible for public
welfare, given their limited fiscal resources? For
which groups of people, if any, should government
divest itself of responsibility? Can human service
corporations care for poor and multiproblem
clients while continuing to generate profits? Equally
important, how can welfare professionals shape
coherent social welfare policies, given the fragmentation
inherent in such pluralism? Clearly, the
answers to these questions have much to say about
how social welfare programs are perceived by human
service professionals, their clients, and the taxpayers
who continue to subsidize social programs.
that left 33 dead; 2011 Tucson shooting that killed
six people and wounded former U.S. Representative
Gabrielle Giffords; and the 2012 Aurora Colorado
massacre—no gun legislation has been passed.
The response of Obama and presidential contender
Mitt Romney was to pray for the families of the
deceased.
Other wild allegations and statements circulated,
such as Allen West’s (R-FL) charge that
78 to 81 members of the Congressional Progressive
Caucus of the U.S. Congress were members of the
Communist Party. That would be quite a feat since
5 percent of the total 2,000 (probably inflated)
members of the U.S. Communist Party would have
to make their way from a tiny office in New York
City to the U.S. Congress.4 Conservative rock and
roll singer Ted Nugent’s commented that if Obama
were re-elected, he would either be dead or in jail.
On air, country singer Hank Williams, Jr. compared
Obama to Hitler. The election also illustrated the
nation’s regional fissures. For instance, a 2012 Public
Policy poll of registered Republican voters found
that 45 percent of Alabamians and 52 percent of
Mississippians believed that Obama is a Muslim
(the other 40 percent were not sure). Only about 25
percent of those voters believed in evolution.5
By August 2012, the Republican Party had settled
on former Massachusetts Governor Mitt Romney
as their presidential candidate. The subsequent
presidential election proved to be one of the most
costly and acrimonious in recent memory. All told,
the 2012 presidential campaigns spent upwards of
$2 billion, much of that from super PACs. However,
the final list of 2012 expenditures might never be
known since some of the biggest spending groups
were nonprofit organizations that were permitted
to hide their spending from public scrutiny.6
This spending spree was spurred on by the U.S.
Supreme Court decision in Citizens United v. Federal
Election Commission, which maintained that
the First Amendment prohibited the government
from restricting independent political expenditures
by corporations and unions.7 In the end, President
Obama’s centrist positions led to a win of 303
electoral votes compared to George Romney’s 206
votes.
The 2012 election also illustrated the deep division
in American society between the liberal states
(e.g., the Northeast, West Coast, and some Western
and Midwestern states) and the highly conservative
Southern and rural areas. A breakdown of the state
and country votes highlighted the vastly different
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4 part 1 American Social Welfare Policy
simplification of benefits provided to those deemed
needy. Benefits provided through governmental
social welfare policy include cash, along with noncash
or in-kind benefits, including personal social
services.11 Cash benefits can be further divided into
social insurance and public assistance grants (discussed
in depth in Chapters 10 and 11).
In-kind benefits (provided as proxies for cash)
include such benefits as food stamps; Medicaid;
housing vouchers; Women, Infants, and Children
(WIC) coupons; and low-income energy assistance.
Personal social services are designed to enhance
relationships between people as well as institutions,
such as individual, family, and mental health
treatment; child welfare services; rehabilitation
counseling; and so forth. Although complicated,
this classification reflects a common theme—the
redistribution of resources from the better-off to the
more disadvantaged. This redistributive aspect of
social welfare policy is generally accepted by those
who view social welfare as a legitimate function of
the state. Governmental social welfare policy is often
referred to as “public” policy, because it is the
result of decisions reached through a legislative
process intended to represent the entire population.
But social welfare is also provided by nongovernmental
entities, in which case social welfare
policy is a manifestation of “private” policy. For
example, a nonprofit agency with a high demand
for its services and limited resources may establish
a waiting list as agency policy. As other agencies
adopt the same strategy for rationing services, clients
begin to pile up on waiting lists, and some are
eventually denied services. Or consider the practice
of “dumping,” a policy that has been used by some
private health care providers to abruptly transfer
uninsured patients to public hospitals while they
are suffering from traumatic injuries. Rescission
refers to terminating an insurance policy due to
concealment, misrepresentation, or fraud. In health
insurance, it refers to terminating a policy following
the diagnosis of an expensive illness, with the insurance
company claiming the policyholder withheld
relevant information about a pre-existing medical
condition. Although partially limited by the Patient
Protection and Affordable Care Act of 2010, it continues
in some form by some insurance companies.
Patients sometimes die as a result of private social
welfare policy.
Because U.S. social welfare has been shaped by
policies of governmental and nonprofit agencies,
confusion exists about the role of for-profit social
The multitude of questions posed by the transition
of social welfare is daunting. Temporarily
satisfied by the 1996 welfare reform bill, conservatives
have shifted their attention to advocating privatization
of social insurance programs such as Social
Security and Medicare. Past advocates of social justice
such as Jane Addams, Whitney Young Jr., and
Wilbur Cohen, to name a few, interpreted the inadequacy
of social welfare provision as an opportunity
to further social justice. It remains for another
generation of welfare professionals to demonstrate
the same imagination, perseverance, and courage
to advance social welfare in the years ahead. Those
accepting this challenge will need to be familiar
with the various meanings of social welfare policy,
differing political and economic explanations of social
welfare, and the multiple interest groups that
have emerged within the U.S. social welfare system.
Definitions of Social
Welfare Policy
The English social scientist Richard Titmuss
defined social services as “a series of collective interventions
that contribute to the general welfare by
assigning claims from one set of people who are said
to produce or earn the national income to another
set of people who may merit compassion and charity.”9
Welfare policy, whether it is the product of
governmental, voluntary, or corporate institutions,
is concerned with allocating goods, services, and
opportunities to enhance social functioning.
William Epstein defined social policy as “social
action sanctioned by society.”10 Social policy can
also be defined as the formal and consistent ordering
of human affairs. Social welfare policy, a subset
of social policy, regulates the provision of benefits
to people to meet basic life needs, such as employment,
income, food, housing, health care, and
relationships.
Social welfare policy is influenced by the context
in which benefits are provided. For example,
social welfare is often associated with legislatively
mandated programs of the governmental sector,
such as Temporary Assistance for Needy Families
(TANF). In the TANF program, social welfare policy
consists of the rules by which the federal and
state governments apportion cash benefits to an economically
disadvantaged population. TANF benefits
are derived from general revenue taxes (often
paid by citizens who are better off). But this is a
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chapter 1 Social Policy and the American Welfare State 5
services would rise. In that sense, social welfare benefits
help stabilize prices and maintain economic growth.
Social welfare policies also relieve the social
and economic dislocations caused by the uneven
nature of economic development under capitalism.
For example, one of the main features of capitalism
is a constantly changing economy where jobs
are created in one sector and lost (or exported) in
another, thereby resulting in large islands of unemployed
workers. Myriad social welfare programs,
such as unemployment insurance and food stamps,
help soften the transition. Finally, social welfare
policies are a means for rectifying past and present
injustices. For example, affirmative action policies
were designed to remedy the historical discrimination
that denied large numbers of Americans
access to economic opportunities and power. Teacher
incentive pay and other educational policies are
designed to help ameliorate the unequal distribution
of resources between underfunded urban and
better funded suburban school systems.
Social Work and Social Policy
Social work practice is driven by social policies
that dictate how the work is done, with whom, for
how much, and toward what ends. For example, a
social worker in a public mental health center may
have a caseload in excess of 200 clients. The size of
that caseload makes it unlikely that the worker will
engage in any kind of sustained therapeutic intervention
beyond case management. Or consider the case
worker who—in the midst of high unemployment—
must find employment for recipient mothers about to
lose benefits due to mandatory time limits. In these
and other instances, economic and political factors
structure the work of agencies and limit the ability of
workers to succeed in their job.
An ideological preference among policymakers
for private sector social services has resulted in less
funding for public agencies. In response to diminishing
revenues, public agencies adjust in predictable
ways, such as cutting qualified staff (or replacing
them with lower paid and less qualified workers)
and expecting existing staff to do more with less. In
addition, they promote short-term (or drug-based)
interventions to more cheaply process clients. Cuts
are made by freezing or reducing the salaries and
benefits of professional staff. Consequently, the
accomplishments of trained social workers depend,
in part, on the available agency resources.
service firms. The distinction between the public
and private sectors was traditionally marked by
the boundary between governmental and nonprofit
agencies. Profit-making firms are “private” nongovernmental
entities that differ from the traditional
private voluntary agencies because they operate on
a for-profit basis. Within private social welfare, it is
therefore necessary to distinguish between policies
of for-profit and nonprofit organizations. A logical
way to redraw the social welfare map is to adopt the
following definitions: Governmental social welfare
policy refers to decisions made by the state; voluntary
social welfare policy refers to decisions reached
by nonprofit agencies; and corporate social welfare
policy refers to decisions made by for-profit firms.
Social Problems and Social
Welfare Policy
Social welfare policy often develops in response to
social problems. The relationship between social
problems and social welfare policy is not linear, and
not all social problems result in social welfare policies.
Or, social welfare policies are funded at such
low levels that they are ineffectual. For example, the
Child Abuse Prevention and Treatment Act of 1974
was designed to ameliorate the problem of child
abuse, yet underbudgeting left Child Protective
Service (CPS) workers unable to promptly investigate
the increase in child abuse reports, resulting in
many children dying or undergoing serious injury.
Social welfare is an expression of social altruism
that contributes to the maintenance and survival of
society by helping to hold together a society that can
fracture along social, political, and economic stress
lines. Social welfare policy is also useful in enforcing
social control, especially as a proxy for more coercive
law-based measures.12 Simply put, the poor are
less likely to revolt against the unequal distribution
of wealth and privilege when their basic needs are
met. Social welfare benefits also subsidize employers
by supplementing low and nonlivable wages, thereby
maintaining a work incentive. Without social welfare
benefits like earned income tax credit (EITC),
employers would have to raise wages and therefore
consumer prices. Social welfare benefits also support
key industries, such as agriculture (food stamps),
housing (e.g., Section 8), and health care (e.g.,
Medicaid and Medicare). If social welfare benefits
were suddenly eliminated, several U.S. businesses
would collapse, and prices for many goods and
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6 part 1 American Social Welfare Policy
out essential services begin to require programs
to remedy problems associated with poor maternal
and infant health care, poverty, illiteracy, and
family disorganization. Although in 2011, the International
Monetary Fund (IMF) ranked the U.S.
seventh internationally in purchasing power parity
(what a family income can actually buy in a given
country) and 32nd in public spending on family
benefits, just above Lithuania, Latvia, Greece,
Malta, Mexico, Chile, and Korea.16
Social values are organized through the lens of
ideology. Simply put, an ideology is the framework
of commonly held beliefs through which we view
the world. It is a set of assumptions about how the
world works: what has value, what is worth living
and dying for, what is good and true, and what is
right. For the most part, these beliefs are rarely examined
and are simply assumed to be true. Hence,
the ideological tenets around which society is organized
exist as a collective social consciousness that
defines the world for its members. All societies reproduce
themselves partly by reproducing their ideology;
in this way, each generation accepts the basic
ideological suppositions of the preceding one. When
widely held ideological beliefs are questioned, society
often reacts with strong sanctions. Ideological trends
influence social welfare when adherents of one orientation
hold sway in decision-making bodies.
The hold of ideology on social policy is especially
strong in times of threat, such as the current “War
on Terror.” In this instance, social welfare policy
fades into the background as the perceived need
for national security takes center stage. U.S. social
history has seen periods where oppressed groups
assert their rights in the face of mainstream norms.
Such periods of social unrest strain the capacity of
conventional ideologies to explain social problems
and offer solutions. Sometimes social unrest is met
with force (i.e., the labor strikes of 1877) while in
other times, such as the Great Depression, it is met
with the expansion of social welfare programs.
The Political Economy of
American Social Welfare
The term political economy refers to the interaction
of political and economic theories in understanding
society. The political economy of the United States
has been labeled democratic capitalism—an open
and representative form of government that coexists
with a market economy. In that context, social
Social workers in private practice that depend
on managed care experience similar constraints.
For instance, managed care plans dictate how much
a social worker will be paid and how many times
they will be permitted to see a client. Accordingly,
these plans structure the kinds of interventions
that can be realistically implemented in the allotted
time. In fact, these policies structure the day-to-day
work of much of social work.
Values, Ideology, and Social
Welfare Policy
Social welfare policies are shaped by a set of social
and personal values that reflect the preferences of
those in decision-making capacities. According to
David Gil, “Choices in social welfare policy are heavily
influenced by the dominant beliefs, values, ideologies,
customs, and traditions of the cultural and
political elites recruited mainly from among the more
powerful and privileged strata.”13 How these values
are played out in the realm of social welfare is the domain
of the policy analyst. As chapter two illustrates,
social welfare policy is rarely based on a rational set
of assumptions backed up by valid research.
One view of a worthwhile social policy is that
it should leave no one worse off and at least one
person better off, at least as that person judges his
or her needs. In the real world of policy, that rarely
occurs. More often than not, policy is a zero-sum
game, in which some people are advantaged at the
expense of others. Or, at least they perceive themselves
as being treated unfairly. For example, the
upper 1 percent of Americans bring home nearly a
quarter of the U.S. income every year and control
40 percent of the nation’s wealth.14 Despite their
wealth and advantage, many see increased taxes and
regulation as an unfair infringement on their wealth,
and an attack on the most productive members of
society, who also happen to be the job creators.15
Recent U.S. social welfare policy has been
largely shaped by values around self-sufficiency,
work, and the omniscience of the marketplace. As
policymakers expected disadvantaged people to
be more independent, support for government social
programs was cut to presumably discourage
dependency. Although these cuts saved money in
the short run, most of them fell squarely on the
shoulders of children. Eventually, these cuts in
social programs may lead to greater expenditures,
as the generation of children who have gone withM01_KARG8973_7E_SE_C01.indd
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chapter 1 Social Policy and the American Welfare State 7
foundation of the modern welfare state, and
virtually all welfare societies are built along his
principles. Sometimes called demand or consumerside
economics, this model emerged from Keynes’s
1936 book, The General Theory of Employment,
Interest and Money.
An Englishman, Keynes took the classical
model of economic analysis (self-regulating markets,
perfect competition, the laws of supply and
demand, etc.) and added the insight that macroeconomic
stabilization by government is necessary
to keep the economic clock ticking smoothly.18 He
rejected the idea that a perfectly competitive economy
tended automatically toward full employment
and that the government should not interfere in the
process. Keynes argued that instead of being selfcorrecting
and readily able to pull themselves out of
recessions, modern economies were recession prone
and had difficulty providing full employment.
According to Keynes, periodic and volatile economic
situations that cause high unemployment are
primarily caused by the instability in investment
welfare policy plays an important role in stabilizing
society by modifying the play of market forces and
softening the social and economic inequalities generated
by the marketplace.17 To that end, two sets
of activities are necessary: state provision of social
services (benefits of cash, in-kind benefits, and personal
social services) and state regulation of private
activities to alter (and sometimes improve) the lives
of citizens. Social welfare bolsters social stability by
helping to mitigate the problems associated with
economic dislocation, thereby allowing society to
remain in a state of more or less controlled balance.
As noted earlier, the U.S. welfare state is
undergirded by political economy. Ideally, the
political economy of the welfare state should be
an integrated fabric of politics and economics; but
in reality, some schools of thought contain more
political than economic content, and vice versa.
For example, most economic theories contain sufficient
political implications to qualify them as
both economic and political. Conversely, most political
schools of thought contain significant economic
content. It is therefore difficult to separate
political from economic schools of thought. For
the purposes of this chapter, we will organize the
political economy of U.S. welfare into two separate
categories: (1) predominantly economic schools of
thought and (2) predominantly political schools of
thought. Nevertheless, the reader will find a significant
overlap among and between these categories.
The U.S. Economic Continuum
In large measure, economics forms the backbone
of the political system. For example, the modern
welfare state would not exist without the contribution
of economist John Maynard Keynes. Conversely,
the conservative movement would be much
weaker without the contribution of classical or
free market economists such as Adam Smith and
Milton Friedman. Virtually every political movement
is somehow grounded in economic thought.
The three major schools that have traditionally dominated
American thought are Keynesian economics;
classical or free market economics (and its variants);
and to a lesser degree, democratic socialism.
Keynesian Economics
Keynesian economics drives liberalism and most
welfare state ideologies. John Maynard Keynes’
economic theories formed the substructure and
John Maynard Keynes is best known as the economic
architect of the modern welfare state.
Source: CORBIS – NY
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8 part 1 American Social Welfare Policy
relatively simple, Keynes’s theories represent one
of the great insights of twentieth-century economic
thought.20 These ideas also formed the economic
basis for the modern welfare state.
Conservative or Free Market Economics
Whereas liberalism is guided by Keynesian economics,
the conservative view of social welfare is
guided by free market economics. It is predicated
on a belief in the existence of many small buyers
and sellers who exchange homogeneous products
with perfect information in a setting in which each
can freely enter and exit the marketplace at will.21
As an ideal type, none of these assumptions hold
in the real world of economics. For instance, the
free market model does not address the dominance
of distribution networks by a single retailer like
Walmart. There is nothing in the free market model
that addresses the lack of equitable distribution of
knowledge, experience, opportunity, and access to
resources enjoyed by buyers and sellers. The free
market model ignores theft, fraud, and deception in
cases like Enron, and it ignores the competitive advantages
that accrue through lobbying and special
interest negotiations like Halliburton’s no competition
bids for Iraq reconstruction projects. It also
ignores the power of large retailers to control the
market by instituting late shopping hours or even
24/7 businesses that make it impossible for small
family-owned businesses to compete. In short, an
unregulated market economy becomes monopolistic
as more of the market is taken over by fewer
enterprises.
The ascendance of the conservative economic
(and social) argument accelerated after 1973,
when the rise in living standards began to slow
for most Americans. Conservatives blamed this
economic slowdown on governmental policies—
specifically, deficit spending, high taxes, and excessive
regulations.22 In a clever sleight of hand, government
went from having the responsibility to
address economic problems (à la Keynes) to being
the cause of them.
Milton Friedman, considered by some to be
the father of modern conservative economics, was
one of Keynes’s more ardent critics. In opposition
to Keynes, Friedman argued that using fiscal and
monetary policy to smooth out the business cycle is
harmful to the economy and worsens economic instability.23
He contended that the Depression did not
occur because people were hoarding money; rather,
expenditures. The government can stabilize and
correct recessionary or inflationary trends by increasing
or decreasing total spending on output.
Governments can accomplish this by increasing or
decreasing taxes (thereby increasing or decreasing
consumption) and by the transfer of public goods
or services. For Keynes, a “good” government is
an activist government in economic matters, especially
when the economy gets out of full employment
mode. Keynesians believe that social welfare
expenditures are investments in human capital that
eventually increase the national wealth (e.g., by
increasing productivity) and thereby boost everyone’s
net income.
Keynes’s doctrine emerged from his attempt
to understand the nature of recessions and
depressions. Specifically, he saw recessions and
depressions as emerging from businesses’ loss of
confidence in investments (e.g., focusing on risk
rather than gain), which in turn causes the hoarding
of cash. This loss of confidence eventually leads to
a shortage of money as everyone tries to hoard cash
simultaneously. Keynes’s answer to this problem
was that government should make it possible for
people to satisfy their economic needs without cutting
their spending, which prevents the spiral of
shrinking incomes and shrinking spending. Simply
put, in a depression the government should print
more money and get it into circulation.19
Keynes also understood that this monetary
policy alone would not suffice if a recession spiraled
out of control, as in the Great Depression of
the 1930s. He pointed to a liquidity trap whereby
people hoard cash because they expect deflation
(a decrease—extreme in a depression—in the price
of goods or services), insufficient consumer or
industry demand, or some catastrophe such as war.
In a depression, businesses and households fail to
increase spending regardless of how much cash they
have. To help an economy exit this trap, government
must do what the private sector will not—
namely, spend. This spending can take the form
of public works projects (financed by borrowing)
or direct governmental subsidization of demand
(welfare entitlements). To be fair, Keynes saw public
spending only as a last resort to be employed if
monetary expansion failed. Moreover, he sought
an economic balance: Print money and spend in a
recession; stop printing and stop spending once it
is over. Keynes understood that too much money in
circulation, especially in times of high production
and full employment, leads to inflation. Although
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chapter 1 Social Policy and the American Welfare State 9
Despite their popularity in the early years
of the Reagan administration, the term “supplyside
economics” fell out of favor when it became
evident that massive tax cuts for the wealthy and
corporations did not result in increased productivity.
Instead, the wealthy spent their tax savings on
luxury items, and corporations used tax savings to
purchase other companies in a merger mania that
took Wall Street by surprise. Some corporations
took advantage of temporary tax savings to transfer
their operations abroad, further reducing the
supply of high-paying industrial jobs in the United
States. For these and other reasons, the budget deficit
grew from about $50 billion a year in the Carter
term to $352 billion a year in 1992.30
Although the term “supply-side economics”
fell out of favor by the late 1980s, its basic tenets,
such as the belief that massive tax cuts for the
rich would increase productivity (and the necessity
of social welfare spending cuts), were adopted
enthusiastically by the G.W. Bush administration in
the form of the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA), and the
Jobs and Growth Tax Relief Reconciliation Act of
2003 (JGTRRA). Citizens for Tax Justice estimated
that more than $1 trillion has been lost to the U.S.
Treasury as a result of the Bush tax cuts (later continued
by the Obama administration).31 The result
of these policies mirrored the effects of the earlier
supply-side doctrine: huge federal and state budget
shortfalls, corporate hoarding, greater economic inequality,
and stagnant wages.32 The federal budget
deficit reached about $175 billion in 2007; by early
2012 that rose to $1 trillion.33
Conservative economists argue that large social
welfare programs—including unemployment benefits
and public service jobs—are detrimental to the
society in two ways. First, government social programs
erode the work ethic by supporting those not
in the labor force. Second, because they are funded
by taxes, public sector social welfare programs
divert money that could otherwise be invested in
the private sector. Conservative economists believe
that economic growth helps everyone because overall
prosperity creates more jobs, income, and goods,
and these eventually filter down to the poor. For
conservative economists, investment is the key to
prosperity and the engine that drives the economic
machine. Accordingly, many conservative economists
favor tax breaks for the wealthy based on the
premise that such breaks will result in more disposable
after-tax income freed up for investment. High
there was a fall in the quantity of money in circulation.
Friedman argues that Keynesian economic
policies must be replaced by simple monetary rules
(hence the term monetarism). In effect, he believes
that the role of government is to keep the money
supply growing steadily at a rate consistent with stable
prices and long-term economic growth.24
Friedman counseled against active efforts to stabilize
the economy. Instead of pumping money into
the economy, government should simply make sure
enough cash is in circulation. He called for a relatively
inactive government in economic affairs that
did not try to manage or intervene in the business
cycle. For Friedman, welfare spending existed only
for altruistic rather than economic reasons.25 To
the right of Milton Friedman is Robert Lucas, 1994
Nobel Prize winner and developer of the “theory of
rational expectations.” Lucas argued that Friedman’s
monetary policy was still too interventionist and
would invariably do more harm than good.26
Developing outside of conventional economics,
supply-side economics enjoyed considerable popularity
during the early 1980s. Led by Robert Barth,
editorial page head of the Wall Street Journal,
supply-siders were journalists, policymakers,
and maverick economists who argued that demand-side
policies and monetary policies were
ineffective.27 They maintained that the incentive
effects of reduced taxation would be so large that
tax cuts would dramatically increase economic activity
to the point where tax revenues would rise
rather than fall. (Former President George H. W.
Bush referred to this as voodoo economics in
1980.28) Specifically, supply-siders argued that tax
cuts would lead to a large increase in labor supply
and investment and therefore to a large expansion
in economic output. The budget deficit would not
be problematic because taxes, increased savings,
and higher economic output would offset the deficit.
In the early 1980s, supply-siders seized power
from the Keynesians and mainstream conservative
economists, many of whom believed in the same
things but wanted to move more slowly.29
Although some supporters preferred to think
of supply-side economics as pure economics, the
theory contained enough political implications to
qualify as a political as well as an economic theory.
Popularized by supporters such as Jack Kemp,
Arthur Laffer, and Ronald Reagan, supply-side
economics provided the rationale for the dramatic
cuts in social programs executed under the Reagan
administration.
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10 part 1 American Social Welfare Policy
gained adherents among conservative analysts as
faith ebbed in supply-side theories. Not widely
known outside academic circles until its major
proponent, James Buchanan, was awarded the
Nobel Prize for economics in 1986, the public
choice model states that public sector bureaucrats
are self-interested utility-maximizers, and that
strong incentives exist for interest groups to make
demands on government. The resulting concessions
from this arrangement flow directly to the interest
group and their costs are spread among all taxpayers.
Initial concessions lead to demands for further
concessions, which are likely to be forthcoming
so long as interest groups are vociferous in their
demands. Under such an incentive system, different
interests are also encouraged to band together
to make demands, because there is no reason for
one interest group to oppose the demands of others.
But while demands for goods and services increase,
revenues tend to decrease. This happens because
interest groups resist paying taxes directed specifically
toward them and because no interest group
has much incentive to support general taxes. The
result of this scenario is predictable: Strong demands
for government benefits accompanied by
declining revenues lead to government borrowing,
which in turn results in large budget deficits.36
Adherents of public choice theory view social welfare
as a series of endless concessions to disadvantaged
groups that will eventually bankrupt the
government. On the other hand, it would be logical
also to apply public choice theory to defense industry
interest groups who make similar demands on
government while not paying a fair share of taxes.
The Global Financial Crisis (GFC)
Alan Greenspan, the former 18-year chairman of
the Federal Reserve, admitted that he “made a mistake”
in trusting free markets to regulate themselves
without government oversight. Greenspan further
admitted that “I made a mistake in presuming that
the self-interests of organizations, specifically banks
and others, were . . . capable of protecting their own
shareholders and their equity in the firms.”37 This
was an amazing series of admissions from the man
known as the “oracle” in economic matters. More
importantly, he questioned the belief that unregulated
free markets inevitably yield superior economic gain.
The initial event triggering the 2008 GFC was
the collapse of the U.S. housing market and the
taxes are an impediment to economic progress
because they channel money into “public” investments
and away from “private” investments.
In the conservative paradigm, opportunity
is based on one’s relationship to the marketplace.
Thus, legitimate rewards can occur only through
marketplace participation. In contrast to liberals
who emphasize mutual self-interest, interdependence,
and social equity, conservative economists
argue that the highest form of social good is realized
by the maximization of self-interest. In the conservative
view (as epitomized by author Ayn Rand34),
the best society is one in which everyone actively—
and selfishly—pursues their own good. Through
a leap of faith, the maximization of self-interest is
somehow transformed into a mutual good. In that
sense, conservatives occupy the opposite end of the
philosophical spectrum from traditional liberals.
Conservative economists maintain not only that
high taxation and government regulation of business
serve as disincentives to investment, but that individual
claims on social insurance and public welfare
grants discourage work. Together these factors lead
to a decline in economic growth and an increase
in the expectations of beneficiaries of welfare programs.
For conservatives, the only way to correct
the irrationality of governmental social programs
is to eliminate them. Charles Murray has suggested
that the entire federal assistance and income support
structure for working-aged persons (Medicaid,
the former Aid to Families with Dependent Children
[AFDC], food stamps, etc.) be scrapped. This would
leave working-aged persons no recourse except to
actively engage in the job market or turn to family,
friends, or privately funded services.35
Many conservative economists argue that
economic insecurity is an important part of the
entrepreneurial spirit. Unless people are compelled
to work, they will choose leisure over work. Conversely,
providing economic security for large numbers
of people through welfare programs leads to
diminished ambition and fosters an unhealthy dependence
on the state. Conservatives further argue
that self-realization can occur only through marketplace
participation. Hence, social programs harm
rather than help the most vulnerable members of
society. This belief in the need for economic insecurity
formed the basis for the 1996 welfare reform
bill that included a maximum time limit on welfare
benefits (see Chapter 11).
Some conservative economists are influenced
by “public choice” theory. The public choice school
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chapter 1 Social Policy and the American Welfare State 11
While the Feds let Lehman Brothers collapse
(the largest bankruptcy in U.S. history), they provided
American International Group (AIG) with an
$85 billion line of credit. Not wanting to be left out
of the party, U.S. automakers gained $25 billion in
taxpayer subsidized loans.41 Much of the money to
pay for the bailouts came from foreign investors,
who purchased U.S. Treasury bills. However, like
all investors, they remain cautious about the early
2012 $15 trillion U.S. federal debt.42 The GFC and
the 2008 collapse of Wall Street temporarily chilled
the previous debate around privatizing Social Security
(see Chapter 10).
Democratic Socialism
Democratic socialism (as opposed to old Sovietstyle
socialism) is based on the belief that radical
economic change can occur within a democratic
context. This view is at odds with both Keynesianism
and conservative economics. Specifically,
Keynesians basically believe in the market economy
but want to make it more responsive to human
needs by smoothing out the rough edges. Conservatives
believe that the economy should be left alone
except for a few minor tweaks, such as regulating
the money flow. Other conservative economists argue
that the market should be left totally alone. On
balance, both Keynesians and economic conservatives
have a basic faith that capitalism can advance
the public good. In that sense, Keynesians and economic
conservatives have more in common with
each other than Keynesians have with socialists.
Proponents of socialism argue that the fundamental
nature of capitalism is anathema to advancing
the public good. They contend that a system
predicated on pursuing profit and individual selfinterest
can lead only to greater inequality. The
creation of a just society requires a fundamental
transformation of the economic system, and the
pursuit of profit and self-interest must be replaced
by the collective pursuit of the common good. Not
surprisingly, they refute Keynes because of his belief
that economic problems can be fixed by technicalities
instead of sweeping institutional change. Socialists
dislike conservatives for obvious reasons, such
as the primary importance they place on markets
and their belief in subordinating social interests to
market forces.
Left-wing theorists maintain that the failure of
capitalism has led to political movements that have
pressured institutions to respond with increased
realization that domestic and foreign banks, in
vestment houses and institutions were holding hundreds
of billions of dollars of subprime mortgages
(i.e., nonviable mortgages held by problematic
borrowers) that were little more than toxic debt
offering little hope of repayment.
It is overly simplistic to blame the GFC solely
on subprime loans. Multiple factors converged to
create the crisis, including the largely unregulated
derivatives market and the reliance on various
forms of dodgy financial instruments. Derivatives
are used by banks and corporations to hedge
risk or engage in speculation. They are financial
instruments whose value depends on an underlying
commodity, bond, equity or currency. Investors
purchase derivatives to bet on the future (or as a
hedge against the potential adverse impacts of an
investment), to mitigate a risk associated with an
underlying security, to protect against interest rate
or stock market changes and so forth.
Derivatives are used in a variety of financial
areas. For example, credit derivatives can involve a
contract between two parties that allows one of them
to transfer their credit risk to the other. The party
transferring the risk pays a fee to the party that assumes
it. These derivatives are risky investments because
they are basically bets made in large amounts,
often in the billions. Like all forms of gambling, derivatives
only work if the casino has the money to
meet their obligation to bettors. If the casino lacks
the cash to pay winners (i.e., it has a liquidity problem),
the entire system collapses. The 2008 GFC was
partly based on the failure of the derivatives market.
The initial response to the GFC occurred in
2008 when former President George W. Bush signed
the $168 billion stimulus package giving tax rebates
to more to 130 million households.38 Administration
officials hoped the tax package would kickstart
the economy and deflect it from recession.
They were wrong. Afterward, federal loans and bailouts
came at an almost dizzying pace. In 2008, the
Federal Reserve enticed JP Morgan with a $29 billion
credit line to take over the failing Bear Stearns
investment house.39 One financial institution after
another failed or was taken over. In 2008 Bank of
America bought Countrywide Mortgage (the largest
US mortgage lender with assets of $209 billion).
Fearing that Merrill Lynch was next, it quickly sold
out to Bank of America. After Washington Mutual
was seized by federal regulators, it was bought by JP
Morgan Chase, the third largest U.S. bank. Meanwhile,
Wells Fargo acquired Wachovia Bank.40
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12 part 1 American Social Welfare Policy
economy of the United States. Since governmental
policy is driven largely by an ideologically determined
view of the public good, it will vary depending
which political party is in power.
The major American ideologies, (neo)liberalism
and (neo)conservatism, hold vastly different
views of social welfare and the public good. Since
conservatives believe that the public good is best
served through marketplace participation, they
prefer private sector approaches over governmental
welfare programs. Conservatives are not antiwelfare
per se; they simply believe that government
should have a minimal role (through a “safety net”)
in ensuring the social welfare of citizens. Traditional
liberals, on the other hand, view government as the
primary institution capable of bringing a measure
of social justice to millions of Americans who
cannot fully participate because of obstacles such as
racism, poverty, and sexism. Traditional liberals
view government social welfare programs as a key
component in promoting the public good. One of
the major differences between these orientations
lies in their differing perceptions of how the public
good is enhanced or hurt by welfare state programs.
The understanding of “the public good” is
lodged in the political and ideological continuum
that makes up the U.S. political economy. An
appreciation of this requires an understanding
of the interaction of schools of political thought
and how they evolved. These ideological tenets
also shape the platforms of the major political
parties and can be divided into two categories:
(1) liberalism and left-of-center movements and
(2) traditional conservatives and the far right.
Liberalism and Left-of-Center
Movements
Liberalism Since Franklin Delano Roosevelt’s New
Deal, liberal advocates have argued for advancing
the public good by promoting an expanding
economy coupled with the growth of universal,
non-means–tested social welfare and health care
programs. Traditional liberals used Keynesianism
as the economic justification for expanding the
welfare state, and as such, the general direction of
policy from the 1930s to the early 1970s was for
the federal government to assume greater amounts
of responsibility for the public good.
American liberals established the welfare state
with the passage of the Social Security Act of 1935.
Harry Hopkins—a social worker, the head of the
social welfare services. They believe that real
social welfare must be structural and can only be
accomplished by redistributing resources. In a just
society that makes goods, resources, and opportunities
available to everyone, only the most basic
forms of social welfare (health care, rehabilitation,
counseling, etc.) would be necessary. In this radical
worldview, poverty is directly linked to structural
inequality: People need welfare because they are exploited
and denied access to resources. In an unjust
society, welfare functions as a substitute, albeit a
puny one, for social justice.43
Some socialists argue that social welfare is an
ingenious arrangement to have the public assume
the costs associated with the social and economic
dislocations inherent in capitalism. According to
these theorists, social welfare expenditures “socialize”
the costs of capitalist production by making
public the costs of private enterprise. Thus, social
welfare serves both the needs of people and the
needs of capitalism. For other socialists, social
welfare programs support an unjust economic system
that continues to generate problems requiring
yet more programs. These radicals argue that social
welfare programs function like junk food for
the impoverished: They provide just enough sustenance
to discourage revolution but not enough
to make a real difference. As such, social welfare
is viewed as a form of social control. Frances Fox
Piven and the late Richard Cloward summarize the
argument:
Relief arrangements are ancillary to economic
arrangements. Their chief function is to regulate
labor, and they do that in two general
ways. First, when mass unemployment leads to
outbreaks of turmoil, relief programs are ordinarily
initiated or expanded to absorb or control
enough of the unemployed to restore order;
then, as turbulence subsides, the relief system
contracts, expelling those who are needed to
populate the labor markets.44
For radicals, real social welfare can occur only
in a socialist economic system.
The U.S. Political Continuum
Differing views on political economy produce differing
conceptions of the public good. Competition
among ideas about the public good and the welfare
state has long been a knotty issue in the political
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chapter 1 Social Policy and the American Welfare State 13
lost between 1975 and 1992. At the same time that
Social Security reforms reduced the elderly poverty
rate by 50 percent, the plight of poor non-working
families worsened.
Neoliberalism By the late 1970s, the liberal belief
that the welfare state was the best mechanism to
advance the public good was in retreat. What remained
of traditional liberalism was replaced by
a neoliberalism that was more cautious of government,
less antagonistic toward big business,
and more skeptical about the value of universal
entitlements.
The defeat of Jimmy Carter and the election of
a Republican Senate in 1980 forced many liberal
Democrats to reevaluate their party’s traditional
position on domestic policy. This reexamination,
which Charles Peters christened “neoliberalism” to
differentiate it from old-style liberalism, attracted
only a small following in the early 1980s.48 By the
mid-1990s, however, most leading Democrats could
be classified as neoliberal. Randall Rothenberg
charted signs of the influence of neoliberalism on
the Democratic domestic policy platform as early
as 1982, when he observed that the party’s midterm
convention did not endorse a large-scale federal
jobs program, did not endorse a national health insurance
plan, and did not submit a plan for a guaranteed
annual income.49
In the late 1980s, a cadre of prominent
mainstream Democrats established the Democratic
Leadership Council (DLC). In part, their goal was
to wrest control of the Democratic Party from
traditional liberals and to create a new Democratic
Party that was more attuned to the beliefs of
traditional core voters. In 1989, the DLC released
The New Orleans Declaration: A Democratic
Agenda for the 1990s, which promised that
Democratic Party politics would shift toward a
middle ground combining a corporatist economic
analysis with Democratic compassion. Two of the
founders of the DLC were Al Gore and Bill Clinton,
who chaired the DLC just before announcing his
candidacy.50
Compared to traditional liberals, neoliberals
were more forgiving of the behavior of large
corporations and were opposed to economic
protectionism. They were also opposed to strong
financial regulation, which helps explain why the
repeal of the 1933 Glass-Steagall Act (the act curbed
speculation in commercial banking) was passed
under the neoliberal Clinton administration. Some
Federal Emergency Relief Administration, a confidant
of President Roosevelt, a co-architect of the
New Deal, and a consummate political operative—
developed the calculus for American liberalism:
“tax, tax; spend, spend; elect, elect.”45 This approach
was elegant in its simplicity: The government taxes
the wealthy, thereby securing the necessary revenues
to fund social programs for workers and the poor.
This approach dominated social policy for almost
50 years. In fact, it was so successful that by 1980
social welfare accounted for 57 percent of all federal
expenditures.46
By the mid-1960s, the welfare state had become
a central fixture in America, and politicians sought
to expand its benefits to more constituents. Focusing
on the expansion of middle-class programs
such as Federal Housing Administration (FHA)
home mortgages, federally insured student
loans, Medicare, and veterans’ pensions, liberal
policymakers secured the political loyalty of
the middle class. Even conservative politicians
respected voter support for the welfare state, and
not surprisingly, the largest growth in social welfare
spending occurred under Republican president,
Richard M. Nixon.
Despite such support, the promise of the U.S.
welfare state to provide social protection similar
to Western Europe never materialized. By the mid-
1970s, the hope of traditional liberals to build a
welfare state mirroring those of northern Europe
had been replaced by an incremental approach that
narrowly focused on consolidating and fine-tuning
the programs of the Social Security Act. One reason
for this failure was the ambivalence of many
Americans toward centralized government. “The
emphasis consistently has been on the local, the
pluralistic, the voluntary, and the business-like
over the national, the universal, the legally entitled,
and the governmental,” observed policy analyst
Marc Bendick.47
Liberalism lost ground for another reason. The
Social Security Act of 1935—the hallmark of American
liberalism—was primarily a self-financing
social insurance program that rewarded working
people. Public assistance programs that contained
less political capital and were therefore a better
measure of public compassion, were rigorously
means tested, sparse in their benefits, and operated
by the less than generous states. For example,
although Social Security benefits were indexed to
the cost of living in the mid-1970s, AFDC benefits
deteriorated so badly that about half its value was
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14 part 1 American Social Welfare Policy
explains what appears to underline his refusal to
enact strong banking regulations in the aftermath
of the global financial crisis.
The Self-Reliance School A perspective gaining influence
in economically distressed areas and in developing
countries is the self-reliance school.
53 This
school maintains that industrial economic models
are irrelevant to the economic needs of poor communities
and are often damaging to the spiritual
life of people.54 Adherents of self-reliance repudiate
the emphasis of Western economic philosophies on
economic growth and the belief that the quality of
life can be measured by material acquisitions. These
political economists stress a balanced economy
based on the real needs of people, production designed
for internal consumption rather than export,
productive technologies that are congruent with
the culture and background of the population, the
use of appropriate and manageable technologies,
and a small-scale and decentralized form of economic
organization.55 Simply put, proponents of
self-reliance postulate that more is less, and less is
more. The objective of self-reliance is the creation
commentators partly attribute the 2007 global
financial crisis to the repeal of Glass-Steagall.51
Grounded in realpolitik, neoliberals viewed
the New Deal approach as too expensive and
antiquated to address the mood of voters. Consequently,
they distanced themselves from the
large-scale governmental welfare programs associated
with Democrats since the New Deal. Like
their neoconservative counterparts, they called for
reliance on personal responsibility, work and
thrift as an alternative to governmental programs.
Accordingly, their welfare proposals emphasized
labor market participation (workfare), personal responsibility
(time-limited welfare benefits), family obligations
(child support enforcement), and frugality in
governmental spending.
Former Secretary of Labor Robert Reich advocated
a postliberal formulation that replaced social
welfare entitlements with investments in human
capital. Public spending was divided into “good”
and “bad” categories: “Bad” was unproductive
expenditures on welfare and price supports; “good”
was investments in human capital, such as education,
research, and job training.52
Neoliberalism altered the traditional liberal
concept of the public good. Instead of viewing the
interests of large corporations as antithetical to the
best interests of society, they argued for free trade,
less regulation, and a laissez-faire approach to
social problems. They also viewed labor unions
with caution. In effect, the new shapers of the public
good had systematically excluded key actors of
the old liberal coalition.
The neoliberal view of the public good reflects
a kind of postmodern perspective. For neoliberals,
the public good is elusive, and its form is fluid. Definitions
of the public good change as a social order
evolves and new power relationships emerge. Thus,
neoliberals view the public good in the context of a
postindustrial society composed of new opportunities
and new institutional forms.
Neoliberalism is more of a political strategy
and pragmatic mode of operation than a political
philosophy embodying a firm view of the public
good. This is both its strength and its weakness.
Specifically, the strength of neoliberalism lies in its
ability to compromise and therefore to accomplish
things. Its weakness is that when faced with an ideological
critique, neoliberals are incapable of formulating
a cogent ideological response. [Former?] President Obama fits squarely within the neoliberal
orientation around pragmatism, which partly
President Barack Obama looks up at a campaign stop in
Oakland, Calif., Monday, July 23, 2012.
Source: Paul Sakuma/AP Images
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chapter 1 Social Policy and the American Welfare State 15
The conservative movement is founded on the simple
tenet that people have the right to live life as they
please, as long as they don’t hurt anyone else in the
process.”56 Following that line of reason, Goldwater’s
outspoken support of gays in the military was directly
opposed to the tenets of cultural conservatives.
Regarding reproductive freedom, classical
conservatives might challenge cultural conservatives
on various measures that limit or ban abortions.
From the late 1970s onward, old-style conservatives
such as Nelson Rockefeller, Barry Goldwater,
and William Cohen—who were more concerned
with foreign policy than with domestic issues—
were replaced by a new breed of cultural conservatives.
These cultural conservatives were committed
to reversing 50 years of liberal influence in social
policy. How the cultural conservatives came to
shape social policy warrants elaboration, although
it is first important to examine neoconservatives,
the forerunners of cultural conservatism.
Neoconservatism Before the 1970s, conservatives
were content to merely snipe at welfare programs,
reserving their attention for areas more consistent
with their traditional concerns such as the economy,
defense spending, and foreign affairs. However, by
the mid-1970s, conservative intellectuals recognized
that their former stance toward social welfare was
myopic as welfare was too important to be lightly
dismissed. Consequently, neoconservatives sought
to arrest the growth in governmental welfare programs
while simultaneously transferring as much
welfare responsibility as possible from government
to the private sector.57 They faulted government
programs for a breakdown in the mutual obligation
between groups; the lack of attention to how
programs were operated and benefits awarded;
the dependency of recipients; and the growth of
the welfare industry and its special interest groups,
particularly professional associations.58 To counter
the liberal goals of full employment, national
health care, and a guaranteed annual income, neoconservatives
maintained that high unemployment
was good for the economy, that health care should
remain in the private marketplace, and that competitive
income structures were critical to productivity.
They argued that income inequality was socially
desirable because social policies that promote equality
encourage coercion, limit individual freedom,
and damage the economy.59 By the late 1970s, the
neoconservative position began to be usurped by the
emerging cultural conservatives.
of a no-poverty society in which economic life is
organized around issues of subsistence rather than
trade and economic expansion. Accepting a world
of finite resources and inherent limitations to economic
growth, proponents argue that the true question
of social and economic development is not
what people think they want or need but what
they require for survival. The self-reliance school
accepts the need for social welfare programs that
ameliorate the dislocations caused by industrialization,
but it prefers low-technology and local solutions
to social problems. This contrasts with the
conventional wisdom of the welfare state, which
is predicated on a prescribed set of programs on a
national scale, administered by large bureaucracies
and sophisticated management systems.
Classical Conservatives and the
Far Right
Classic Conservatism Former conservative political
leaders such as Nelson Rockefeller, Richard
Nixon, and Barry Goldwater represented traditional
conservatism. Few traditional conservatives
now occupy important leadership positions in the
Republican Party, as most have been replaced by
cultural conservatives.
On one level, all conservatives agree on important
values relating to social policy. They are antiunion,
oppose aggressive governmental regulations,
demand lower taxes and less social spending, want
local control of public education, oppose extending
civil rights legislation, and believe strongly in states’
rights. Beneath this agreement, fundamental differences
exist among various conservative factions.
Traditional conservatives part ways with cultural
conservatives on a range of social issues. First,
as strict constitutionalists, traditional conservatives
believe strongly in the separation of church and state.
They see prayer and religion as personal choices in
which government has no constitutional right to
intervene. Second, while classical and cultural conservatives
want a weaker federal government, cultural
conservatives demand that government use its
power to set a religious-based agenda in areas such
as abortion, contraception, and gay marriage.
Third, classical conservatives are more socially
liberal than their cultural counterparts. For example,
the late Barry Goldwater, a conservative icon and
former U.S. senator, stated that, “I have been, and
am still, a traditional conservative, focusing on three
general freedoms—economic, social, and political. . . .
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16 part 1 American Social Welfare Policy
ment programs such as Social Security and Medicare
continued to soar. In the end, conservatives
underestimated three key factors: (1) the resiliency
of the welfare state, (2) the continued support
(however ambivalent) among the middle class,
and (3) the difficulty of translating rhetoric into
viable reform proposals. Nevertheless, conservatives
had learned from past mistakes. Instead of
toying with incremental policies, they proposed
bold new social initiatives that were incorporated
into the Contract with America (designed
to alter most of the safety net programs within
a two-year period), a document signed by more
than 300 House Republicans in 1994.61 Their
crowning victory occurred with the passage of the
Personal Responsibility and Work Opportunity
Reconciliation Act (PRWORA) in 1996.
Social and cultural conservativism flourished in
the 2010 Congressional midterm elections and in the
2012 presidential race. By 2011, this conservative
coalition may have pushed some Republican presidential
candidates, such as Mitt Romney, into taking
extreme positions on gay rights, abortion, health
care and even long resolved issues like contraception.
Libertarianism Libertarians reflect another perspective.
Specifically, this school of thought believes
in little or no government regulation. Libertarians
basically want the government to stay out of people’s
pocketbooks and their bedrooms.
We, the members of the Libertarian Party,
challenge the cult of the omnipotent state and
defend the rights of the individual. We hold
that all individuals . . . have the right to live in
whatever manner they choose, so long as they
do not forcibly interfere with the equal right of
others to live in whatever manner they choose.
We . . . hold that governments . . . must not violate
the rights of any individual: namely, (1) the
right to life—accordingly we support the prohibition
of the initiation of physical force against
others; (2) the right to liberty of speech and
action—accordingly we oppose all attempts . . .
[at] . . . government censorship in any form;
and (3) . . . we oppose all government interference
with private property. . . .62
Libertarians argue that governmental growth
occurs at the expense of individual freedom. They
also believe that the proper role for government is to
provide a police force and a military that possesses
only defensive weapons. Libertarians are highly
Cultural and Social Conservatism The
neoconservative assault on liberal social policy
was soon taken over by a coalition of cultural
and social conservatives, who raged against
governmental intrusion in the marketplace while
simultaneously attempting to use the authority of
government to advance their objectives in the areas
of sexual abstinence, school prayer, abortion, birth
control, evolution (i.e., creationism), gun rights,
and antigay rights proposals. These conservatives
cleverly promoted a dual attitude toward the role of
government. Mimicking classical conservatives, they
demanded a laissez-faire approach to economics
but steadfastly refused to apply that orientation
to social affairs. Instead, these conservatives
argued for social conformity and a level of
governmental intrusion into private affairs that
most classical conservatives would find appalling.
In contrast to the classical conservative position
on the separation of church and state, social
conservatives opportunistically embraced the rising
tide of fundamentalist religion, even to the point
of rewriting history by arguing that the Founding
Fathers were opposed to a secular state and were
guided by Christian principles.60
By the late 1980s, this coalition of economic conservatives,
right-wing Christians, and opportunistic
politicians had virtually decimated what remained of
Republican liberalism, whose adherents had become
an endangered species like liberal Democrats.
For liberals, the state represents the best vehicle
for promoting the public good. In contrast, cultural
conservatives view the state as the cause of rather
than the solution to social problems. With the exception
of protecting people (police and defense) and
property, cultural conservatives argue that the very
existence of the state is antithetical to the public good,
because government interferes with the maximization
of individual self-interest. Their posture toward
government is adversarial, except when the state is
used to further their social agenda. In tandem with
this agenda, conservative presidents, such as Reagan
and the two Bushes, prohibited the future growth of
the welfare state by using tax policy and federal budget
deficits to thwart increased public spending. For
example, few responsible politicians would argue for
increased social welfare spending given the 2012 federal
debt of more than $15 trillion.
After hammering away at social programs,
conservatives had accomplished relatively little in
the area of social insurance and health programs.
For instance, costs for social insurance entitleM01_KARG8973_7E_SE_C01.indd
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chapter 1 Social Policy and the American Welfare State 17
The Welfare Philosophers and the
Neoconservative Think Tanks
Many early welfare thinkers envisioned a U.S. welfare
state based on a European model.63 This vision
was shared by virtually every social welfare scholar
writing in the late 1960s and early 1970s.64 In turn,
most social workers supported a liberal welfare
philosophy grounded in a system of national social
programs that would be deployed as more citizens
demanded greater services and benefits. This framework
was informed by European welfare states,
especially the Scandinavian variant that spread
health care, housing, income benefits, and employment
opportunities equitably across the population.65
It also led Richard Titmuss to hope that
the welfare state, as an instrument of government,
would eventually lead to a “welfare world.”66
Despite the widespread acceptance of this liberal
vision, an alternative vision arose that questioned
the fundamental nature of welfare and social
services. Throughout the 1970s and 1980s, conservatives
(especially right-wing think tanks, or conservative
policy institutes) busily made proposals
for welfare reform. In fact, no conservative policy
institute could prove its mettle until it produced a
plan to clean up “the welfare mess.” The Hoover
Institution at Stanford University helped shape the
early conservative position on welfare. “There is
no inherent reason that Americans should look to
government for those goods and services that can
be individually acquired,” argued Hoover’s Alvin
Rabushka.67 Martin Anderson, a Hoover senior
fellow and domestic policy adviser to the Reagan
administration, elaborated the conservative position
on welfare in terms of the need to (1) reaffirm
the need-only philosophical approach to welfare
and state it as explicit national policy; (2) increase
efforts to eliminate fraud; (3) establish and enforce
a fair, clear work requirement; (4) remove inappropriate
beneficiaries from the welfare rolls; (5) enforce
support of dependents by those who have the
responsibility and are shirking it; (6) improve the
efficiency and effectiveness of welfare administration;
and (7) shift more responsibility from the
federal government to state and local governments
and private institutions.68 These recommendations
formed the backbone of the 1996 PRWORA.
In turn, the Heritage Foundation featured
Out of the Poverty Trap: A Conservative Strategy
for Welfare Reform by Stuart Butler and Anna
Kondratas.69 Following along the same lines, the
Former Republican presidential candidate Rep. Ron
Paul (R-TX) 2012.
In this Feb. 11, 2012 file photo, Republican presidential
candidate Rep. Ron Paul, R-Texas, speaks to his supporters
following his loss in the Maine caucus to Mitt Romney.
Source: Robert F. Bukaty/AP Images
critical of taxation because it fuels governmental
growth. Apart from advocating minimal taxation
earmarked for defense and police activities, they
oppose the income tax. Because libertarians
emphasize individual freedom and personal
responsibility, they advocate the decriminalization
of narcotics and believe that government should
intercede in social affairs only when an individual’s
behavior threatens the safety of another.
In 2009, social and cultural conservatives,
populists and libertarians of various ilk banded
together to form what is referred to as the Tea Party.
This American political movement advocated a rigid
interpretation of the U.S. Constitution, especially on
issues like gun control. The movement also focused
on reducing government spending, eliminating
the national debt, cutting social programs, and
dramatically reducing taxes. Although not initially
a religiously-inspired movement, it soon allied
itself with social and religious conservatives such
as former Alaska governor Sarah Palin and U.S.
Congressperson Michele Bachman (R-MN). In 2010,
Bachmann formed the Tea Party Congressional
Caucus, which contained 66 members in 2012.
Former presidential candidate and libertarian
Ron Paul is often thought of as the “intellectual
godfather” of the Tea Party movement. For many
Americans, 2012 presidential contender Ron Paul
embodied libertarianism, which is consonant with
how he presents himself. True libertarians, however,
have a problem with Paul who is against abortion
rights, gay marriage, and open borders.
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18 part 1 American Social Welfare Policy
from defined benefit plans (i.e., retirees are guaranteed
a set retirement income) to defined contribution
plans whereby retirement income depends
upon the savvy of the employees’ investment managers.
Whether these changes will help or hurt the
individual depends on many factors, but it is clear
that it is a shift in risk to the individual worker.
The absence of universal health care has
underscored the importance of employer-provided
health insurance; however, the increasing instability
of employment often means that job transitions are
accompanied by the failure to acquire health coverage.
Conservatives have proposed Health Savings
Accounts as a means of activating market forces to
control health costs, but they reflect another risk shift
from the corporation to the individual worker. The
former Bush administration suggested the elimination
of employer-provided health insurance in favor
of tax deductions for health insurance premiums, yet
another risk shift from corporations to the individual
or family.76An important implication of Hacker’s argument
is that good social welfare policy analysis can
no longer be restricted to a focus on income; it must
also attend to the shifting dynamics of risk. As such,
progressive social welfare policies must work to mitigate
the degree of risk the individual family must bear.
Conclusion
John Judis and Michael Lind argue that, “Ultimately
American economic policy must meet a single test:
Does it tend to raise or depress the incomes of most
Americans? A policy that impoverishes the ordinary
American is a failure, no matter of its alleged
benefits for U.S. corporations or for humanity as a
whole.”77 We would add: “What are the effects of an
economic policy on the social health of the nation?”
Researchers at Fordham University’s Institute for
Innovation in Social Policy have argued that the
nation’s quality of life has become unhinged from its
economic growth. “We really have to begin to reassess
this notion that the gross domestic product—the
overall growth of the society—necessarily is going
to produce improvements in the quality of life.”78
Constructing an Index for Social Health that encompassed
governmental data from 1970 to 1993,
researchers found that in six categories—children
in poverty, child abuse, health insurance coverage,
average weekly earnings adjusted for inflation, outof-pocket
health costs for senior citizens, and the gap
between rich and poor—“social health” hit its lowest
Free Congress Research and Education Foundation
proposed reforming welfare through “cultural
conservatism”—that is, by reinforcing “traditional
values such as delayed gratification, work and saving,
commitment to family and to the next generation,
education and training, self-improvement, and
rejection of crime, drugs, and casual sex.”70
A handful of other works also served as beachheads
for the conservative assault on the liberal
welfare state. George Gilder’s Wealth and Poverty
argued that beneficent welfare programs represented
a “moral hazard” that insulated people against
risks essential to capitalism and thus contributed
to dependency.71 Martin Anderson concluded that
income calculations should include the cash equivalent
of in-kind benefits, such as food stamps, Medicaid,
and housing vouchers, thus effectively lowering
the poverty rate by 40 percent.72 Taken together,
these ideas and recommendations provided a potent
critique of welfare programs.
Perhaps the most enduring change engineered
by the conservative movement is what Jacob Hacker
calls the “Great Risk Shift.”73 Private ownership of
property and the acceptance of personal responsibility
have long been core American values, which
partly explains why opposition to former President
Bush’s “ownership society” had not materialized. In
The Great Risk Shift, Hacker examines Bush’s ownership
society and the Republican Party’s emphasis
on personal responsibility as the code for shifting
economic risk away from government and corporations
and onto the back of the American family.
Hacker argues that private and public support
mechanisms have fallen behind the pace of change in
contemporary society. Almost half of marriages end
in divorce. Over a third of employed Americans are
frequently worried about losing their jobs. Structural
changes in the nature of employment, primarily seen in
a shift away from manufacturing to the lower-paying
service sector, have left many without the skills
needed for new jobs or the resources to retrain. The
likelihood of family income dropping 50 percent has
almost tripled since the 1970s; personal bankruptcies
and home foreclosures have increased by a factor
of five; and over any two-year period more than
80 million Americans go without health insurance
coverage.74 Hacker maintains that during a 30 year
period in which middle-class incomes have remained
stagnant, the need for economic security has been
neglected by public and private institutions.75
The risk shift is occurring in almost all sectors.
Corporate retirement programs are transitioning
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chapter 1 Social Policy and the American Welfare State 19
were religious truths. Discussions typically revolve
around how to best grow the economy, not whether
the economy should grow. Meanwhile, too little of
the economic discussion involves environmental sustainability
or quality of life issues. John de Graaf has
addressed these issues in Affluenza (the film and the
book) as have other authors in various forms. (See
Spotlight Box 1.1)
point in 1993. As current poverty data suggest, these
indicators have worsened since 1993.
A corollary question is, “What’s the economy
for, anyway?” In other words, do we exist to serve
the economy or should the economy serve us?
Economists often talk about the gross national
product (GNP) or gross domestic product (GDP),
productivity, and overall economic growth as if they
Spotlight 1.1
by John de Graaf
In the global economy, it seems everyone is dissatisfied
and looking for different models. One by one,
Latin American countries are moving from Right
to Left. On the other hand, in Europe, the parties
of social democracy have been losing ground to
the Center (Europe’s “right-wing” parties would be
Centrist or Left in the U.S.), one after another.
All of this frenetic searching begs the
fundamental question: What’s the Economy for,
Anyway? How much stock can we take in the
Dow Jones? Is the Gross Domestic Product the
measure (the grosser the better), and stuff the stuff,
of happiness? Is the good life the goods life?
If so, then there’s little doubt that the freermarket
regimes win big. U.S. per capita GDP is still
30% higher than the average in Western Europe,
just as it was a generation ago. We’ve got bigger
homes, bigger cars, and more high-definition televisions.
On the other hand if we measure success by
the happiness, health, fairness and sustainability of
economies, the picture looks very different.
I’ve been doing a little number-crunching
lately, comparing data from such sources as
the 2007 OECD [Organization for Economic
Cooperation and Development] Fact Book, the
World Health Organization and the UN [United
Nations] Human Development Index, trying to see
how countries are doing in real, empirical terms
when it comes to health, quality of life, justice and
sustainability. The results, I’m afraid, would come
as a shock to those who look to the United States
as the model of economic success.
Let me do a few of the numbers: compared,
for example, to the western European nations, the
U.S. ranks worst or next-to-worst when it comes to
child welfare, health care, poverty, income equality,
pollution, CO2 emissions, ecological footprint,
personal savings, income and pension security,
balance of payments, municipal waste, development
assistance, longevity, infant mortality, child abuse,
depression, anxiety, obesity, murder, incarceration,
motor vehicle fatalities, and leisure time. We do
slightly better in education. Our unemployment rate
looks pretty low, unless you count those 2.3 million
people we’ve got behind bars, an incarceration rate
7 to 10 times as high as Europe’s.
Since 1970 Europeans have traded a portion
of their productivity gains for free time instead
of stuff, a trade that pays off in many ways. New
studies show that long working hours, the norm
in the United States, contribute to poor health,
weakened family and community bonds and environmental
damage. Americans, far less healthy
than Europeans, spend twice as much for health
care per person. In fact, we spend nearly half the
world’s total health care budget, an amount that
will reach 20% of our GDP by 2010—with the
worst outcomes. Yet, all of that spending counts
as a plus when it comes to GDP. The leisure that
Europeans enjoy, the long meals and café conversations,
the long walks and bike rides, count
only as wasted time, adding not a single point to
GDP. La dolce vita, by that measure, is for losers.
But which countries come out on top in measures
of quality of life? It’s the northern European
nations, those that combine a strong social safety
WHAT’S THE ECONOMY FOR, ANYWAY?
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20 part 1 American Social Welfare Policy
net with shorter working hours, high but progressive
tax rates and strong environmental regulations.
The pattern is as clear as can be.
I have found no one who refutes these figures.
They simply explain them away by saying that the
U.S. can’t be like Europe. Why not?
One argument for why the United States can’t
even have such things as paid maternity leave—a
reality in every country on the globe except the
U.S., Swaziland, Lesotho, Liberia, and Papua New
Guinea—is that we’re so affected by globalization.
But with its massive domestic market, the U.S. is
just about the least affected by globalization of all
industrial countries.
American conservatives argue that Europeans
can’t continue to compete in the global economy.”
But according to the World Economic Forum,
over the past few years, four of the six most globally
competitive countries have been in Europe.
Even American businesses invest five times as
much each year in Germany as they do in China
and more in Belgium than in India. And they make
money doing it.
When all else fails, there’s the final appeal: the
U.S. may not be very healthy, fair or sustainable,
but it’s “the land of opportunity,” where anyone
can make it big if they’re willing to work hard
enough. Yet a recent study finds that Americans
actually have only about one-half to one-third as
much chance as Europeans of escaping low-income
lives and rising to the top.
The steady drone from some European business
leaders about the American economic miracle
masks what should be obvious—they’d like to join
our CEOs in making 400 times as much as their
average workers, instead of the miserable 30 to 40
times as much they now make. Their voices speak
louder than those of the average European citizen,
who enjoys his or her six weeks of vacation, restful
meals, family leave, health care, sick pay, free
college education, and secure pension plan.
Since Ronald Reagan declared that “government
cannot be the solution because government
is the problem,” indices of American quality of
life, fairness, economic security, and environmental
sustainability have all fallen sharply in comparison
with those in Europe. The conservative economic
revolution has produced a gush-up instead of a
“trickle-down.” For most of us, the “ownership
society,” emphasizing privatization, deregulation
and massive tax cuts for the wealthy, is really a
“you’re on your owner ship” society.
To make America better, our President tells us,
we must do even more of these things, making tax
cuts for the wealthy permanent, for example. But
the working definition of insanity is to keep doing
the same things hoping for a different result.
If we want to build societies that really work
for people, we need to ask, “What’s the Economy
for, anyway?” And then we need to separate the
real results from the myths, shed a little of our
American hubris and start looking at how other
countries are actually edging us out by providing
policies that succeed. That way lies a happier,
healthier, more just and sustainable world.
John De Graaf is a documentary filmmaker
and co-author (with David Wann, Thomas
Naylor, and Vicki Robin) of Affluenza: The AllConsuming
Epidemic (San Francisco, CA: BerrettKoehler,
2005).
As this chapter has demonstrated, social welfare
in the United States is characterized by a high degree
of diversity rather than a monolithic, highly centralized,
well-coordinated system of programs. Rather, a
great variety of organizations provide a wide range
of benefits and services to different client populations.
The vast array of social welfare organizations
contributes to what is commonly called “the welfare
mess.” Consequently, different programs serving different
groups through different procedures have created
an impenetrable tangle of institutional red tape
that is problematic for administrators, human service
professionals, and clients.
The complexity of U.S. social welfare policy can
be attributed to several influences, some of which are
peculiar to the American experience. For instance,
the U.S. Constitution outlines a federal system
whereby states vest certain functions in the national
government. Although the states have assumed primary
responsibility for social welfare through much
of U.S. history, this changed with Franklin Delano
Roosevelt’s New Deal which ushered in a raft of
federal programs. Over subsequent decades, federal
social welfare initiatives played a dominant role in
the nation’s welfare effort. Still, states continued to
manage important social welfare programs, such as
mental health, corrections, and social services. Over
time, the relationship between the federal government
and the states changed. From the New Deal of
the 1930s through the Great Society of the 1960s,
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chapter 1 Social Policy and the American Welfare State 21
Charities, and the Salvation Army. In many cases,
religious-based agencies provide services to groups
that would not otherwise receive them. Today many
faith-based agencies receive federal funds for various
services they provide to the public. It is likely that
this trend will grow.
The pluralism of national culture is of increasing
interest to social welfare policy analysts as the
influence of the federal government in social policy
diminishes. In light of reductions in many federal
social programs and calls for the private sector to
assume more responsibility for welfare, the prospect
of molding the diverse entities involved in American
social welfare into one unified whole under the auspices
of a central federal authority seems remote. This
vision of a unified social welfare system is implicit in
the proposals of advocates for nationalized programs
that ensure basic goods and services such as food,
housing, education, health, and income as a right of
citizenship. Although programs of this nature have
been integral to the welfare states of northern Europe
for decades, there is a serious question as to their
plausibility for the United States given the complexity
built into its social welfare system.83 Given these
developments, welfare professionals face a formidable
challenge: How can basic goods and services be
brought to vulnerable populations within a context
of such complexity and uncertainty?
Discussion Questions
1. According to the authors, American social welfare is
undergoing a transition. Which ideologies, schools
of political economy, and interest groups within social
welfare stand to gain most from this transition?
2. Ideology tends to parallel schools of political economy.
How would classical conservatives and liberals
address current social welfare issues such as health
care, long-term care for the aged, and substance
abuse? How would neoconservatives and neoliberals
diverge from traditional conservatives and liberals
on these issues?
3. Which schools of political, social, and economic
thought discussed in this chapter would come closest
to being classified as moderate? Why?
4. The chapter argues that in large measure social policy
dictates social work practice. Do you agree with
that premise? Explain your position. Can you think
of any instances (historic or otherwise) in which
social work practice has led to changes in social
welfare policy?
5. In your opinion, which schools of economic and political
thought are the most compatible with social
work practice? What are the incompatibilities in the
federal welfare programs expanded, forming the
American version of the “welfare state.” Beginning
in the 1980s, the Reagan administration sought to
return more of the responsibility for welfare to the
states, a process called devolution.79 This process
was furthered by the Clinton administration with the
signing of the PRWORA.
A second factor is attributed to the relatively
open character of U.S. society. Often referred to as
a melting pot, the national culture is a protean brew
of immigrant groups that become an established part
of national life.80 A staggering influx of Europeans
in the late nineteenth century gave way to waves of
Hispanics and Asians a century later.81 Historically,
social welfare programs have played a prominent
role in the acculturation of these groups. At the same
time, many ethnic groups brought with them their
own fraternal and community associations, which
not only provide welfare benefits to members of the
community but also serve to maintain its norms.
Other groups that have exerted important influences
on U.S. social welfare are African Americans,
the aged, women, and Native Americans. The very
pluralism of U.S. society—a diverse collection of
peoples, each with somewhat different needs—
contributes to the complexity of social welfare.
The economic system exacerbates the complexity
of social welfare. With important exceptions,
the U.S. economy is predominantly capitalist, with
most goods and services being owned, produced,
and distributed through the marketplace. In a capitalist
economy, people are expected to meet their
basic needs in the marketplace through labor force
participation. When people are unable to participate
fully in the labor market, like the aged or the handicapped,
social programs are deployed to support
these groups. These programs take various forms.
Many are governmental programs. Private sector
programs often complement those of the public
sector. Within the private sector, two organizational
forms are common—nonprofit organizations and
for-profit corporations. Often these private sector
organizations coexist, proximate to one another.82
For instance, in many communities, family planning
services are provided by the public health departments;
Planned Parenthoods (a private nonprofit);
and by for-profit health maintenance organizations.
Finally, various religious or faith-based organizations
strongly influence American social welfare.
This is seen most clearly in the range of faith-based
agencies that offer social services, such as Jewish
Family Services, Lutheran Social Services, Catholic
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22 part 1 American Social Welfare Policy
5. Public Policy Polling, Other Notes from Alabama and
Mississippi, March 12, 2012. Retrieved September 2012
from, http://www.publicpolicypolling.com/main/2012/03/
other-notes-from-alabama-and-mississippi.html
6. Kenneth P. Vogel, “The Billion-Dollar Bust?,” Politico,
November 7, 2012. Retrieved November 8, 2012 from,
http://www.politico.com/news/stories/1112/83534.html
7. Deborah Tedford, “Supreme Court Rips Up Campaign
Finance Laws,” National Public Radio, January 21, 2010.
Retrieved November 8, 2012 from, http://www.npr.org/
templates/story/story.php?storyId=122805666
8. HuffPost Politics Election Results, The Huffington Post,
November 8, 2012. Retrieved November 2012 from,
http://elections.huffingtonpost.com/2012/results
9. Richard Titmuss, Essays on the Welfare State
(Boston: Beacon Press, 1963), p. 16.
10. Contained in personal correspondence between David
Stoesz and William Epstein, April 2000.
11. See Alfred Kahn, Social Policy and Social Services (New
York: Random House, 1979).
12. Frances Fox Piven and Richard Cloward, Regulating the
Poor (New York: Vintage, 1971).
13. David Gil, Unraveling Social Policy (Boston: Shenkman,
1981), p. 32.
14. Joseph Stiglitz, “Of the 1%, by the 1%, for the 1%,”
Vanity Fair, May 2011. Retrieved February 2012 from,
http://www.vanityfair.com/society/features/2011/05/
top-one-percent-2011
15. Max Abelson, “Bankers Join Billionaires to Debunk
‘Imbecile’ Attack on Top 1%,” Bloomberg News,
December 20, 2011. Retrieved February 2012 from, http://
www.bloomberg.com/news/2011-12-20/bankers-joinbillionaires-to-debunk-imbecile-attack-on-top-1-.html
16. International Monetary Fund, World Economic Outlook
Database, September 2011, New York, NY; OECD, Public
policies for families and children, June 14, 2011. Retrieved
February 2012 from, http://www.oecd.org/document/
4/0,3746,en_2649_34819_37836996_1_1_1_1,00.html
17. Claus Offe, Contradictions of the Welfare State
(Cambridge, MA: MIT Press, 1984).
18. John Maynard Keynes, The General Theory of
Employment, Interest and Money (London:
Macmillan, 1936).
19. Paul R. Krugman, Peddling Prosperity: Economic Sense
and Nonsense in the Age of Diminished Expectations
(New York: W.W. Norton, 1994).
20. Ibid.
21. In their book Economics for Social Workers: The
Application of Economic Theory to Social Policy and the
Human Services (New York: Columbia University Press,
2001), Michael Anthony Lewis and Karl Widerquist
identify four conditions that must hold for a free market
to exist.
22. Ibid.
23. Milton Friedman, Money Mischief: Episodes in Monetary
History (New York: Harcourt Brace, 1992).
various schools of thought with macro- and microlevel
social work and practice?
6. Chapter 1 describes the U.S. political continuum
ranging from Liberalism to Libertarianism. Access
the website of the National Association of Social
Workers (www.naswdc.org) and read through the
Advocacy and Legislative Issues links. Where would
you place the NASW along the U.S. political continuum?
Why?
7. The Heritage Foundation (www.heritage.org) and
The Urban Institute (www.urban.org) are think
tanks that deal with research on a variety of issues
related to social welfare policy. Scan the topics and
a few of the titles easily accessible from the home
page of each website. Does either adopt a specific
point of view that tends to dominate? If you were
looking for a progressive position on an issue, which
one would you access?
8. In their book Economics for Social Workers: The
Application of Economic Theory to Social Policy
and the Human Services (New York: Columbia
University Press, 2001), Michael Anthony Lewis
and Karl Widerquist identify four conditions that
must hold for a free market to exist: (a) the market
must contain many small buyers and sellers; (b)
the goods and services sold by each firm must be
largely homogeneous with all other firms; (c) all
buyers and sellers must have accurate information
upon which to make their decisions; and (d) buyers
and sellers can enter or exit the market at will. If
it is correct to assume that there is no free market
without meeting these conditions, would you
describe the U.S. economy as a free market? In
what ways do we violate this model? In what ways
do we support it?
Notes
1. E. J. Dionne Jr., “The Opening Obama Saw,” Washington
Post (November 3, 2008), p. A21.
2. Chris Gentilviso, Todd Akin, “On Abortion:
‘Legitimate Rape’ Victims Have ‘Ways To Try To Shut
That Whole Thing Down,’” The Huffington Post, August
19, 2012. Retrieved September 2012 from, http://www.
huffingtonpost.com/2012/08/19/todd-akin-abortionlegitimate-rape_n_1807381.html
3. Howard Karger, Stupid is as Stupid Does: How the US
Republicans Channelled Forrest Gump, unpublished
manuscript. School of Social Work and Human Services,
The University of Queensland, Brisbane, Australia, May
2012.
4. Howard Karger, Stupid is as Stupid Does: How the US
Republicans Channelled Forrest Gump, unpublished
manuscript. School of Social Work and Human Services,
The University of Queensland, Brisbane, Australia, May
2012.
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chapter 1 Social Policy and the American Welfare State 23
43. Jeffry Galper, “Introduction of Radical Theory and Practice
in Social Work Education: Social Policy.” Mimeographed
paper, Michigan State University School of Social
Work, ca. 1978.
44. Piven and Cloward, Regulating the Poor, pp. 3–4.
45. Harry Hopkins, Spending to Save: The Complete Story
of Relief (Seattle: University of Washington Press,
1936).
46. Neil Gilbert, Harry Specht, and Paul Terrell, Dimensions
of Social Welfare Policy (Englewood Cliffs, NJ: Prentice
Hall, 1993).
47. Marc Bendick, Privatizing the Delivery of Social Welfare
Service (Washington, DC: National Conference on Social
Welfare, 1985), p. 1.
48. Charles Peters, “A New Politics,” Public Welfare 41, no. 2
(Spring 1983), pp. 34, 36.
49. Randall Rothenberg, The Neoliberals (New York: Simon &
Schuster, 1984), pp. 244–245.
50. David Stoesz, Small Change (New York: Longman, 1995).
51. Robert Kuttner, The Alarming Parallels Between 1929 and
2007, The American Prospect, (October 2, 2007).
52. Robert Reich, The Next American Frontier (New York:
Times Books, 1983).
53. Bruce Stokes, Helping Ourselves: Local Solutions to
Global Problems (New York: W.W. Norton, 1981).
54. Sugata Dasgupta, “Towards a No-Poverty Society,”
Social Development Issues 12 (Winter 1983), pp. 85–93.
55. Some of these economic principles were addressed by
E. F. Schumacher in Small Is Beautiful (New York:
Harper & Row, 1973).
56. Barry M. Goldwater, The Conscience of a Conservative
(New York: Putnam, 1960), pp. 109–110.
57. See Peter Steinfels, The Neoconservatives (New York:
Simon & Schuster, 1979).
58. Interview with Stuart Butler, Director of Domestic Policy
at the Heritage Foundation, October 4, 1984.
59. Alan Walker, “The Strategy of Inequality: Poverty and
Income Distribution in Britain 1979–89,” in I. Taylor
(ed.), The Social Effects of Free Market Policies (Sussex,
England: Harvester-Wheatsheaf, 1990), pp. 43–66.
60. James C. Mckinley Jr, “Texas Conservatives Win Curriculum
Change,” The New York Times, March 13, 2010,
p. A10.
61. Kristen Geiss-Curran, Sha’ari Garfinkle, Fred Knocke,
Terri Lively, and Sue McCullough, “The Contract with
America and the Budget Battle,” unpublished manuscript,
University of Houston, Spring 1996.
62. The Libertarian Party, “Statement of Principles,” Washington,
DC, 1996.
63. Daniel Patrick Moynihan, Came the Revolution (New
York: Harcourt Brace Jovanovich, 1988), p. 291.
64. See Harold Wilensky and Charles Lebeaux, Industrial
Society and Social Welfare (New York: Free Press,
1965); and Mimi Abramovitz, “The Privatization of
the Welfare State,” Social Work 31 (July–August 1986),
pp. 257–264.
24. Milton Friedman, Capitalism and Freedom
(Chicago, IL: University of Chicago Press, 1962).
25. Ibid.
26. Robert E. Lucas, Studies in Business Cycle Theory
(Cambridge, MA: MIT Press, 1981).
27. Krugman, Peddling Prosperity.
28. Ibid.
29. Ibid.
30. Congressional Budget Office, The Economic and Budget
Outlook: Fiscal Years 1993–1997 (Washington, DC:
Congressional Budget Office, 1992), p. 28.
31. Citizens for Tax Justice, Cost of Tax Cuts for the Wealthiest
Americans, 2012. Retrieved February 2012 from,
http://costoftaxcuts.com
32. See Beth Shulman, The Betrayal of Work: How Low
Wage Jobs Fail 35 Million Americans (New York: The
New Press, 2003); Lawrence Mishel, Jared Bernstein, and
John Schmitt, The State of Working America 2000/2001
(Ithaca, NY: Cornell University Press, 2001); and Jared
Bernstein, “Economic Growth Not Reaching Middle- and
Lower Wage Earners,” January 28, 2004, retrieved 2004
from www.epinet.org/content.cfm/webfeatures_snapshots
33. Office of Management and Budget, “The Nation’s Fiscal
Outlook Fiscal Year 2008.” Retrieved 2008 from www.
whitehouse.gov/omb/budget/fy2008/outlook.html
34. See Ayn Rand, The Fountainhead (New York: New
American Library, 50th Anniversary Edition, 1996); Atlas
Shrugged (New York: Signet Book; 35th Anniversary
Edition, 1996).
35. Charles Murray, Losing Ground (New York: Basic Books,
1984), pp. 227–228.
36. Privatization: Toward More Effective Government
(Washington, DC: U.S. Government Printing Office,
1988), pp. 233–234.
37. Michael Grynbaum, “Greenspan Concedes Error on
Regulation,” The New York Times, October 23, 2008,
p. 1.
38. CNN News, “Taxpayers Would Get Checks under
Economic Stimulus Plan,” January 24, 2008. Retrieved
October 25, 2008 from, http://edition.cnn.com/2008/
POLITICS/01/24/economic.stimulus/
39. Edmund L. Andrews, “Fed Acts to Rescue Financial Markets,”
The New York Times, March 17, 2008, p. 4.
40. Mark Landler, “U.S. Is Said to Be Urging New Mergers
in Banking,” The New York Times, October 20, 2008,
p. 18.
41. Paul Wallis, “$25 Billion Fed Loan to Car Industry; It’s
Not a Bailout, Says Detroit,” Digital Business Journal,
September 29, 2008. Retrieved October 25, 2008 from,
http://www.digitaljournal.com/article/260441
42. Associated Press, “2008 U.S. Budget Deficit Bleeding
Red Ink First 4 Months Of Budget Year At Nearly $88B,
Double Amount Recorded For Same 2007 Period,” CBS
News, February 12, 2008. Retrieved October 24, 2008
from, http://www.cbsnews.com/stories/2008/02/12/
national/main3822385.shtml
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24 part 1 American Social Welfare Policy
75. Lawrence Mischel, Jared Bernstein, and Sylkvia
Allegretto, The State of Working America 2004/2005
(Ithaca, NY: IRL Press, 2005).
76. Julie Appleby, “Bush Unveils Health Plan Tied to Tax Deduction,”
USA Today, January 24, 2007. Retrieved March
17, 2007, from www.usatoday.com/money/industries/
health/2007-01-24-bush-health-usat_x.htm
77. John Judis and Michael Lind, “For a New Nationalism,”
The New Republic (March 27, 1995), p. 26.
78. Mitchell Landsberg, “Nation’s Social Health Declined in
‘93,” Houston Chronicle (October 16, 1995), p. 1C.
79. Domestic Policy Council, Up from Dependency (Washington,
DC: White House Domestic Policy Council, December 1986).
80. For a classic description of the assimilation phenomenon,
see Nathan Glazer and Daniel Patrick Moynihan, Beyond
the Melting Pot (Cambridge, MA: MIT Press, 1970).
81. Thomas Muller et al., The Fourth Wave (Washington,
DC: Urban Institute, 1985).
82. The three auspices of social welfare in the United States
have been termed the “mixed economy of welfare.” See
Sheila Kamerman, “The New Mixed Economy of Welfare,”
Social Work 28 (January–February 1983), pp. 43–50.
83. Marc Bendick, Privatizing the Delivery of Social Welfare
Service (Washington, DC: National Conference on Social
Welfare, 1985).
65. R. Erikson, E. Hansen, S. Ringen, and H. Uusitalo, The
Scandinavian Model (Armonk, NY: M.E. Sharpe, 1987).
66. Richard Titmuss, Commitment to Welfare (New York:
Pantheon, 1968), p. 127.
67. Alvin Rabushka, “Tax and Spending Limits,” in Peter
Duignan and Alvin Rabushka (eds.), The United States
in the 1980s (Stanford, CA: Hoover Institution, 1980),
pp. 104–106.
68. Martin Anderson, “Welfare Reform,” in Peter Duignan
and Alvin Rabushka (eds.), The United States in the
1980s, pp. 171–176.
69. Stuart Butler and Anna Kondratas, Out of the Poverty
Trap: A Conservative Strategy for Welfare Reform (New
York: Free Press, 1987).
70. William Lind and William Marshner, Cultural
Conservatism: Toward a New National Agenda
(Washington, DC: Free Congress Research and Education
Foundation, 1987), p. 83.
71. George Gilder, Wealth and Poverty (New York:
Basic Books, 1981), p. 118.
72. Anderson, “Welfare Reform,” p. 145.
73. Jacob. S. Hacker, The Great Risk Shift: The Assault
on American Jobs, Families, Health Care, and Retirement
(New York: Oxford University Press, 2006).
74. Ibid.
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