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Success Measured by Intentions Rather Than Results

William McGurn writes The Poverty Preening of Professor Obama in The Wall Street Journal:


Now, leave aside the argument of whether poverty owes more to a lack of government spending or to family structure and other social breakdowns. Truth is, it’s simply false to say that Republicans won’t make the public “investments” needed to help the poor.

In New York in the 1990s, for example, Republican Mayor Rudy Giuliani not only invested in the police but sent them into the areas where they were most needed—primarily poor and minority neighborhoods. In too many other Democratic cities, by contrast, mayors in effect cede whole neighborhoods to the thugs and gangs.

Republicans are also willing to spend on education. What they are not willing to do is dump ever more dollars down the same rathole of big-city public school systems that function more as jobs programs for city bureaucrats and members of the teachers unions.

While we’re on the subject, note that it is the president who has tried to kill the Opportunity Scholarship program that gives poor parents in the District of Columbia the opportunity to send their children to schools such as the one where he and Michelle Obama send their own kids, the exclusive private school Sidwell Friends. Meanwhile, it is Republican John Boehner who has kept the program and public funding in place for those children who need it.

Mr. Brooks gamely tried to push back on the progressive pieties, arguing that antipoverty programs need to get past treating the poor as liabilities to be managed and start looking at poor men and women as untapped human capital. He further noted how it is the poor who suffer most when we measure programs by intentions rather than results. It would have been instructive to hear the president and Mr. Putnam explain if there is any metric they might embrace in place of what seems to be the one-size-fits-all liberal answer to any failed government anti-poverty program: increase spending.

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Free Markets are Not Irrational

from Bernie Sanders’s Dark Age Economics by Kevin Williamson in The National Review


It is a facet of the belief that free markets are irrational, and that if reason could be imposed on markets — which is to say, if reason could be imposed on free human beings — then enlightened planners could ensure that resources are directed toward their best use. This line of thinking historically has led to concentration camps, gulags, firing squads, purges, and the like, for a few reasons: The first is that free markets are not irrational; they are a reflection of what people actually value at a particular time relative to the other things that they might also value. Real people simply want things that are different from what the planners want them to want, a predicament that can be solved only through violence and the threat of violence. That is the first reason that this sort of planning leads to gulags. The second is that there are no enlightened planners; men such as Senator Sanders imagine themselves to be candidates for enlightened leadership, but put a whip in his hand and the gentleman from Vermont will turn out to be another thug in the long line of thugs who have cleaved to his faith. The third reason that this sort of planning always works out poorly is that nobody knows what the best use of resources actually is; all that the would-be masters know is that they do not approve of the current deployment of resources.

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Growth is Not So Easy to Measure

Martin Feldstein writes The U.S. Underestimates Growth in The Wall Street Journal:

Government statisticians are supposed to measure price inflation and real growth. Which means that, with millions of new and rapidly changing products and services, they are supposed to assess whether $1,000 spent on the goods and services available today provides more “value” or “satisfaction” to American consumers than $1,000 spent a year ago. Even more difficult, they are tasked with estimating exactly how much it costs now to buy the same quantity of “value” or “satisfaction” that $1,000 could buy a year ago.

These tasks are virtually impossible, and the problem begins at the beginning—when an army of shoppers go around the country at the government’s behest to sample the prices of different goods and services. Does a restaurant meal with a higher price tag than a year ago reflect a higher cost for buying the same food and service, or does the higher price reflect better food and better service? Or what combination of the two? Or consider the higher price of a day of hospital care. How much of that higher price reflects improved diagnosis and more effective treatment? And what about valuing all the improved electronic forms of communication and entertainment that fill the daily lives of most people?

In short, there is no way to know how much of each measured price increase reflects quality improvements and how much is a pure price increase. Yet the answers that come out of this process are reflected in the consumer-price index and in the government’s measures of real growth.


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Asking the Right Questions

from the excellent blog, Cafe Hayek, Don Boudreaux posts Good Economists Ask Questions Such As These


As I argued in this earlier post, to do good economics is chiefly to ask the right questions.  The good economist is an incessant questioner; the good economist is neither blinded nor numbed by the popularity of familiar mantras or presumptions into accepting these mantras and presumptions as being valid.  Even if there is no specific answer to a probing question asked by a good economist, the asking of the question itself often serves to demolish the weak base of implicit assumptions and poor logic upon which arguments and assertions about the operation of the economy, and about the likely consequences of government interventions, are too often constructed.

Here’s a good example of a popular claim about the operation of the economy that is exposed as highly dubious by the asking of some very simple and straightforward questions.  The example comes from a recent New York Timeseditorial praising the Los Angeles city government’s action to raised the minimum-wage in that city eventually to $15 per hour:

Workers’ share of the economic pie has been shrinking for decades, as the gains from labor productivity have flowed increasingly to profits rather than pay.

Overlook the questionable (!) description of the economy as a “pie” (with its childishly mistaken implication that more ‘pie’ for some people necessarily means less ‘pie’ for others).  Overlook also the fact that it’s not at all a settled matter that workers’ pay has failed to keep pace with improvements in labor productivity.  Instead, ask: If it’s true that profits have been swelling for the past few decades because wages haven’t kept up with labor productivity, why are these profits not attracting even more firms in to the markets where these excess profits exist and persist?

– Or, alternatively, are there barriers that have arisen over the past few decades that prevent profit-hungry entrepreneurs and investors from diving in to try to grab some of these excess profits?

– Even if the U.S. is so bereft of new able and profit-hungry entrepreneurs, or if effective barriers to their entry into markets do exist, what’s with existing and successful entrepreneurs, businesses, and investors?  Why do they not compete amongst themselves to bid up workers’ wages, thus causing wages  to reflect workers’ improved productivity?  Are all existing entrepreneurs, businesses, and investors, while shameless at exploiting their current workers, unwilling to exploit workers even more fully by each trying to hire other firms’ underpaid workers?


The media pundits report to a narrative and either because of bias or ignorance allow false statements to escape simple scrutiny.

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Poverty Pathology


From Townhall Walter Williams writes The True Black Tragedy


Today the overwhelming majority of black children are raised in single female-headed families. As early as the 1880s, three-quarters of black families were two-parent. In 1925 New York City, 85 percent of black families were two-parent. One study of 19th-century slave families found that in up to three-fourths of the families, all the children had the same mother and father.

Today’s black illegitimacy rate of nearly 75 percent is also entirely new. In 1940, black illegitimacy stood at 14 percent. It had risen to 25 percent by 1965, when Daniel Patrick Moynihan wrote “The Negro Family: The Case for National Action” and was widely condemned as a racist. By 1980, the black illegitimacy rate had more than doubled, to 56 percent, and it has been growing since. Both during slavery and as late as 1920, a teenage girl raising a child without a man present was rare among blacks.

Much of today’s pathology seen among many blacks is an outgrowth of the welfare state that has made self-destructive behavior less costly for the individual. Having children without the benefit of marriage is less burdensome if the mother receives housing subsidies, welfare payments and food stamps. Plus, the social stigma associated with unwed motherhood has vanished. Female-headed households, whether black or white, are a ticket for dependency and all of its associated problems. Ignored in all discussions is the fact that the poverty rate among black married couples has been in single digits since 1994.


“The road to hell is paved with good intentions.”  It is hard to visualize  this trend being reversed without a form of moral preening from the government that few voters today would ever tolerate.