This year marked the 50th anniversary of President Lyndon B.

Johnson declaring
an unconditional war on poverty in America. Where do we find ourselves in
terms of that goal today?
In a five-decade stalemate.
First, the good news: life expectancy is longer, infant mortality much lower,
and education more accessible than in the 1960s. Living standards and conven-
iences have improved dramatically for everyone, including the poor, over the
past 50 years.
Now, the bad news: it wasnt the War on Poverty that brought any of
these improvements. They can be attributed to general economic growth, tech-
nological improvements, and falling relative prices for domestic goods. And
despite $1 trillion spent every year on federal antipoverty programs, millions
of Americans are still in poverty and living without much hope or opportunity.
It may be easier to be poor today than in 1964, but the poverty rate is the
Poverty Relief That Lasts
by AEI President Arthur Brooks
Issue No. 3, August 2014
Enterprise Report
Restoring Liberty, Opportunity, and Enterprise in America
same as when the war began. Perhaps even worse, however, is the increase in welfare
dependency and workforce alienation.
As my colleague Nick Eberstadt has pointed out, the percentage of Americans who
rely on government assistance for food or other sustenance has risen from 3.8 percent before
the War on Poverty to 35 percent today. Since 1964, the percentage of working-age men
who are completely out of the workforce has nearly tripled, from 6 percent to 17 percent,
and the percentage of children raised in a two-parent homea key indicator of future earn-
ing potentialhas dropped about 20 percentage points to 69 percent.
In other words, economic growth through free enterprise has made life more bearable
for people at the bottom, but opportunity has fallen and welfare dependency has risen.
We must do better. But how?
The answer is a safety net that relieves the indigent without creating dependence, while
bringing the secret to true opportunity and dignitycapitalismto the poor.
AEI scholars are identifying and propagating those ideas to start a true social move-
ment for change. We are drawing people into our cause regardless of party or ideological
persuasion and fighting for the public policiesand cultural institutionsthat lift up the most
vulnerable among us.
AEI has a long track record in this regard, including the work of scholars Robert Bork,
Jeane Kirkpatrick, Irving Kristol, Charles Murray, Michael Novak, Ben Wattenberg, and
James Q. Wilson. Today, their mantle is being taken up by AEI scholars like Robert Doar,
Kevin Hassett, Rick Hess, Andrew Kelly, Ramesh Ponnuru, and Michael Strainseveral of
whom were featured in the July 6 New York Times Magazine cover story, an AEI-heavy look
at policy reforms centered on the poor that are beginning to shake up Washington.
AEI scholars are identifying a way forward with free enterprise ideas that will lift up the
most vulnerable in our society and restore the middle class by bringing transformation, relief,
and opportunity to all Americans. Thank you for supporting AEI in this moral cause.
Arthur Brooks
President, AEI and
Beth and Ravenel Curry
Chair in Free Enterprise
A Conservative Vision for Social Justice, ARTHUR BROOKS
Capital and Poverty, MEGAN MCARDLE
From Policy to Practice: What Works in Helping the Poor, ROBERT DOAR
In the first of AEIs Vision Talks, Arthur Brooks, AEI Morgridge Fellow in Poverty Studies
Robert Doar, and journalist Megan McArdle address the failings of the War on Poverty
and offer concrete policy solutions for expanding opportunity to those left behind. Watch
the three talks at thepursuitofhappiness.com/the-big-picture.
AEIs education policy scholars have spurred a
growing movement for what the teams director,
Rick Hess, calls cage-busting teaching and school
leadership. While it is widely accepted that federal
laws, district policies, collective bargaining agree-
ments, and generally creaky bureaucracies hamper
public school teachers, principals, and superintend-
ents in their reform efforts, these leaders have a lot
more power to invigorate their classrooms and schools than they realizeif
they adopt a cage-busting mentality.
Hesss inspiring 2013 book Cage-Busting Leadership and its sequel,
The Cage-Busting Teacher, due out next year, draw lessons from the experiences
of the most dynamic school reformers in the country. Anecdotes include:
Washington, DC, Chancellor of Public Schools Kaya Henderson
was told by the teachers unions lawyers that she couldnt give her
school principals a much-needed $30,000 raise unless school business
managers got the same raise across the board. Undeterred, she found
a loophole in the contract that allowed her to grant the raise for talent
recruitment, and when the union said, You cant do that, she said,
Yes, I can.
New York City Deputy Chancellor of Education David Weiner
learned his first cage-busting lesson as a young elementary school princi-
pal. He needed to fire an abusive teacher, but Human Resources told him
he didnt have the authority to do it. So he bought a laptop and set up
his office in the teachers classroom, until after six weeks he had enough
evidence to force her resignation. Maybe I was young and nave, but Im
glad I did it, Weiner recalled.
Hess helps education leaders apply his research principles through a series of
targeted, high-level seminars that he hosts around the country with superintendents,
school boards, principals, and teachers. Over the past year alone, Hess has led
more than 20 seminars with leaders from some of the largest and most innovative
school districts in the country. The education community has taken notice of the
dynamic power of the cage-busting mentality, and today, Hesss ideas are being
incorporated by leaders across the country. As one school board leader wrote
recently, Never again will I take the words we cant do that because of the
contract without first asking specifically where it says it in the contract!
3
Cage-Busting Education
Senators Tim Scott (R-SC) and Lamar Alexander (R-TN)
unveiled proposals to free up billions of federal
education dollars to fund school choice scholarships
for children in all 50 states and DC.
Representative Todd Rokita (R-IN), chairman of the US
House Subcommittee on Early Childhood, Elementary,
and Secondary Education, introduced his CHOICE
Act, which would expand school choice for low-
income families in Washington, DC.
Rick Hess, Kaya Henderson, and 4.0 Schools CEO
Matt Candler discuss the future of education reform.
Recent Education Policy
Events at AEI
For more on AEIs Education Policy Studies
Program and future events, please visit
www.aei.org/policy/education.
AEI continued its series of dialogues
on freedom, happiness, and human
flourishing with world-renowned
leaders, such as His Holiness the
Dalai Lama and Chen Guangcheng
(below), with a June 24 event featuring
Sri Sri Ravi Shankar, a leading Hindu
spiritual figure. In conversation with
Arthur Brooks, Sri Sri, whose Art of
Living Foundation is active in 152
countries, discussed the importance of
compassion to capitalism, explaining
that humanism is a precursor for a
just society. Wealth is good, and
hard work keeps you out of trouble,
as Sri Sri put it. A compassionate
society can use these things to improve
the lives of all its members.
More than 300 attendees filled
AEIs conference center to hear the
discussion in person, another 2,000
watched the live video stream, and
AEIs YouTube video of the event has
been viewed more than 9,000 times
so far.
4
Marking the 25th Anniversary of the Tiananmen Square Massacre
Chinese Dissident Chen Guangcheng on the Way Forward for China
Speaking publicly in English for the
first time, Chinese activist Chen
Guangcheng reminded an AEI audience
that the quest for human rights and free-
dom in China is alive a quarter-century
after Tiananmen Square. Blind from
an early age, Chen taught himself the
law two decades ago to represent him-
self in a tax case. He received interna-
tional attention for successfully filing a
class-action lawsuit against Chinese
authorities on behalf of women victim-
ized by enforcement of Chinas one-
child policyand was soon arrested
and jailed. He fled to the United States
with his family following his release and
subsequent harassment.
The visit highlighted the connection
that both Chen and AEI stress between
freedom and free enterprise and human
happiness. While Chinas economic
growth may be impressive in fiscal
terms, when the state stamps out cultural
transformationthe first pillar of a flour-
ishing, happy life, as AEI President
Arthur Brooks explaineda peoples
potential is tragically limited. More than
100 people attended the speech at AEI
in early June, over 1,000 more live-
streamed the event or have watched it
since, and five international camera
crews covered the event.
Capitalism can flourish well with
compassion, and compassion
can only happen with people
who can afford to show compas-
sion and do something about it.
Sri Sri Ravi Shankar
Twenty-five years ago today, a great evil was done by those in power in
China. They killed hundreds of their own people to silence them. They have
tried to silence me. But I will not be silent. I want to speak to you today, in
English, so no one will forget that terrible day.
Chen Guangcheng
Sri Sri Ravi Shankar at AEI
Chinese activist Chen Guangcheng and
Arthur Brooks
5
On May 22, the 50th anniversary of President Lyndon Johnsons Great Society
speech that launched his liberal reform agenda and War on Poverty, AEI
hosted the launch event for a new reform-minded publication, Room to Grow:
Conservative Reforms for a Limited Government and Thriving Middle Class.
Edited by the Washington-based YG Network, this compilation of policy-specific
essays offers the framework for a new domestic policy agenda that will empower
individuals and increase human flourishing by promoting free markets in the place
of failed, outdated government programs.
The days program included Arthur Brooks moderating a discussion with
Representative Eric Cantor (R-VA) and Senators Tim Scott (R-SC) and Mike Lee
(R-UT); Senator Mitch McConnells (R-KY) keynote address; and a panel featuring
public intellectuals Ross Douthat, Yuval Levin, Ramesh Ponnuru, Reihan Salam,
and Peter Wehner. The event was a success by almost every measure, declared
the New York Times Magazine July 6 cover story on the Republican Partys idea
renaissance.
Room to Grow
AEI Scholars Among Reform Conservatives
Offering Empirical Policy Ideas for the Future
Senators Mike Lee (R-UT) and Tim Scott (R-SC), and
Representative Eric Cantor (R-VA)
Senate Minority Leader Mitch McConnell (RKY)
The Curmudgeons Guide to Getting Ahead
Dos and Donts of Right Behavior, Tough Thinking,
Clear Writing, and Living a Good Life
What started as Charles Murrays advice column for AEI interns and research assis-
tants was published this year as a book that can be useful to all college graduates
and young professionals in America. The Curmudgeons Guide to Getting Ahead
helps young people navigate their entry into the workplace, win the approval of
prickly employers, and begin their pursuit of a life well lived. A few of Murrays tips:
Always be aware that what passes for good grooming and fashion
among people in their 20s can still make you look like a slob to people
in their 50s.
If you do not start your career until you are 30, that still gives you
35 years to make it professionally. If you cannot make it in 35 years,
you were not going to make it in 40 or 45.
Marry someone with similar tastes and preferences. It is absolutely
crucial that you really, really like your spouse.
Excise the word like from your vocabulary.
W. H. Brady Scholar Charles Murray
Jon Buchleiter, University of North
CarolinaChapel Hill, Class of 16
Buchleiter spent the spring of 2014
taking courses in public policy in
Washington and interning at AEI,
and he was excited to stay for
the summer. He is editor-in-chief
of the Hill Political Review, UNCs
student-run, nonpartisan politics
and current events magazine, as
well as a member of UNCs AEI
Executive Council, Alexander
Hamilton Society chapter, and
Roosevelt Institute Foreign Policy
Center. He will be pursuing a career
in national security and intelligence.
6
Twenty-five top college students traveled
to Washington in June to participate in
the 2014 AEI Summer Institute. During
the six-week program, these future lead-
ers learned the principles and methods
of public policy analysis from AEI schol-
ars including Arthur Brooks, Charles
Murray, Michael Barone, and Jonah
Goldberg. During a special guest-lecture
series, students interacted with prominent
policymakers and thinkers William
Kristol, Newt Gingrich, journalist Megan
McArdle, former Merck Chairman
Raymond Gilmartin, Carlyle Group
Director Edward Mathias, and the teams
at Facebooks Washington, DC, office
and the German Embassy.
This years class was selected on
the basis of academic achievement,
leadership potential, and demonstrated
interest in public policy, and it included
six students who are AEI Executive
Council members in charge of AEI on
Campus programming at their schools.
I cant think of a
better way to
spend my summer.
Taking classes from
Arthur Brooks,
Charles Murray, Nick Eberstadt,
Fred Kagan, and others at AEI is
a once-in-a-lifetime opportunity.
During my spring internship I
discovered just how world-class the
scholarship is heremy friends are
so jealous that these scholars are
devoting a few weeks of their time
to teaching me and 24 others.
Its exciting to be surrounded by such high-caliber
students who are passionate about free enterprise
and motivated by the good it can do for others.
Luciana Milano, Harvard University, Class of 14
A native of Texas, Milano has a deep interest in US-Mexico relations. She has
served as a pro-bono Spanish translator for legal cases in her home town and
appeared on Fox Newss OReilly Factor. She plans to become a prosecutor
in her home state, working to address the drug trafficking-related challenges of
her Rio Grande Valley community.
(Left) Caleb Jackson, Institute for Responsible
Citizenship, Hampton University; Amber
Smoczyk, Summer Institute, NYU; and
Lexi Vankevich, Summer Institute, LSE.
(Center) Summer Institute students meet with
Bloomberg columnist Megan McArdle.
(Right) Students talk to Institute for Responsible
Citizenship President William Keyes.
7
Eugene Fama, winner of the 2013
Nobel Prize in Economics and member
of AEIs Council of Economic Advisers,
received AEIs Irving Kristol Award on
May 6 at the AEI Annual Dinner in
Washington, DC. This years dinner was
generously underwritten by former Fama
student and AEI trustee Clifford S.
Asness of AQR Capital Management,
and Fama was interviewed onstage
by Wall Street Journal Editorial Page
Editor Paul Gigot. More than 1,100
members of the AEI community attended
the dinner, and we are grateful to the
evenings sponsors, whose support
signals their belief in AEIs policy
research and efforts in the fight for
free enterprise.
AEIs 2014 Annual Dinner
Eugene Fama and Paul Gigot
AEI President Arthur Brooks and Board Chairman
Tully Friedman
AEI National Council member Anne Raymond
and Catherine Cox
AEI trustee Gordon Binder, former Senator and AEI
Visiting Scholar Phil Gramm, and AEI's Arthur F. Burns
Fellow in Financial Policy Studies Peter Wallison
AEI President Arthur Brooks addresses the
2014 Summer Institute.
Rachel Brand, a Chamber of Commerce chief
counsel and the former head of legal policy at
the Justice Department, talks to Summer Institute
students about the effects of regulation on business
competitiveness.
Summer Institute student Fatema Ghasletwala,
George Washington University, speaks up in class.
Students from the Institute for Responsible Citizenship
and the Summer Institute met with AEI trustee,
Harvard Business School professor, and former
Merck Chairman Raymond Gilmartin.
Weekly Standard Editor Bill Kristol leads a class
and discussion of American politics with Summer
Institute students.
Summer Institute students Pranay Udutha, University of
Georgia (center) and Wilson Shirley, Northwestern
University (right), with new friend Kirklan Ventrella,
Hillsdale College, enjoy AEIs reception for Washing-
ton, DC, policy interns.
The American Enterprise Institute is a community of scholars and supporters
committed to expanding liberty, increasing individual opportunity, and
strengthening free enterprise. AEIs work is made possible only by the financial
backing of those who share our values and support our aims.
To learn more about AEIs scholars and their work, visit
www.aei.org | www.american.com | www.aei-ideas.org
To find out how you can invest in our scholars work, visit
www.aei.org/support
1150 Seventeenth Street, NW
Washington DC 20036
202.862.5800 | www.aei.org
8

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www.youtube.com/AEIVideos
AEI recently launched an Alumni
Program which already counts 150
members. As AEIs scholars, staff,
research assistants, interns, and
Summer Institute students move on to
the next phases of their professional
lives, they remain an important part of
the AEI community. This new program
will help our alumni stay connected
with AEI and help the Institute reach
new, growing, and influential audi-
ences with its free enterprise message.
AEI alumni have become senior
advisers to Congresss top committees,
deputy secretaries and directors in
nearly every executive department
of government, senior fellows and
directors at influential policy organiza-
tions, and broadcast and print journal-
ists. Several, after building successful
careers beyond AEI, have returned to
the Institute as scholars and fellows.
Our new Alumni Program offers
networking opportunities and the
ability to remain engaged with AEI
through special programming, such
as bimonthly conference calls with
AEI scholars on current topics, private
AEI gatherings in cities around the
country, and an invitation to AEIs
Annual Dinner.
In turn, AEIs alumni help connect
our scholars and their work to policy
leaders and continue to help attract
the best and brightest talent to the
Institute. Most importantly, alumni take
the free enterprise principles learned
at AEI into the next stage of their
professional careers.
AEI development associate
Gwendolyn Gorse would be happy
to hear from you if you or someone
you know is interested in joining the
Alumni Program. Membership is free, and
there are various levels of involvement.
Please contact her at 202.862.5852 or
gwendolyn.gorse@aei.org.
Jonah Goldberg began his career
at AEI as a research assistant for
scholar Ben Wattenberg from 1992
to 1994. He went on to produce
documentaries for PBS before
joining National Review and help-
ing to found National Review
Online. Now a contributing editor
for National Review and a colum-
nist for the Los Angeles Times,
Goldberg returned to AEI as a
fellow in 2010. Goldberg is also
a member of the board of contribu-
tors of USA Today. He has received
the Lowell Thomas and Robert J.
Novak journalism awards and
written two New York Times best-
selling books, The Tyranny of
Clichs (Sentinel HC, 2012) and
Liberal Fascism (Doubleday, 2008).
AEI Launches New Alumni Program
Institutes Network Holds Potential for Wide-Ranging Impact