Among hundreds of Kemp speeches, articles, and interviews during the period, it was a sweeping address to the conservative Heritage Foundation on June 6, 1990, 44 that best illuminates his outlook. It had a grandiose title—“An Inquiry into the Nature and Causes of Poverty in America and How to Combat It,”— borrowed from Adam Smith’s “An Inquiry into the Nature and Causes of the Wealth of Nations.”
The speech came at the time when communism was in its death throes, and Kemp seized on that moment. He likened the sclerotic economies of the East Bloc to those in impoverished communities throughout America. “If we are to present the example of democratic capitalism and the rule of law to the rest of the world, we’ve got to make it work for the low-income people and distressed neighborhoods and communities right here in our own country,” he declared. “It is not only Eastern Europe looking to us for market oriented answers. It is also East Harlem, East St. Louis and East LA.” He said that helping those left behind was not only a moral imperative, but a winning political strategy. “Whether it’s called bleeding heart conservatism, capitalism with a social conscience or populist conservatism—it’s the right thing to do, the right time to do it, and we’re the right people to help lead it.”
He disputed the notion of “America as two cities, one rich and one poor, permanently divided into two classes.” That had been the crux of New York governor Mario Cuomo’s keynote speech to the 1984 Democratic National Convention. “With all due respect to Gov. Cuomo, he got it wrong,” Kemp said. “America is not divided immutably into two static classes. But it is separated or divided into two economies. One economy—our mainstream economy—is democratic capitalist, market-oriented, entrepreneurial and incentivized for working families whether in labor or management.” It produced the widespread prosperity and high standard of living of the Reagan years.
“But there is . . . a second economy that is similar in respects to the Eastern European or Third World ‘socialist’ economy,” Kemp said. “It is almost totally opposite to the way we are treated in our mainstream economy and it predominates in the pockets of poverty throughout urban and rural America. This economy [denies] entry to Black, Hispanic and other minority men and women into the mainstream, almost as effectively as hiring notices 50 years ago that read ‘No Blacks (or Hispanics or Irish or whatever) Need Apply.’
”If someone wanted to create poverty and make people dependent on government, he said, he would do what liberal policy had done. Among other things, reward welfare and unemployment at a higher level than working and tax the entrepreneur who succeeds in the legal capitalistic system much higher than in the illicit underground economy. Also, reward people who stay in public housing more than those who move to private housing and home ownership. Reward the family that breaks up rather than the family that stays together. Encourage debt, borrowing and spending rather than saving, investing and risk- taking. And, “most of all . . . weaken and in some cases destroy the link between effort and reward.”
Then Kemp turned to what he called the “good news.” Government policies “can change and . . . good policy can lead to good results. . . . The poor don’t want paternalism. They want opportunity. They don’t want the servitude of welfare. They want to get jobs and private property. They don’t want dependency. They want a new declaration of independence.”
He reiterated his agenda: to encourage investment, cut the capital gains tax rate to 15 percent (from 28 per cent), and eliminate it altogether in enterprise zones. The capital gains tax reduction, he said, wasn’t intended to help the rich or secure old wealth, but “to free up or unlock old capital and old wealth to help new business, new risk takers, job-creation and economic growth,” He advocated resident management and purchase of public housing units, a policy pioneered in Britain by Conservative prime minister Margaret Thatcher. And he proposed housing vouchers to allow poor people to choose their own housing, plus “a new version to tax reform to remove low income families from the tax rolls and dramatically increase the after-tax income of welfare mothers and unemployed fathers who go to work.”
In 1948, at the median income, he said, “a family of four paid virtually no income tax and only $30 a year in direct Social Security taxes. This year, the same family’s tax burden would be over $6,000. To be comparable to 1948, the personal exemption—the tax allowance for nurturing children—would have to be well over $6,000 today. Instead, it is only $2,000.” To achieve this, he advocated “dramatic expansion of the earned income tax credit, a $6,000 exemption for children under 16 and [President Bush’s] child care tax credit to roll back this tax burden on low income families and unemployed parents.”45
The elements of the speech, taken together, constituted the most comprehensive antipoverty program—and the most compelling critique of existing policy—ever offered by a conservative American politician.
Excerpted from Jack Kemp: The Bleeding-Heart Conservative Who Changed America by Morton Kondracke and Fred Barnes with permission of Sentinel, an imprint of Penguin Publishing Group, a division of Penguin Random House LLC. Copyright © Frederic Wood Barnes, Jr. and Morton M. Kondracke, 2015.