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June 10, 2007

THE MONEY ISSUE The Poverty Platform

By MATT BAI

In April 1964, when Lyndon Johnson sought to rally public support for his new War on Poverty, he did it while sitting on a pile of two-by-fours on a front porch in Inez, Ky. — an appearance that helped establish the Appalachian South as a national symbol of economic deprivation. And so it was fitting that John Edwards, announcing his candidacy for president at the end of last year, chose as his setting not his hometown, Robbins, N.C., where he unveiled his first presidential campaign four years earlier, but the front yard of a mangled brick house in New Orleans’s Upper Ninth Ward. New Orleans is the new national shorthand for neglect, and it is, not coincidentally, the spiritual center of Edwards’s campaign. After Hurricane Katrina washed away, with brutal efficiency, some of America’s most impoverished neighborhoods, Edwards took more than 700 students to the submerged city to help rebuild homes and schools, and in the months since then, he has never stayed away for long. “I can always tell when he’s been to New Orleans,” says Bruce Raynor, a co-president of the hotel and garment workers’ union, who is close to the former senator. “His passions are stirred. It angers him.”

On his most recent trip to New Orleans, on a Friday early last month, Edwards returned to the Upper Ninth Ward. Riding over in a van with Edwards and the actor Danny Glover, whom Edwards got to know when they toured the country together to help organize hotel workers last year, I remarked that until now I’d seen the hurricane’s damage only through the lens of a television camera. “It hasn’t changed,” Edwards said gloomily, gazing out the window. Rain clouds were gathering. “The Ninth Ward is exactly the same as it was.”

I asked him why.

“That’s a really good question,” he said with a sigh. “I wish I had an answer.”

Our first stop was a Habitat for Humanity rebuilding project. We parked on a block of boarded-up houses, and Edwards, wearing a navy blue work shirt, faded jeans and a tool belt, alighted from the van and walked to the work site, which was instantly surrounded by a swarm of photographers. He shook some hands and smiled, but it was clearly a forced smile, not that Edwards smile that looks as if someone just plugged him into a wall outlet. He waved his hammer around and pounded a nail or two, looking vaguely uncomfortable. Then he answered a round of questions at a microphone stand that had somehow appeared in the street.

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Next we piled back into the van and headed over to Orelia Tyler’s little brick house, the one where Edwards first announced his campaign just after Christmas. This was to be a reunion of sorts. “Oh, yeah, I remember this place,” Edwards said as we turned onto Tyler’s street.

Tyler’s house smelled of the chocolate cake she had baked for the occasion. Edwards sat down on the couch in the freshly rebuilt living room — stucco walls, hardwood floors, lamps with the plastic still on their shades — next to Tyler’s sister, who was staying at Tyler’s because her own home remained uninhabitable. She was weeping. A fraudulent contractor had taken $20,000 from her and disappeared, she said, without so much as touching her decimated house. It had happened to a lot of families. She said the Bush administration’s Road Home assistance program had offered her a little more than $10,000 for rebuilding her house.

“Ten thousand?” Edwards asked, incredulous.

“Yes.”

“And how much would you need to rebuild it?”

“Sixty-eight thousand.”

“Terrible,” Edwards said, shaking his head slowly.

“I’m hurting,” Tyler’s sister said. “I just would like to get home.”

I had the distinct sense that Edwards, who had been flying from one fund-raiser to another all week, might be thinking the same thing. He rubbed his eyes. After a few minutes of awkward conversation, he rose to leave. “Nice to seeyoo, darlin’,” he drawled, patting Tyler’s knee. We all climbed back into the van, Glover carrying the warm chocolate cake that Tyler never got the chance to serve. Edwards took a slice. He arrived in New Orleans in the middle of the night, he said, and hadn’t been able to sleep. He had stayed up for hours.

I asked him why.

“I don’t know,” Edwards answered, sounding resigned.

It makes sense that John Edwards would be emotionally drained from traveling around the country while his wife, Elizabeth, is back in North Carolina, undergoing treatment for cancer. He has always been a more enthusiastic campaigner when Elizabeth, the more gregarious personality and more skillful political thinker of the pair, is at his side. Now he talks to her and his two youngest children several times a day from a cellphone, stealing a few minutes in a van or backstage before delivering a speech.

And yet, even taking that personal ordeal into account, there is something surprisingly arduous, even joyless at times, about Edwards’s second bid for the White House. Modern presidential

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campaigns tend to be aggressively upbeat and personality-driven; sure, every candidate has his favorite issues, but those issues generally exist mostly to color the candidate’s driving ambition with some shade of higher purpose. Edwards’s campaign feels oddly inverted. There’s no doubt he wants very badly to win, and yet there are times when the entire campaign seems little more than an excuse for him to talk about the issue with which he is now most closely identified: the case for the 37 million Americans living in poverty. The centerpiece of his campaign is a sprawling plan to eradicate poverty altogether by 2036. Echoing Robert Kennedy’s final campaign 40 years ago, Edwards, who has apologized for his Senate vote to authorize the invasion of Iraq, argues that Americans can’t prevail in a civil war abroad but that we can — and should — wage another war on poverty at home. Everything else in the campaign, Edwards seems to think, all these carefully orchestrated photo ops and drop-bys and van rides with the media, is the kind of empty political theater from which he declared himself liberated after his last presidential run. He gives the impression that he simply endures it.

In that last campaign, in 2004, Edwards, running as the unflappable optimist in the Democratic primaries, wrote an inspiring book about his days as a plaintiff’s lawyer; this time, his unusual entry into the now-standard field of campaign books is called “Ending Poverty in America: How to Restore the American Dream,” a collection of bleak and technical essays by leading liberal academics. In 2004, when Edwards repeated endlessly that he was the son of a millworker, he sounded proud and hopeful; now, when he brings up his humble beginnings, it’s mainly to suggest that he knows what it’s like to be one layoff or one X-ray away from destitution. This kind of grim “twilight in America” approach hasn’t been very successful for Democrats in recent decades. And yet Edwards could be poised to profit from the current moment in Democratic politics. Over the last few years, the party’s labor leaders and its left-leaning intelligentsia — Ivy League academics, columnists, economists — have become increasingly agitated about the ever-widening disparity between a tiny slice of wealthy Americans and the growing ranks of the working poor. These progressives see in Edwards’s campaign a test case for what they hope will be a more anticorporate, antitrade message for the Democratic Party.

The significance of what Edwards is saying, though, goes well beyond messaging and tactics. As the first candidate of the post-Bill Clinton, postindustrial era to lay out an ambitious antipoverty plan, he may force Democrats to contemplate difficult questions that they haven’t debated in decades — starting with what they’ve learned about poverty since Johnson and Kennedy’s time, and what, exactly, they’re willing to do about it.

If you’ve recently flipped to Lou Dobbs on CNN or opened the pages of a liberal political journal like The American Prospect, you might have the impression that America in the Bush years has slipped into a kind of Dickensian darkness, a period of unbridled greed and economic deprivation on a scale not seen in this country since the Great Depression. Like so many things in politics, this has some basis in truth, but only some. To compare Bush’s America with Herbert Hoover’s — or Lyndon Johnson’s, for that matter — is to engage in not very helpful hyperbole. According to the economists

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Thomas Piketty and Emmanuel Saez, the average income of an American taxpayer in 1929, using today’s dollars, was about $16,000 a year; the entire middle class, in other words, was poor by modern standards. It’s true that the official poverty rate, while fluctuating quite a bit, is pretty much unchanged from where it was 40 years ago (it was 14.2 percent in 1967, compared with just under 13 percent at last count), but it’s also true that what we call poverty has changed strikingly. When Johnson stepped onto that front porch in Inez, there were still rural poor who had no electricity, no running water, no primary-school education. Now most rural towns have access to satellite TV, and even the worst of the housing projects built in the 1960s — though thoroughly horrid places to live — come with solid roofs and indoor plumbing.

While poverty itself may little resemble what it was in 1929 or even in 1964, however, the distance between what poor and wealthy Americans earn has widened considerably in recent decades. Since the 1970s, the portion of national income attributed to the superrich — that is, the top one-tenth of 1 percent of earners — has essentially tripled. In fact, in recent years, the richest 1 percent of Americans have controlled the largest share of national income — currently 19 percent — since Franklin Roosevelt took the oath of office. If you’re in high demand as, say, a cosmetics C.E.O. or a basketball player, you’re making exponentially more than you would have made 30 years ago, while the lowest-earning Americans who buy your lipstick or watch your games on TV have barely seen their wages budge. It’s not that the poor are getting poorer, or that more Americans are falling below the poverty line, so much as it is that poor Americans are falling further and further behind those who succeed.

Economists have a lot of ideas about what factors are contributing to this worsening inequality, from Bush’s tax cuts to the ballooning pay packages of corporate executives, but the general consensus seems to blame a combination of technological advances and globalization. Automation means that companies can make the same products with fewer workers, and the emergence of a global work force means that they don’t have to make those products here anymore. As a result, wages for high-school graduates, who used to be able to get factory jobs, have stagnated, while highly educated workers have become increasingly valuable to companies seeking any intellectual advantage in an increasingly competitive world. Though inequality runs counter to what we think of as American values, there’s no consensus that it actually reduces growth — in fact, there are those who argue that inequality is a natural byproduct of growth. And yet, most social scientists seem to agree that, sooner or later, income inequality will exact a steep social cost, if not an economic one.

During the 1990s, Paul Romer, a Stanford economist, emerged as one of the world’s leading theorists on economic growth. Recently, though, Romer has changed his focus, and he told me that the country, too, is entering a new phase. For most of the 20th century, he explained, economists focused on stability — that is, understanding and controlling inflation and depressions. Then, toward the end of the century, growth became the central obsession. Now, Romer said, we are embarking on the next great challenge in American economics: mitigating inequality.

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The main economic debate in Democratic Washington revolves around how to do this. It is a debate over the tools of economic policy — taxes, trade, welfare — and how to use them. The argument here breaks down, roughly speaking, along an ideological continuum from doctrinaire conservatives on the right all the way to reborn populists on the left. And the challenge for John Edwards, if he really wants to reset the national agenda on poverty and inequality, is to figure out where on this continuum he’s going to live.

On the far right of the spectrum are those who don’t see inequality as much of a problem at all: the trickle-down conservatives, so named for the theory popularized by Ronald Reagan and then by George W. Bush. This theory holds that markets work at maximum efficiency when left to their own devices, enabling some of the money flowing into Wall Street and corporate boardrooms to “trickle down” to the middle class and the poor through spending and investment.

In the center would be those Democrats — and maybe a few Republicans — who make up what could be called the redistribution camp. This group, personified by Gene Sperling, Bill Clinton’s former economic adviser, and Robert Rubin, his onetime Treasury secretary, subscribe to John Kennedy’s dictum that “the rising tide lifts all boats.” They share the conservative philosophy that growth at the upper echelons of society is good for everyone, but with a significant difference: government has to redistribute some of that wealth by progressively taxing the affluent and giving that money back to the poor through carefully incentivized social programs and tax breaks.

The redistribution folks think of globalization as inevitable, a transformation as unstoppable as industrialization was at the turn of the last century. That’s why they generally embrace free trade, and it’s also why they believe that more workers will have to go to college in order to compete for high-paying jobs. Larry Katz, a Harvard economist, points out that the United States faced a similar dilemma at the end of the agrarian age, when kids growing up on farms routinely dropped out of school before getting the high-school degree they needed in the automated world. The country, led by rural states, committed itself to universal high-school education — an accomplishment that played no small role in expanding the middle class. Now, as we transition out of the industrial era, Katz says, universal access to college may be the only way to keep American workers competitive.

On the left end of the continuum are the populist Democrats who tend to gravitate, at least at this early stage of the campaign, toward Edwards’s candidacy and who espouse a philosophy you might call “predistribution” — using the tools of government to divert money from the wealthiest Americans before they earn it. According to these Democrats, the rising tide stopped lifting all boats sometime in the 1970s, when manufacturers, challenged by foreign competitors, began to seek out cheaper labor overseas. That’s when the fortunes of American employers and their workers, so closely aligned throughout much of the 20th century, began to diverge. “The rising tide is lifting all yachts,” quips Robert Reich, the former labor secretary, “but rowboats and dinghies have had a harder time.” The populists are furious at the Clinton crowd, who they believe took the party in the wrong direction during the 1990s, chasing Wall Street money, signing harmful trade deals and

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reforming welfare when they should have been standing up for all the poor people and union members who weren’t sharing in the prosperity.

Predistribution Democrats dispute the notion that the effects of globalization are inevitable; to them, the decline in American industry was inflicted on the country through policies that favored business at the expense of wage earners. And they think it’s still possible, by reversing those policies, to live in a country where a guy with a high-school degree can have a rosy economic future. They would redistribute more income (they often point out that the marginal income tax rates on the highest earners once exceeded 90 percent), but they also favor pulling a series of economic levers that would favor wage earners over corporations. For instance, predistributionists favor keeping interest rates lower, even if it risks the inflation that businesses and consumers deplore, because lower rates lead to tighter labor markets, lower unemployment and higher wages. They’re against future trade deals that might benefit businesses but displace workers. And whereas the redistribution Democrats generally prefer a balanced budget, the predistributionists consider budget deficits necessary in order to make large-scale social investments in health care and job retraining.

A few years ago, the Democrats on the far end of this spectrum were in the minority in the party. Most Democrats at that time, including John Edwards, openly identified with Rubinesque redistribution, preaching the virtues of rapid growth and fiscal discipline. (Although it’s hard to recall this now, no less a liberal hero than Howard Dean, when he set out to run for president in 2003, made a balanced budget one of the central planks of his campaign.) But all that seems to be changing. The corporate excesses of the Bush years and the continued decline of American manufacturing, along with the effect of Bush’s tax cuts on the wealthy, have both angered and emboldened establishment Democrats, who now sound increasingly alarmed by the yawning divide between rich and poor. Even some staunch supporters of free trade — the Princeton economist Alan Blinder, for one — have publicly voiced their concerns about the uncontrolled effects of globalization on workers. As Will Marshall, president of the centrist Progressive Policy Institute, says, only partly in jest, “Bush has made populists of us all.”

This word — “populist” — is thrown around a lot in connection with John Edwards and his presidential campaign. The New Republic titled its Edwards profile “The Accidental Populist,” and the word has been used to describe him, at one point or another, in virtually every major newspaper in the past several months. It is a word with a specific meaning to the historians who study political campaigns: it describes someone who appeals to deep-seated resentments against corporate interests and the wealthy. Attaching the populist label to Edwards implies that he has planted himself on the far left of the inequality continuum, alongside the antitrade, anticorporate, predistribution Democrats.

This certainly wasn’t the John Edwards who embarked on his first presidential campaign in 2003, a smooth and centrist Southerner whom party insiders had anointed the next Bill Clinton. Back then,

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Edwards didn’t really know much about politics or policy. He had run only one campaign — his successful bid for a Senate seat from North Carolina in 1998 — and had spent his entire career before that as a plaintiff’s lawyer. By Edwards’s own admission, when his phalanx of presidential advisers sat down back then to discuss strategy or policy questions, Edwards was always the guy in the room who knew the least. It wasn’t until the later stages of the primaries, after he honed his theme of the “two Americas,” that Edwards found a voice of his own and was swept to the second spot on the Democratic ticket.

About a month after the 2004 election, Edwards met with his most loyal advisers at his cluttered home on P Street in Georgetown. It was assumed he might run again, and the question facing Edwards was how best to spend his time, intellectually and politically. There was talk of a foreign-policy study group, or maybe something to do with education, another huge issue for Democrats. It was Elizabeth, hearing Edwards expound yet again on poverty, who finally pushed these other suggestions aside. What Edwards clearly cared about most, she said, was poverty. She knew her husband better than anyone, and she knew that poverty was the issue that really lighted him up during the campaign, the one he had brought home with him and railed about in the privacy of their kitchen. Maybe it wasn’t the most exploitable issue in Democratic politics, but if that’s what animated Edwards, why shouldn’t he just go out and do something about it?

Edwards set up a center to study poverty at the University of North Carolina, which he visited about once a week. He traveled the country and the world — India, the Middle East, Uganda — and convened conferences of all the brightest antipoverty experts on the left. At the same time, he took on an assignment to lead, along with the former Republican housing secretary Jack Kemp, a commission on Russia policy for the Council on Foreign Relations, and he took a well-paying job at a hedge fund in New York. As he grew more comfortable in his new roles, Edwards stopped returning the calls of all the campaign consultants who once ruled his routines and his rhetoric. When I saw him for the first time since his 2004 presidential campaign, at a Chapel Hill cafe in January 2006, he seemed to me a changed man — liberated, self-assured, a little defiant.

“I saw the difference in the way people responded to me when I was talking from here,” he told me that day, patting his heart, “and not from here.” He raised a finger to his head. “Just being myself and standing up for what I believe, and not being coached and not being consulted, is what it’s all about.” He derided all the “phoniness” in Washington and talked about the scores of poor neighborhoods he had been visiting on his own. “With just a few breaks the other way, I would be sitting where these people are right now,” he told me. “I know it sounds corny, but when I can’t sleep at night, I get these pictures in my head of all the people I’ve met. I wonder what more I should be doing.”

Exiling oneself from Washington and being subsequently reborn as a more candid and compassionate politician is an old and popular plotline in Democratic politics. Robert Kennedy built his legend on the same idea in the mid-1960s; more recently, Bill Bradley and Al Gore have

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adopted similar themes. Edwards clearly sees himself in this vein, and his conversion appears to have been sincere, if not entirely original. His campaign this time reflects a pronounced aversion to being stage-managed. Some of his loyalists from 2004 remain, mostly in informal advisory roles, but there is no single über-strategist like Bob Shrum, who plotted Edwards’s strategy in his Senate campaign, or David Axelrod, who advised him during his last presidential race and is now steering Barack Obama’s campaign. The operation itself feels chaotic and decentralized, with John and Elizabeth Edwards making an unusual number of mundane decisions themselves. Edwards seems to have determined that, this time, he and Elizabeth will do the scripting.

When it comes to the issues, Edwards hasn’t radically changed any of his positions from his last campaign (with the notable exception of having renounced his vote on Iraq). But he seems to be saying more of what he really meant back then, when advisers prevailed on him to navigate more cautiously. For instance, in 2004 Edwards had a plan to offer health care to all of the nation’s uninsured children, but he stopped short of offering a more expansive plan for everyone, because conventional wisdom held that such an idea was too expensive and too liberal. Now the cornerstone of Edwards’s platform is his plan for universal health care. Based on programs in Massachusetts and California, Edwards’s proposal would compel uninsured Americans to buy health insurance from a pool of private plans, although there would also be the option of buying into a government program modeled on Medicare. (This last bit is significant to liberal policy analysts, since they see it as a potential gateway to single-payer health care at some point in the future.) Employers would either have to offer health care packages to their workers or pay into a national fund for the uninsured.

Edwards would also triple the earned-income tax credit, expanding it from a program aimed at low-income workers with children to one that covers childless workers as well. To promote savings among the poor, he would create “work bonds” — special savings accounts in which the government would match the first $500 in saved wages each year. He says he would create a million “steppingstone jobs” to draw more poor adults into the work force; the specifics of this idea are vague, but presumably the government would create a New Deal-style jobs program, putting Americans to work in parks and on road projects. Building on a pilot project he has already started in North Carolina, Edwards proposes making the first year of public college free to students below a certain level of income who agree to work 10 hours a week, as he did. (Students at private colleges who took part would get the equivalent amount in tuition support.) In what is perhaps his most counterintuitive reform, Edwards calls for getting the federal government out of the business of maintaining housing projects. He would vastly expand a Clinton-era policy that gives vouchers to families who currently live in public housing, which they can use to rent affordable apartments in other neighborhoods.

Edwards estimates that the health care plan alone would cost as much as $120 billion annually and that the rest of his antipoverty proposals might tack on, if enacted, as much as $20 billion. As to how to pay for all this, he says he would start by repealing Bush’s tax cut on families making more

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than $200,000, which Edwards’s staff estimates could net $90 billion a year or so. The rest, he posits, might come from additional taxes on the wealthy or corporations; a push to collect more than $50 billion in unpaid taxes; and cuts in what Edwards identifies as wasteful spending. These last two ideas, of course, are perennial campaign lines whenever the subject of how to pay for things arises. What distinguishes Edwards from his rivals is his admitted willingness to run a budget deficit of up to about 2 percent of the federal budget (or roughly where it is now). Edwards argues that America’s structural inequality demands some investment up front if the economy is to continue growing later — a more honest position, whether one agrees with it or not, than the one more commonly offered by Houdini-like politicians who claim they can somehow provide health care, hold the line on taxes and balance the budget at the same time.

Aside from the price tag, however, what stands out the most about Edwards’s antipoverty ideas is their familiarity. It’s as if he has taken most of the proposals that have been talked about in policy groups and at university forums since the 1990s and thrown them all together into one comprehensive and expensive package. The individual proposals themselves, far from being radical or populist, basically sound — there’s no other way to put it — Clintonian.

Edwards would do a few of the things that the predistribution crowd likes. He would raise the minimum wage further than Congress just did, to $7.50, and loosen the restrictions on organizing workers — proposals that most Democrats have long favored and that would very likely, in the big picture, have only a modest effect on structural poverty. When I asked him about some of the issues that are more divisive for Democrats, though, Edwards was mostly noncommittal, trying to place himself somewhere between the Rubinite center and the populist left. On trade, Edwards said he’d like to include more protections for workers in any new pacts (a popular formulation that sounds better in theory than it is likely to work in reality), but he won’t support the pause on new free-trade deals that some liberals want. The reason: Edwards is adamant that his antipoverty crusade extend to other countries as well, where most workers benefit from trade with the United States.

As we sat in a hotel hospitality suite in New Hampshire’s north country last month, accompanied by a Muzak version of Chicago’s “If You Leave Me Now,” Edwards said he might consider pressuring the Fed to lower interest rates in order to tighten labor markets, but he wasn’t sure. Similarly, he said he was wary of raising the tax rate on capital gains too high, fearing that it would cause capital to flee the country. He sounded equally unenthused about returning to the days of steeper levies on the superrich (beyond the tax-cut rollback he has proposed on those making more than $200,000), even though his official position is that he would consider them. “Would I be willing to consider higher rates on the highest-earning Americans — you know, people who make millions of dollars?” he asked. “It’s something I’d be open to. It’s not something I’d propose.”

In fact, the more you talk to Edwards, the more apparent it is that the populist label doesn’t quite fit. While he talks incessantly about economic injustice, Edwards isn’t proposing anything — beyond an oil-company windfall tax, which Hillary Clinton has also embraced — that would strike a

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serious blow against multinational corporations or the top tier of American earners. Even in his rhetoric, Edwards seems to deliberately avoid stoking resentments or pitting one class against another the way a true populist would, unless you count taking a few easy shots at Wal-Mart.

“Rhetorically, if you’re calling Edwards an economic populist, it’s true he cares a lot about the poor,” says Robert Reich, who isn’t yet supporting a candidate. “He evinces a lot of concern for the middle class and middle-class anxieties. But he’s not in any way attacking the rich or corporations.” Reich says this with a note of disappointment. “He’s not explaining one fundamental fact of modern economic life, which is that the very rich have all the money.”

When I asked Edwards if he blamed large corporations or the wealthiest Americans for inequality, he appeared briefly confused by the question. “No — no,” Edwards repeated, shaking his head. “I just don’t think blaming helps, to be honest with you. What’s the point?”

Even Democrats who support other candidates admit, grudgingly, that Edwards’s proposals would very likely have some measurable impact on American poverty. The expansion of the earned-income tax credit alone, Democratic analysts say, would translate into a $750 annual windfall, on average, for about four million poor Americans. Social scientists say pilot projects along the lines of Edwards’s work bonds have lent credence to the idea that the working poor can successfully be encouraged to save some of their wages, as long as the process of setting up the account isn’t onerous. The public-housing vouchers Edwards talks about have been the subject of some controversy, and opponents cite mixed results, but most experts — not to mention anybody who has ever spent time in the projects of the Bronx or Boston — believe that finally dismantling the 1960s experiment in warehousing the poor can only be a good thing for the people who live there.

The question isn’t whether these policies will make a difference, but whether they will make all the difference — that is, whether Edwards’s plan would really eradicate poverty in America, or at least significantly diminish it. Most leading economists in the antipoverty field, particularly those who aren’t partisans in the old and stultified political debate between Great Society liberals and Reagan-era conservatives, now talk about poverty solutions as having two components. The first and most obvious is economic. Being poor means, quite literally, that you don’t have money; it stands to reason, then, that offering jobs and tax credits that encourage people to work will, on some level, alleviate poverty. The second component, however, has to do with what a lot of academics now refer to as “human capital.” This comprises the other, less visible resources, aside from money, that many poor people lack: education, marketable skills, contacts, self-discipline. The kinds of advantages that middle-class families take for granted — knowing, say, how to ace a job interview or how to prepare your children for success in school — often elude those who have grown up in poverty, thus perpetuating a cycle of economic failure.

Social scientists have been thinking hard about how to create policies that address this less

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quantifiable aspect of poverty. In New York City, acting on the work of his special commission on poverty, Mayor Michael Bloomberg is raising money (an undisclosed amount of which is his own) for an innovative pilot project, inspired by similar programs in countries like Mexico and South Africa, that will award cash payments to parents who participate in their child’s health care and schooling. Some experts, meanwhile, argue the best (and maybe the only) way to bridge the divide in human capital is to expand and improve early-childhood educational programs. One leading voice in this camp is the University of Chicago’s James Heckman, a Nobel Prize-winning economist, who contends, after years of studying the subject, that all the low-wage jobs and adult training programs on the planet won’t succeed in eliminating poverty unless government intervenes in the earliest stages of childhood, when tax dollars have been shown to yield the most return. “If people have limited options, low skills and an inability to function in the larger economy,” Heckman told me, “you can give them money, but if you don’t give them the skills, if you don’t somehow improve their access to those institutions that make a society productive, then all you’re going to do is more of what we did in the 1960s with the War on Poverty — namely, it will eradicate poverty in the sense that it will give people money, but it won’t lead to sustained growth of income, and the kids of these people will probably also enter poverty.”

To liberals, historically, taking on things like parenting skills and self-discipline veers dangerously close to blaming people for their own poverty — which is what they charge conservatives with doing. Instead, Democrats in the era since Bill Clinton have settled on a delicate formula for talking about poverty: they make concrete proposals in the economic realm (job training, tax credits, a higher minimum wage) while sternly deploying code phrases (“personal responsibility,” “playing by the rules”) that suggest that those in need also have to make better choices for themselves and their children. Not surprisingly, perhaps, Edwards follows this same basic regimen. While he talks about making people “take responsibility” and emphasizes the value of work, his antipoverty agenda contains little that is new or innovative to encourage better parenting or to impart more useful life skills. When I asked him about this, Edwards assured me that he understands the scope of the issue. He told me that he had visited more than 100 antipoverty and neighborhood centers around the country since the last election and that what he saw in some of those places stunned him. “When you’re sitting with a woman who’s working two or three jobs and having a terrible time making ends meet, and she tells you that her 14-year-old girl is having her third child, it makes you weep inside,” he said, with obvious emotion. “I mean, where’s the hope? They are absolutely doomed to poverty.”

Still, Edwards rejects the idea that government can get involved in the way people live their lives and raise their children. “The government has nothing to do with this,” he said. “And I’m not sure the government should have anything to do with this.” Instead, he told me, part of a president’s job is to encourage the community-based groups that deal with issues like teenage pregnancy and absentee fathers. I asked him how, exactly, he would do that. “By meeting with these people,” he said. “Lifting them up.”

From a political standpoint, the specific policy details of Edwards’s antipoverty agenda matter less

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than the fact that he’s standing up for something he believes in — or at least that’s how Edwards sees it. After watching Bush and the Republicans turn John Kerry into the caricature of a vacillating politician, Edwards came away from the 2004 campaign with a critical insight: campaigns are about who you are, not what policies you propose.

“Presidential elections are not just about issues — they’re about character and integrity and values,” Edwards told me when we met for coffee in Chapel Hill last year. “I didn’t realize when I went into it that what you stand for is more important than all the rest of it put together. I believe that very strongly now.” In other words, whatever one might say about the details of Edwards’s proposals, he is betting that voters will see two things: first, that he is a serious thinker who has offered detailed plans for the country (something they did not necessarily see in him in 2004), and second, that he is a man of such character and resolve that he is willing to talk about poverty in rooms full of wealthy lawyers and Iowa farmers, whether or not they share his passion for the poor.

There is a kind of meta-politics at work here, as there so often is in the modern campaign, where candidates feel compelled to telegraph their authenticity to cynical voters. Several times while we were together, Edwards pointed out to me, as he often does in interviews, that no one in politics thinks poverty is a winning campaign issue, and thus, the fact that he harps on it can’t possibly be helpful to him. He says this to underscore the fact that he is not the kind of candidate who exists to give the people what they want. But of course, as Edwards surely knows, the mere act of taking a stand on an issue that is considered a political loser makes him, in the eyes of many liberals, a candidate of uncommon courage, even though he isn’t saying anything that most Democratic primary voters don’t already agree with. So, in an odd way, building a campaign around poverty — while at the same time calling for an immediate troop withdrawal from Iraq, which thrills liberal partisans — turns out to be a very shrewd primary strategy, after all. It’s not that Edwards doesn’t believe in what he’s saying; it’s just that he surely knows, at the end of the day, that it isn’t really a liability, either.

Edwards has assiduously courted the party’s powerful service unions, whose members often work low-paying jobs with little security or benefits. He seems to have determined early on in the race, from the time the contours of the field began to take shape soon after the 2004 election, that he alone had the star power to come at Hillary Clinton from the left, to position himself as the credible Democratic candidate who would lash out against the war and side unequivocally with the party’s liberal interest groups. The unexpected entry of Barack Obama into the race certainly complicated this calculus. An exciting new face, Obama is also trying to play Robert Kennedy to Clinton’s Hubert Humphrey, running hard against the war and trying to peel off labor and minority voters. Obama has, for most of this year, pushed Edwards to the periphery of news coverage and fund-raising. Still, Edwards seems to be counting on the notion that Obama, as inexperienced a candidate as Edwards was last time, will lose some of his allure along the way. Although Edwards trails his two principal rivals nationally, polls have shown him running strongly in Iowa and South Carolina, two critical early states.

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Whenever you wrap yourself in the mantle of morality and conviction, however, even the smallest hypocrisy can leave an indelible stain. Edwards is, after all, a very wealthy man, given to some of the excesses that wealth allows. While Edwards was denouncing inequality across the land, he was also building, near Chapel Hill, the largest home in the county, a 28,000-square-foot mansion with its own indoor basketball and squash courts. He also made news recently for receiving a $400 haircut in a Los Angeles hotel room. The decision that most complicates Edwards’s political message, though, is his affiliation with Fortress Investments, the hedge fund where he worked in 2006. Strictly speaking, hedge funds aren’t especially nefarious enterprises in American life, but as a symbolic matter, they represent exactly the kind of exclusionary wealth that has led, more than anything else, to the gross inequality that Edwards deplores. (More than symbolically, Fortress has invested in exactly the kind of subprime-mortgage dealers that Edwards has repeatedly castigated for preying on the poor.) If Edwards isn’t keen on shouting about how, in Reich’s words, “the very rich have all the money,” it may be because he’s hardly the guy to be making the case.

Edwards seems to find it hard to believe that anyone could think he’s less than sincere about his commitment to the poor. He is, as he never grew tired of reminding us in 2004, the son of a millworker, a man who worked his way through college and devoted his entire legal career to righting the wrongs done to powerless people. “I would argue that my life is a very consistent pattern,” he told me during our conversation in New Hampshire. “It’s true — I worked for a hedge fund. No denying that. I did. It’s also true that I’ve made a lot of money in my lifetime. So do we want somebody as president who hasn’t been successful?” He laughed. “And would it be better if I didn’t want to help people to have a chance to be as successful as I have been? I think it’s pretty clear where my heart is.”

That may be, and yet it doesn’t help when Edwards tries so hard to establish his affinity for the common man that it makes you wince. When the Fortress story first surfaced, for instance, he told Nedra Pickler of The Associated Press that he joined the hedge fund partly because he wanted to learn more about the way markets affected inequality. This is rather like saying you hired a stripper in order to better understand the exploitation of women. Another cringe-worthy example: In April, The A.P. asked the announced candidates in both parties what their dream job would be if they weren’t in politics. It was meant to be an amusing exercise. Barack Obama said he’d be an architect. Bill Richardson said he’d play center field for the Yankees. Rudolph W. Giuliani said he’d be a sports announcer. What was Edwards’s dream job — the alternate life he lay awake fantasizing about, had he not become a millionaire lawyer and politician?

“Mill supervisor.”

Some of these problems might have been avoided if Edwards were running the kind of conventional campaign he ran last time. Any half-witted political consultant could have told Edwards that, if he really wanted to run for president this time as the champion of the working poor, then maybe he should stay away from haircuts that cost twice what a minimum-wage worker makes in a week. In

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fact, some adviser with more than half a wit probably did try to tell him, but Edwards seems determined not to be “handled” in this way, to avoid the overcalculation that appeared to paralyze Kerry in 2004. All of which brings to mind an important question about Edwards’s antipoverty agenda: should he manage to outlast Clinton, Obama and the others to win the nomination, does he have a strategy to sell his lavish plan to the American people? How exactly does he plan to pitch middle-class voters on the War on Poverty, Act II?

Since Ronald Reagan, Democrats have largely avoided talking too much about social programs for the poor, fearing that middle-class voters would recoil at the thought of more of their hard-earned money going to welfare moms. Some progressives have tried recently to get around this problem by arguing that there really isn’t much of a distinction anymore between the poor and the middle class — that, as inequality worsens, the once-solid middle class, as the Harvard law professor Elizabeth Warren has written, is “vanishing.” By this theory, average voters should now support antipoverty programs because those same programs will benefit the middle class. This is a tricky formulation, since it seems to rely on a narrow and convenient definition of “middle class” — namely, struggling households headed by two working parents with no education beyond high school. In fact, as the Washington policy group Third Way documented in a recent report, middle-class college graduates have performed remarkably well in the new economy, and while their debts have risen, their wealth and assets have accumulated even faster. It turns out that the middle class, in the sense that most Americans think of it, isn’t vanishing at all.

Edwards seems conflicted about which argument to make. He is most compelling about poverty when he’s talking about it as a national obligation — what he calls “the moral issue of our time.” But he also recognizes the need to persuasively connect it to the self-interest of middle-class voters. “For the majority of Americans, you have to convince them that it’s good for America and good for them,” he told me. “Which means it’s important to strengthening and growing the middle class. It’s important to the inequality issue. It’s important to America, and as a result important to them personally.” Edwards summarized his message to voters this way: “We’re all in this together. Do you love your country? We want everyone to have a chance.”

At times, he seems to fall back on the “vanishing middle class” idea, telling audiences that five million more Americans have already slipped into poverty during the Bush years. (Translation: You could be next.) But when we talked about it, he bluntly admitted that such a pitch probably doesn’t work. “They don’t feel that way,” he said, referring to middle-class voters. “I think there is a discomfort, but most people don’t accept the idea that they’re going to go backward.”

Given his obvious passion for a new war on poverty, it’s puzzling that Edwards doesn’t seem to have yet thought through how one really builds a mandate for it. In order to sell Americans on a costly new bundle of antipoverty programs, it’s probably not enough to make an argument of conscience; there has to be some clear and compelling reason why ending poverty isn’t just good and desirable but also critical to the nation’s economic health. The stakes here are exceptionally high. If Edwards

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isn’t successful, then Democrats will most likely conclude, once again, that poverty is a losing issue. It took 40 years after Robert Kennedy’s death for another establishment Democrat to summon the courage to build a campaign around economic injustice. If Edwards should win the nomination but lose the White House, it might well be another 40 years before anyone tries again.

Matt Bai, a contributing writer, covers national politics for the magazine. His book, “The Argument: Billionaires, Bloggers and the Battle to Remake Democratic Politics,” will be published in August.

Copyright 2007 The New York Times Company

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