Good point on inequality and education

Here’s Mark Perry, of Carpe Diem, regarding John Goodman’s post: If you really care about income inequality, you need only focus on one thing: the inequality of educational opportunity.

As Goodman puts it:

Poor kids are almost always enrolled in bad schools. Rich kids are almost always in good schools.

As they point out, the left seems more concerned with protecting teachers unions than providing quality education.

But, I think it’s worth pointing out that the blame of bad schools doesn’t fall only on the administrators and teachers, though they are partly to blame.

As one commenter on Mark Perry’s blog post pointed out, what do you think would happen if you switched the kids in the good schools with the kids in the bad schools? Do you think the reputation of the schools would remain intact? No.

I think it’s worth considering why that is. It’s not because of inequality. It’s because different people value education differently, just like any other product or service.

Even in a country that provides publicly for education, people still get to make choices based on a number of factors. Those who value education more tend to choose to live in areas where their neighbors value it as well. Those who don’t value education as much are left in the bad schools.

Charters a good way to give more choice to the people who do value education, but happen to be stuck in the areas where their neighbors don’t value it as much.

But, charters won’t convince those who don’t value it, to value it more.

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Sports Craze & False Choice

Redistribution based on income inequality is a false choice. The reasoning goes something like this:

  • There are wealthy people and poor people.
  • Ignore why they are that way. Like many poor people are just kids starting out and many wealthy people have worked hard and saved their whole lives.
  • Poor people place a higher value on an extra dollar than a rich person who already has plenty.
  • Ignore that the behavior of rich people and poor people do not support this claim, otherwise poor people may be more interested in doing things that can earn and save them more dollars.
  • Therefore, we should redistribute more dollars from the wealthy to the poor.
  • Ignore the already high rate at which this is done.

Why do we only focus on wealthy people in our redistribution schemes?

In my opinion, things mustn’t be too bad if we can afford to support a host of marginal men’s and women’s sports programs from grade school through college, where most people who participate — especially at the higher levels — have few prospects for continuing in those sports after they get past those supported programs, except maybe to teach the next generation of youth to take advantage of those programs or to tell their glory day stories in the break room.

How many poor people could have been helped with the taxpayer money that has been put into all sorts of sports projects? Locally, we have taxpayer-funded pro sports stadiums and amateur sports facilities. Apparently playing soccer on grass is just too hard. Spending millions on fake grass fields for pre-teens to hone their soccer skills is the new norm.

Why don’t we look at more of such things and say if we really take external approaches to helping those in poverty seriously, why don’t we cut out all this other stuff?

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Blackboard Economics e.g.

In this post on his blog, Arnold Kling links to a post from Daniel Little that says:

the idea that a properly functioning market economy will tend to reduce poverty and narrow the extremes of income inequality has been historically refuted — at least in the case of American capitalism.

Little provides supports this claim with two charts.

I think this is a good example of what Ronald Coase refers to as Blackboard Economics. That is, on paper, Little may be making a good point, but reality doesn’t support. Look out the window of real life and things are different.

Your wealth does not creat my poverty, part two

In the most recent EcontTalk podcast, host Russ Roberts interviews Steve Kaplan of the University of Chicago about income inequality.

I recommend it.

Early in the podcast, Roberts quips:

Recessions are bad for the rich. If you care about inequality per se, recessions are great.