The “knock out game,” where defenseless people are brutally and randomly attacked, is a shocker. It’s hard to imagine why teenagers, apparently bored out of their minds, would get a thrill out of beating up an old man or woman.

We are all outraged. But we are also divided on the causes. Some charge racism. Others cry a sick culture. Still others blame rising inequality in America.

Inequality was the subject of President Obama’s recent speech. He did not address the knockout game, but he clearly believes income inequality is the root cause of many of the social problems in America. It’s behind the rising mistrust in our society which he believes is damaging families and harming our “social cohesion.” I wouldn’t be surprised if the president thinks that his narrative of “mistrust” is at least partly to blame for the spread of the knockout game.

He is right about one thing--partly. There is an “income gap” in America, although as The Heritage Foundation’s Stuart Butler and Donald Schneider point out, the research shows little or no relationship between that gap and people’s ability to move up the ladder of opportunity. Yes, it is true that there is a problem with social mobility for those starting out near the bottom, even though the degree of the problem is often exaggerated.

But Obama is wrong about the cause. He thinks it is that the government has done too little to redistribute money and create new programs. The welfare state is still too small and entitlement spending too low, he says. Not enough is spent on unemployment insurance or federal education programs. If only the minimum wage was higher, or unions had stronger collective bargaining rights, presumably the “defining challenge of our time,” as he calls the issue of inequality, could be solved.

Put aside the grand canyon-sized gap between rhetoric and the reality; how raising the minimum wage a few dollars, or giving unionized government employees a raise, is supposed to even begin to solve the deep-seated social problems of America’s declining civil society is beyond me.

But the deeper problem is that President Obama has completely reversed cause and effect. America’s inner-city public schools are not a disaster because the minimum wage is too low. Rather they are a disaster because they don’t give young people the education and skills they need to command a sufficient wage in the market place. It is not insufficient government intervention which has caused inequality, but too much of the wrong kind of intervention.

As Butler, the American Enterprise Institute’s Charles Murray and Harvard’s Robert Putnam have shown, the causes of poverty and low income mobility are due much more to the decline of habits and attitudes that once fueled the upward rise of American households. The key building blocks of advancement, such as industriousness, the habit of savings, marriage and civic associations, are crumbling and in some cases even non-existent. The cause is not insufficient redistribution of income by government, but the destruction of the social and personal capital of people by that distribution system—namely, the welfare state.

The dependency and life style created by it is not some temporary thing, as the president pretended it was in his speech. Rather it has become the culture of a government-sponsored underclass. The dependency not only deprives lower-income people of a future, it destroys the habits, attitudes and positive outlooks needed to get ahead in life. It takes what may have been a “run of bad luck,” as the president put it, and institutionalizes it into a debilitating way of life.

There are indeed income and social divisions in American society today, but they are driven not by a run-amok free-market economy. America’s falling score on The Heritage Foundation’s and The Wall Street Journal’s Index of Economic Freedom shows that the U.S. has steadily been moving away from free markets. In other words, there’s been more government intervention in recent years, not less. And yet the economy continues to flounder, and President Obama still insists we need more government to solve problems which government itself created.

We have economic problems to be sure, but when it comes to inequality, it’s not the free market, but the “culture, stupid.” It’s a yawning gap in habits, education and attitudes that underlay the divisions of rich and poor.

On the one side are wealthy Americans with Harvard MBAs and strenuously honed work ethics, many of them socially liberal and increasingly dependent in their businesses on government support. On the other side are low-income people who, regardless of race, find themselves without the skills, habits and education to get ahead. Some are stuck because they are too dependent on government benefits. But most are trapped by a culture that ignores the value of marriage and fails to teach the hard virtues of industriousness, discipline and personal responsibility.

The sad truth is this: If there are “two Americas,” it is a divide in economic opportunity caused largely by different cultures. Economic inequality is mainly the result of the “stickiness” (as Butler calls it) of cultural values determining the outcomes of economic behavior in America.

So to put the knockout game in perspective, it may or may not be true that the criminal perpetrators were denied economic opportunities. It’s no excuse even if they were. But if so, it is more likely the result of a dysfunction in values than anything else—the very anti-social attitudes which caused them to attack innocent people to begin with.

 - Kim R. Holmes is a Distinguished Fellow at The Heritage Foundation