You Get What You Incent

Most parents learn this the hard way with their children.

Those in government sometimes learn it. It seems this former administrator of New York City’s welfare program, Robert Doar, gets it, too, as evidenced by his piece in the Wall Street Journal.

He writes:

I am not an economist, but one likely reason for the dismal labor-force participation is that many U.S. assistance programs act more like work replacements than work supports.

Consider the 45 million recipients of food stamps. While touring the country with the National Commission on Hunger, I often heard from recipients that the Supplemental Nutrition Assistance Program was good at providing electronic-benefit transfer cards, but not so effective at helping them get a job.

Thomas Sowell

Mark Perry about Thomas Sowell:

…there is no economist alive today who has done more to eloquently, articulately, and persuasively advance the principles of economic freedom, limited government, individual liberty, and a free society..

I agree. Perry’s post contains 16 (or is it 15?) of his favorite Sowell quotes that are worth a read.  Here’s a good one:

Helping the Poor. It was Thomas Edison who brought us electricity, not the Sierra Club. It was the Wright brothers who got us off the ground, not the Federal Aviation Administration. It was Henry Ford who ended the isolation of millions of Americans by making the automobile affordable, not Ralph Nader.

Those who have helped the poor the most have not been those who have gone around loudly expressing “compassion” for the poor, but those who found ways to make industry more productive and distribution more efficient, so that the poor of today can afford things that the affluent of yesterday could only dream about.

I think society would be better off if Sowell’s Basic Economics was used as the text for Econ 101. Maybe I should start a petition or something.

Get a book by Thomas Sowell now and read it. I think of this one often: White Liberals and Black Rednecks.

Overconfidence in opinions

This example occurred to me on a recent jog.

A woman was jogging on the sidewalk on the other side of the street from me. We were both running in the same direction.

She was ahead of me. I caught up to to her. She kept my pace for a few hundred yards, then she slowed down and I passed her.

Later I turned to see where she was. She had crossed the street to my sidewalk, but was a good distance behind me.

I thought to myself, maybe she thinks my side of the road is faster.

Then I thought, if I told the story just like that, most people would discount that immediately as a case of mistaken cause.

They may think, no you left her behind because you’re faster. How dumb is it to think you can get faster simply by running on your sidewalk?

I thought to myself that would be a great example of how something that sounds dumb, could make sense with a wee bit more information.

It’s winter. There’s snow and ice on the ground. My side of the road had seen more sun which had melted the snow and ice off my sidewalk. Her side of the road still had patches of snow and ice because it was shaded from the sun by embankments and trees.

So, indeed, she did get faster simply by crossing the street.

This example reminds of many conversations I’ve had over the years where a person forms an opinion and doesn’t budge. They believe they have all the information they need and stick to their guns.

But, if they were just a bit more imaginative or open to other bits of information, maybe they wouldn’t be so married to their opinions.

Preparation is key #2

From How Colleges Make Racial Disparities Worse by Richard Sander in the Wall Street Journal (I added the bold):

Supreme Court Justice Antonin Scalia ignited a firestorm last week at oral arguments forFisher v. University of Texas, a case concerning that school’s affirmative-action policies. The media pounced after Justice Scalia suggested that it might be not be a bad thing if fewer African-Americans were admitted to the University of Texas. Many rushed to call the comments racist.

Subsequent reports clarified that Mr. Scalia had been invoking the “mismatch” hypothesis, which posits that students who receive large admissions preferences—and who therefore attend a school that they wouldn’t have gotten into otherwise—often end up hurt by the academic gap between them and their college peers. But on the whole even this coverage has spread confusion.

The mismatch theory is not about race. It is about admissions preferences, full stop. Mismatch can affect students who receive preferential admission based on athletic prowess, low socioeconomic status, or alumni parents. An important finding of mismatch research is that when one controls for the effect of admissions preferences, racial differences in college performance largely disappear. Far from stigmatizing minorities, mismatch places the responsibility for otherwise hard-to-explain racial gaps not on the students, but on the administrators who put them in classrooms above their qualifications.

Re: first passage in bold: As I mentioned in this post, preferential treatment can hurt anyone, it doesn’t depend on race.

Re: second passage in bold: If true, why isn’t that persuasive for folks who advocate watering down admissions, rather than bolstering preparation?

This also supports my hypothesis for #2 from this post. An author at fivethirtyeight.com thought that, “Top private colleges, though they enroll fewer black students, do a somewhat better job of helping them graduate.” I thought, perhaps, top private colleges just do a better job of admitting those who are properly prepared.

Matt Ridley on the Chan-Zuckerberg Initiative

Matt Ridley regarding Zuckerberg and Chan’s gift.

Yep, I agree. And it’s interesting to see more info about some of the ideas Zuckerberg/Chan have in Ridley’s post. Like:

Zuckerberg thinks that “the only way to achieve our full potential is to channel the talents, ideas and contributions of every person in the world”. To that end he wants to get the four billion people who do not have access to the internet online. Through “internet.org” he is trying to find ways to use solar-powered drones flying at 60,000 feet and equipped with infra-red lasers to bring the internet to remote parts of the developing world where they could give farmers weather forecasts and crucial market information, plus a chance to educate their children.

Nice.

Ridley also makes an important point about charitable foundations:

Yet most foundations start out effective and gradually become captured by political correctness and vested interests. The Rockefeller Foundation did a truly brilliant thing in the mid-20th century when it supported Norman Borlaug’s tireless efforts to breed high-yielding varieties of wheat in Mexico and then to get them adopted in India and Pakistan, thus sparking the “green revolution” that has brought billions out of hunger. Later in the century, it succumbed to fashionable dictums and failed to back Borlaug’s attempt to do the same for Africa, arguing that high-yielding crops might be bad for the environment. (Recently it has reversed again and joined the Gates Foundation in supporting agriculture in Africa.)

With this sort of history, it is little wonder that the young Zuckerbergs want to retain flexibility in deciding how their Chan-Zuckerberg initiative does good work.

He made a similar point about companies and countries in his book, The Rational Optimist. I wrote about that here and here.

Drugs and crazy?

What’s the cause of the relative recent increase in mass killings?

So far I’ve seen people name likely causes such as inequality, riot dynamics, guns, media, killings by cops and so forth.

I haven’t yet seen mention of prescription meds and reduction of mental institutions.

I believe I just saw on 60 Minutes last night that prescriptions for opioid-based medication has increased from several million in 1990 to over 200 million now. 200 million! 2/3rds of the country? Really?

I’d like to see some stats on crazy people. Seems like they used to get extended stays in mental institutions at a higher rate in the old days, but for lots of reasons (like mistreatment, funding and believing that crazy can get less crazy) that doesn’t happen as much anymore.

If you look at the mass killers, it does seem as though they are not of sound mind and I don’t find it plausible that inequality (or any of the other factors mentioned) caused them to lose their marbles.

Preparation is key

In Scalia Was Right About Race Preferences in the Wall Street Journal, Jason Riley writes (emphasis added):

During oral arguments in Fisher v. University of Texas at Austin, a case concerning race-conscious college admission policies, Justice Scalia cited research that shows how racial preferences can handicap some black students by placing them in elite schools where they don’t have the same credentials of the average student and struggle academically.

Liberal public figures and media types promptly denounced the remarks. Democratic leader Harry Reid, ever the statesman, stood on the Senate floor Thursday and accused Justice Scalia of endorsing “racist theories.”

We live in a political environment where the intent of a policy aimed at helping minorities is all that matters; questioning the policy’s actual effectiveness is tantamount to racism. Our national debates about racial preferences tend to focus on their legality, not whether they work as intended. Yet both are important, and Justice Scalia is right to question the assumption that racial favoritism in college admissions has been a boon for blacks.

I’d add that is true of anyone given preferential treatment to be admitted to an elite school, or any school.

Certainly, when thrown into the fire, some people blossom and manage to overcome the ill preparation they received (incidentally often from the same people who advocate lower admission standards).

But, they could also blossom in the a second tier school and earn their way into an elite school.

If the desire is to get more of any group of people into selective schools, maybe the focus should be on properly preparing members of that group to be successful in those schools, rather than lowering the bar for them to get in and hoping they catch up to those who were prepared.

What would happen if pro and college sports teams lowered their standards to accept players of lower ability? Very few, if any, of the new athletes let onto those team would excel to the top. And, nobody would (does) buy tickets to watch adult rec league games.

But, lots of athletes could fulfill their dream of being a pro, for a short time, before the leagues go out of business.