Yes, Wall Street Helps the Poor

Parents wait to see if their students will get spots at the Harlem Success Academy Charter school system. Chris Hondros / Getty Images

It was a scene to curdle liberal blood. A ballroom full of New York hedge-fund managers playing poker ... to raise money for charter schools.



Except that I wasn’t. I was hugely cheered up. America’s financial elite needs a compelling answer to Occupy Wall Street. This could be it: educate Harlem ... with our poker chips.

Life, after all, is a lot like poker. No matter how innately smart you may be, it’s very hard to win if you are dealt a bad hand.

Americans used to believe in social mobility regardless of the hand you’re dealt. Ten years ago, polls showed that about two thirds believed “people are rewarded for intelligence and skill,” the highest percentage across 27 countries surveyed. Fewer than a fifth thought that “coming from a wealthy family is essential [or] very important to getting ahead.” Such views made Americans more tolerant than Europeans and Canadians of inequality and more suspicious of government attempts to reduce it.

Yet the hardships of the Great Recession may be changing that, giving an unexpected resonance to the Occupy Wall Street movement. Falling wages and rising unemployment are making us appreciate what we ignored during the good times. Social mobility is actually lower in the U.S. than in most other developed countries—and falling.

Academic studies show that if a child is born into the poorest quintile (20 percent) of the U.S. population, his chance of making it into the top decile (10 percent) is around 1 in 20, whereas a kid born into the top quintile has a better than 40 percent chance. On average, then, a father’s earnings are a pretty good predictor of his son’s earnings. This is less true in Europe or Canada. What’s more, American social mobility has declined markedly in the past 30 years.

A compelling explanation for our increasingly rigid social system is that American public education is failing poor kids. One way it does this is by stopping them from getting to college. If your parents are in the bottom quintile, you have a 19 percent chance of getting into the top quintile with a college degree—but a miserable 5 percent chance without one.



The American Dream is about social mobility, not enforced equality. It’s about competition, not public monopoly. It’s also about philanthropy, not confiscatory taxation.

I’ll cheer up even more when I hear those words at a Republican presidential debate. Or maybe next week we should just tell the candidates to shut up and play poker.