If you really cared about income inequality, you’d be interested in these questions

There’s a lot of noise about stagnating income for the lower classes and income inequality, with strong desires to use government to fix these problems.

Something occurred to me as I was reading Alan Reynold’s excellent Wall Street Journal piece discussing some of the problems with such data, problems that those pushing the stagnating message don’t seem willing to address.

But let’s ignore the data problems for now and give them the benefit of the doubt.

Many government programs — Federal, state and local — intended to reduce poverty and reduce inequality have been put in place and ballooned over the very time frame that the income inequality groups squawk about.

One question they don’t seem interested in asking or answering is: Why haven’t these programs worked?

“More” seems to be the only thing they are interested in.

Another question that might be worth asking is: Have some of these programs caused the problems?

That they are unwilling to consider these questions reveals something that I find disturbing, so disturbing that it caused me to question my liberalness when I was young: they do not care about works and what doesn’t work for the people they purport to want to help. They only care about what makes them look good to the people they wish to identify with and what will get them votes from the same.

Your imagination is fallible

Don Boudreaux at Cafe Hayek responds to someone who

“simply can’t imagine” that raising the minimum wage by $2.85 [per hour]… “will trigger businesses to hire less workers.”

I’ve been amazed over the years at how many form their opinion solely only at what they can or cannot imagine in the moment.

Have they never had experiences where reality turned out differently from what they imagined?

Have they considered that they may simply lack imagination?

Have they considered that it is difficult to imagine what business owners will do when you are not a business owner?

Even if you are a business owner, it can be difficult to imagine what you will do when faced with changes to your business. You can easily say what you think you would do, but then do something entirely differently when faced with the actual costs and benefits and not even realize it.

Signals v Causes: BINGO!

I’ve written about this a number of times myself, so it’s good to see when others, with better qualifications, agree.

I recommend reading The disease that is government by Antony Davies and James Harrigan in the Pittsburgh Tribune (HT: Mark Perry, Carpe Diem).

An excerpt:

We don’t expect our elected leaders to never make mistakes. But is it asking too much that they learn from them?
Getting the causality backward, government acted as if home ownership caused success.

Getting the causality backward again, government acts as if a college degree causes, rather than results from, success.

They write about how getting the causality in these situations backwards leads to bad policies, like distorting the incentives to encourage irresponsible people to wind up owning homes, by backing bad debt that results from lowering the credit standards for loans in the name of ‘spreading the American Dream of home ownership,” for example.

But, home ownership doesn’t cause responsible behavior, it is a result of responsible behavior — including scrapping to save a down payment and establishing a good income and credit history by being dependable and productive.

Do you want more people to own a home? Encourage these behaviors, instead of distorting the incentives so that these behaviors matter less. These behaviors are the real causes of success, not the home ownership itself.

A college degree isn’t a cause of success, it results from the behaviors that cause success (or used to) — everything from scrapping to pay for tuition, to studying instead of partying and being able to demonstrate your mastery of the material.

Do you want more people to get a college degree? Encourage these behaviors, don’t distort the incentives so that these behaviors matter less. These are the real causes of the success we see in the ‘college earnings premium’, not the college degree itself.

No duh

Two charts posted in this article at Vox “reveal” something most anyone can guess: poorer folks spend more on rent and more of their income on necessities, while wealthier folks spend more on mortgage interest and more of their income on luxuries.

What happens to things that are too big to fail?

One good rule to keep in mind from Peggy Noonan’s Wall Street Journal column contrasting Bob Simon and Brian Williams:

Things that are too big to fail, fail.


In another WSJ opinion column on the subject of Williams, Peter Kann wrote:

In part Mr. Williams is symptomatic of larger social trends where traditional virtues like modesty and privacy have given way to the spotlight of self-promotion, where even lives too pedestrian for the paparazzi become an endless series of selfies. But, lest we descend too deeply into pop psychology, the larger blame belongs with Mr. Williams himself and the hubris of an anchorman who lacked the anchor of common sense and self-restraint.

I like how he mentions the larger ‘selfie’ trend, but still doesn’t let up on Williams’ personal responsibility in the matter.

If you really care about the poor, wouldn’t you consider that you may be wrong?

I recommend reading Dan Mitchell’s column, If We Care about the Less Fortunate, Focus on Growth Rather than Redistribution.

He writes:

If we get robust growth, that will mean tight labor markets, and that’s a big cause of rising wages.

But here’s my hypothesis to explain why statists don’t support good policies. Simply stated, I think they hate the rich more than they like the poor.

One thing that caused me to evolve away from my liberal roots is that it occurred to me one day to ask myself, What if the policies I support hurts the people that I want to help? Shouldn’t I at least consider that possibility if helping them is what I really want?

I think Mitchell makes an important point. As I opened myself to learning how such policies backfire, one barrier in my transition was the animosity I had toward ‘the rich.’ Not the rich that I knew, who I knew worked hard to earn what they had, but the faceless ‘rich’ that had been portrayed as always just wanting to tilt to the advantages in their favor and exploit the poor.

When I started bringing up points for my friends and family to consider, I caught lots of flak, in conversations that went something like this:

Me: “Maybe rent control does limit the supply for housing, making it tough for people — including the poor — to find a place to live.”

Others: “Oh well, I see you are starting to side with the slum lords now who just want to be able to gouge the poor!”

“Free and Universal Education”

Here’s a good read from Walter Williams: Tragic School Stories. In it, he writes about a book written by public high school teacher Linda Ball, called 185 Days: School Stories.

Williams references a couple of Ball’s days in school:

On Day 167, Mrs. Ball ordered a student to the in-school discipline room for disruption and being in her class without permission. When the student finally decided to leave the room, he told her, “F— you,” and then he swatted her on the head with some papers. In her Day 10 section, there’s a brief story about how respect is earned. Wesley, a student with an IQ of 140, did an outstanding job on a paper about the Enlightenment but completed only half his assignment and earned an F. Jake, a student repeating her class, told Wesley, “I have new found respect for you today.” Failure earns respect.

One theme Williams writes about: Not enough resources for education is not the problem. The problems are that some people do not value education, teachers have no power to hold students accountable for learning (or for maintaining safe and respectable behavior in the classroom) and students can get diplomas without earning them.

Another theme: What are often seen as racial disparities in society are really educational disparities, and not disparities in the education that was provided, but in the education that the person chose to receive.

In other words, is it surprising that a person who has mastered the 12th grade is more desirable of an employee than one who earned respect from peers in school by failing to do the assignments?

Something strikes me as odd though. Near the end, Williams wrote:

The bottom line is that if nothing is done to affect the home life and cultural values that produce the non-learning attitudes and climate that are the subject of Linda Ball’s “185 Days: School Stories,” there’s little that can be done to improve black education. The best that politicians can do is to give parents and children who are serious about education a mechanism to opt out of rotten schools. That option is something the education establishment fights tooth and nail against.

I wonder why that is. Why is it that a teacher’s union that has its members in situations that Linda Ball describes in her book isn’t more open to changing the system too allow them more power to hold students accountable and award degrees only to those who earned them.