Welfare is, and has always been, about promoting the welfare of children – not adults. The name of the US’s first nationwide program – Aid to Families with Dependent Children – says it all. It wasnt a program for poor people generally, but for poor families with children. Its predecessor – numerous smaller programs run at the state and county level, collectively referred to as “Mother’s Pension Programs” – also had the wellbeing of children – not mothers – as its central purpose.
For the past forty years, the American debate on welfare has lost sight of what should be its organizing principle: improving the lives of impoverished children. America never got past Reagan’s preoccupation with the “welfare queen.” Even the welfare reform signed into law by Bill Clinton was crafted without respect to what should have been its overarching priority. For decades American policymakers have been asking the wrong questions about AFDC, and its successor, TANF (Temporary Aid to Needy Families), as well as numerous other welfare programs, such as Medicaid and Food Stamps (SNAP).
When scrutinizing welfare programs, Americans have become overly concerned with what economists refer to as “the moral hazard problem.” Like any form of insurance, social insurance is expected to impact behavior. Without car insurance, for example, you would drive more carefully. Without homeowners insurance, you might never use your fireplace. Lacking health insurance, you might never ski. In the absence of unemployment insurance, you might deal with your boss more deferentially. And indeed, without welfare, poor people with children might be more inclined to work, or to put in longer hours at work. These are all instances of “moral hazard” – of people behaving differently because they have insurance.
Despite the moral hazard problem, we are almost always far better off with insurance than without it. It is the folly of conservatives to be preoccupied with the work ethic of poor mothers, who might take welfare as an opportunity to stay home and look after their children. They consistently fail to ask the most important question: whether welfare improves the lives of children.
At last, sanity is being restored to the welfare debate. This week, the New York Times ran an op-ed penned by the Chairman of the White House Council of Economic Advisers. He discusses, approvingly, several new lines of research that supply an empirical basis for the notion that welfare does indeed benefit children. The best and latest scholarship shows that welfare helps children live longer, healthier lives, obtain more years of education, and earn more. Welfare has a positive impact on such diverse phenomena as low-birth weight, high school and college completion rates, teenage mortality, standardized test scores and crime.
All along, the objective of welfare wasnt to make things easier for parents, but to alleviate the harm that poverty inflicts on children. It is encouraging to see this very basic insight embraced by the president’s chief economic adviser, and to see the welfare debate move back toward its proper area of concern.
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One hundred years ago, the US was in the early stages of its push to make high school universal and free. This policy was heavily criticized in Europe, where it was believed that high school was wasted on many – particularly on girls – and that most children should simply enter the workforce after 8th grade. The US did not relent, and high school graduation rates shot up from 5% in 1905 to reach 50% by 1940.
The experiment was a grand success. Economic historians attribute the superior expansion of the US economy in the 20th century to “the High School Movement,” which endowed the country with a far more educated labor force, allowing workers to learn new skills more easily, and thus move more readily between fields, as the US rapidly evolved into a complex, modern economy.
It took them awhile, but the rest of the world figured this out, and free, universal high school has become a commonplace. However many countries did not stop there, and now offer a free college education to qualifying students as well.
Following WW2, with the GI Bill, the US also started graduating many more young adults from college than any country in the world. But that competitive edge is rapidly disappearing. While the US is still at or near the top in college grads, a closer look at the data affords us a glance into the future. Among the older generation – men aged 55-65 – the US still has a far greater proportion of college grads than any country in the world. However among young people, particularly aged 25-35, the US has fallen behind many countries, and the trend lines are steep enough that the US may fall to the middle of the pack within a few decades.
The science of economics has improved much over the past 100 years. While the High School Movement required a giant leap of faith, economists today dont have to speculate on the value of a college education. It can be calculated by comparing the difference in wages between people with a college degree and people without one, controlling for as much as one can. The resulting value is the college wage premium. That premium is now higher in the US than in any developed country in the world, and the highest it’s been since the 1920s.
That enormous college wage premium is the voice of the labor market, shouting that it is so starved of highly-educated workers, that it is bidding their wages up to higher and higher levels. The message could not be any clearer: the US economy needs more college grads, needs them now, and will pay top dollar for them.
An excellent question to ask is why people arent responding to this signal and staying in school longer. The short answer is that education is one of those sectors that doesnt function very well within the free market system. That’s why governments, for centuries, have been in the education business. Public provision of pre-K and K-12 proceeds from the same logic as West Point and UCLA.
One can only wonder at how posterity will judge the US, which today has no federal public university system beyond its twenty-odd military schools. By comparison, many European countries have nationally-run and -funded public university systems. And so the Liberal Field Guide goes beyond President Obama’s call for free community colleges. The US Government should itself establish a system of Federal Universities, with a presence in all fifty states, and all major urban areas, and should offer a free four-year degree to any student meeting its admission standards.
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Government spending on health, education and insurance is the path to riches. And not one of many paths – if a nation isnt lucky enough to sit atop a fortune of mineral wealth, it’s the only pathway by which modern countries have ever grown rich. And there’s ample evidence that public investment in other sectors is a must for economic development too.
For conservatives, “Solyndra” has become the poster-child for the inevitability of failure whenever government wades into the marketplace. Mitt Romney wasnt content to mention Solyndra in every other speech – in May 2012, he journeyed to its Silicon Valley headquarters, to have the shuttered building in the background as he railed against the evil of public meddling in private enterprise. Solyndra’s failure was indeed spectacular – taking with it more than 500 million taxpayer dollars when it went bankrupt in 2011.
But in the three years since Solyndra’s bankruptcy, the government program that funded it has kept right on doing what it’s been doing all along: helping out young, green-energy firms going through rough patches. And a funny thing has happened: the numbers on the government’s balance sheet have gone from red to black. The Department of Energy, which administers the program, reports that they expect it to return a profit of some $5 to 6 billion over its lifetime, on investments totaling $32 billion. If you’re keeping score at home, that’s profits in excess of 10 Solyndras! And mind you: those are only the profits expected to accrue to the government itself, as it receives interest payments from companies paying back their loans. It does not begin to express the total economic value created for shareholders, or the green tech which will benefit all of humanity, or the tens of thousand of jobs that have been created at less-than-zero cost.
Government involvement in the marketplace has a long, storied past, in the US and abroad. Countries such as Singapore, Taiwan, South Korea and Israel – among the greatest exemplars of rapid economic growth of the past sixty years – all have had governments deeply involved in decisions on capital allocation. Government support has been indispensable to numerous industries throughout US history, from railroads and agriculture, to education and aviation, to the internet and drug research. Looking only at the iPhone, government investment facilitated advances in microchips, cellular, touch screens, GPS and voice-recognition – not to mention the $500,000 government-backed small-business loan that helped Apple get off the ground in 1978.
With her book, The Entrepreneurial State, Professor Mariana Mazzucato of Sussex University has emerged as an authority on the importance of public investment for economic growth. Simply put, companies are leery about long-term investments. Even guys like Steve Jobs knew how the game was played. Apple has done well tying together existing technologies into consumer-friendly packages – and is often more interested in stock buybacks than R&D. Their achievements are not to be downplayed – but the business model only succeeds with a robust public sector targeting certain industries and technologies for development.
Government isnt crowding out private investment – it’s picking up the slack in areas that private investors neglect. Companies tend to have short planning horizons when it comes to research and development. Even large companies who can afford long-term investments are rarely eager to test their shareholders’ patience with projects whose returns may take ten or fifteen years to realize. And the days of Bell Labs and Xerox PARC are also long gone – when tech firms collected scientists, and funded them in academic-like settings, content to wait and see what their research produced.
There will always be Solyndras. In new fields, failure always outnumbers success. But dont hesitate to let conservatives know that in the final accounting, the value of the Teslas outstrip the Solyndras by a wide margin – and always have.
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Once you agree that we’re able to identify economic sectors that are neglected by markets, and furthermore accept the government’s role in allocating resources into those sectors, you have subscribed to two of the most important tenets of socialism, and are left to figure out what kind of socialist you want to be.
Some roles of government are so ancient that people take them for granted. No one is regarded as a socialist for asserting that government should build bridges or maintain a fire and police department. However the economic logic of government activity in these areas is not terribly different from the logic behind public education – or public insurance. The distinction between a “capitalist” who supports the government’s role in education, infrastructure and public safety, and a “socialist” who additionally supports the government’s role in insurance is only a matter of degree.
When western societies started pooling resources to collectively educate children in the 18th century, socialism wasnt even a word. All but the most rabid conservatives accept that collecting taxes and spending them to educate children is a proper role for government. (Conservatives get hysterical over the federal government’s role in education.) Conservative acceptance of public education is as well their tacit acknowledgement of the failure of markets to fulfill the need.
It helps to be reminded of the chasm between “classical” economics and other economic models. Classical economics has it that markets are self-correcting and self-sustaining – that central planners cannot improve on a free market’s allocations. Anyone who accepts public education necessarily rejects classical economics – because if markets could not be improved upon by central planning, then public education would be unnecessary and wasteful – free markets would see to education privately, leaving no need for public schools.
But education markets suffer from several well-known problems. One is access to capital: a five year old cant go to the bank to secure a loan to pay for his education for the next 10 or 20 years. Even if he could, one’s own education is so rife in positive externalities, that it would suffer from chronic underinvestment. (The benefits of your education accrue significantly to other people – if you could somehow capture all of their benefit too, you would be willing to spend a lot more for your own education.) Parents who pay for their child’s education have the same externality problem.
Public education is a big ticket item, dramatically increasing the size of government. In the US, total annual government education spending on all levels will for the first time exceed $1 trillion in 2014. That’s 50% more than the government spends on defense – and almost as much as government spending on healthcare and pensions.
Once you accept our ability to identify failing market sectors, and subscribe in principle to the government’s ability to correct those failures through regulation or outright government provision, you open up the debate as to which market sectors need attention. Beyond education, infrastructure and security, perhaps the next most obvious market failure is insurance – and it’s no coincidence that governments worldwide have been in the insurance business for 150 years.
As conservatives mindlessly rail against government-provided health insurance as socialism, it’s amusing to chide them on their own socialist beliefs. But it’s no less heartening to appreciate the considerable common ground shared by Americans from both ends of the political spectrum.
Hailed as the most important Supreme Court case of the 20th century, Brown v. the Board of Education on its diamond anniversary is no more than a gorgeous corpse. Brown today prevents state and local governments from hanging a “colored only” sign on the schoolhouse door – unfortunately it allows them to do everything they need to do to produce precisely the same outcome, without need for the sign. Eviscerated by subsequent decisions, Brown’s awesome potential is unrealized, and unlikely to ever be, doing nothing for an increasing fraction of students who attend legally segregated schools across the US. The nation should end its sardonic celebration of Brown’s 60th, and be rededicated to the task of desegregation.
Brown invalidated the Jim Crow establishment of parallel white and colored schools, repudiating the infamous “separate but equal” doctrine with its overruling of Plessy v Ferguson (1896). Brown was truly a giant leap forward for the US, predating the Civil Rights Act by a decade. So it was for the Warren Court: ever on the vanguard, dragging a reluctant nation into modernity. But Earl Warren, the chief justice, author and architect of Brown‘s 9-0 decision, retired in 1969. Nixon replaced him and 3 other justices, setting the stage for Brown‘s demise.
While every schoolkid learns the historical significance of Brown, few are taught Millken v. Bradley, which in 1974 cut Brown off at the knees. Board of Ed. of Oklahoma City v. Dowell was a conservative Court’s 1991 coup de grace,* rendering Brown a nullity.
Milliken is a quintessentially cynical conservative decision, in which 5 justices feign ignorance to the most basic facts in order to arrive at an indefensible decision. Milliken‘s majority observed that neighborhoods can become segregated by socio-economic factors. School districts in such neighborhoods, they explain, can as a consequence become segregated without any action on the part of the government. And thus may poor black neighborhoods beget poor black schools, and rich white neighborhoods beget rich white schools – and Brown, those 5 conservatives pronounced, has nothing to say about that. “Segregation is dead – long live segregation, y’all,” – their holding might well have been
Justice William O. Douglas takes Milliken‘s shiftless majority to task in a dissent that expounds the obvious: where school district lines are drawn and whether they get redrawn; where schools are erected; where municipal lines begin and end; where public housing projects are put up; and nearly every factor that integrates or segregates a given community’s public schools is determined by the government. The government’s decision to countenance racially segregated schools, rather than working to integrate them, is precisely that: a government decision. The Milliken majority acknowledges that where Detroit meets its suburbs there’s a line in the dirt, and the black kids on one side get routed into poor black schools, while white kids on the other side get routed into well-funded white schools. At this point the majority pretends to not grasp the obvious fact that the government chooses where that line is drawn, and whether it is redrawn to integrate schools, as Brown commands, or left alone.
5 conservative justices finished Brown off in its 1991 Oklahoma City decision. Oklahoma has among the most egregious records on segregation. The cordoning off of black kids into black-only schools was written into the state constitution from the day Oklahoma achieved statehood in 1907. Despite Brown, the Civil Rights Act, and an 11 year federal court battle, Oklahoma City schools were still segregated in 1972. Finally a new plan was implemented – and it worked: in 1977, a federal judge declared Oklahoma City schools to be integrated – 23 years after Brown!
But just 8 years later, Oklahoma City enacted a different plan to allocate students – and by 1989, its schools were segregated again. When plaintiffs sought to reopen the federal case that ended 70 years of Oklahoma City school segregation, 5 conservatives on the Supreme Court slammed shut the courthouse door. Never mind those 70 years, this conservative majority argued, asking us to believe that this more recent variety of segregation is the permissible Milliken kind, driven by economic decisions by private citizens. A mere 10 years of desegregation in the preceding 80 had miraculously turned Oklahoma into Massachusetts. Segregation is dead – long live segregation.
Justice Thurgood Marshall, who argued Brown before the Court in 1954, took on the Oklahoma City majority in his pointed dissent. The effect of Oklahoma City is to allow miscreant school districts – who were once subject to a desegregation order, and who subsequently satisfied that order by integrating – to backslide into segregation again by “private economic decisions” – and then when they get sued, they can hide behind Milliken, throw up their hands, and claim that this “new” segregation is not the result of government action. Long live segregation, y’all!
Milliken made sure that Brown could not apply outside of the south, allowing states like New York and California to have some of the most segregated school systems today. Oklahoma City next gave southern school districts the opportunity to be treated like New York and California – they need only desegregate for a few years, after which they can return to segregated business as usual.
Yeah I know it sucks – sorry to be the bearer of bad news – but Brown, in many respects now does more harm than good. Ironically, Plessy v. Ferguson might produce better results today, since it requires EQUAL to go along with separate. Brown, twisted from its original meaning by 40 years of conservative jurisprudence, is now the facilitator and protector of a system of separate and unequal schools across the country.
* CT kindly requests that all world citizens, francophonic or otherwise, enunciate the final c in “coup de grace.” Failure to do so results in “coup de gras”, which – though it may be poetically construed as a drink on Fat Tuesday, or, more farfetched, a judo move involving the buttocks – is unbearably grotesque in ears of a certain stripe. Grazi-yay a todo.
Who has the most racially segregated schools in the US? According to a new report out of UCLA, that distinction falls on New York State. The roots of New York’s segregation go back to a 1974 Supreme Court decision that isnt as infamous as it should be. In Milliken v. Bradley, 5 justices decided that there were really 2 kinds of school segregation. New York’s, as you might guess, is the legal kind – though both kinds suck separately, equally and spectacularly.
The illegal kind of segregation happens when a school board official sits down at a map, and with evil intent sketches out school districts that keep blacks with blacks and whites with whites. This is “de jure” segregation. After review, a Federal Judge will send the miscreant back to his map, with instructions that he sketch out nicely-integrated school districts. He does, the Judge signs off, and life goes on, desegregated.
Years pass and some neighborhoods do better than others. Affluent people buy into better school districts. Poor people get displaced by higher property values, and get pushed into inferior school districts. Since there’s a wide disparity in the US between incomes of whites, blacks and hispanics – and persistent discrimination among landlords, realtors, and other private parties – the result is a return to racially segregated schools. And since schools across the US tend to be locally funded, you dont just get segregated public schools – you get poor minority kids in underfunded schools, and middle-class white kids in well-funded schools.
The kicker comes when the next-generation public school board official gets his arsenio hauled into Federal Court – only to receive a pat on the head. Because y’see this kind of segregation, which just kinda sorta happened (wink wink), is called “de facto” segregation – and it’s been legal as pie since 1974. Under Milliken, a Federal Judge cant force state officials to throw out the old districting map simply because it results in segregated schools. If there were no evil intent when the districts were drawn, the state can kick back and enjoy its aparteid-by-omission. While school board officials arent allowed to create segregated districts with their pencils – they arent required to undo them with their erasers.
The Milliken case came out of Detroit, where poor, black, city school districts abutted affluent, white, suburban school districts. “Milliken” was himself the governor of Michigan – sued by Detroit residents who objected to the state’s school-districting scheme because, by following existing municipal boundaries, it resulted in deeply segregated schools. The plaintiffs argued that the distinction between “Detroit” and “Suburb” was just a line in the dirt – that the state was required to cure racial segregation, or run afoul of Brown v. the Board of Education‘s holding that “in the field of public education, the doctrine of ‘separate but equal’ has no place. Separate educational facilities are inherently unequal.” The lower court agreed with plaintiffs, and ordered that city and suburban districts be integrated across the city line.
The Supreme Court disagreed. Chief Justice Burger wrote, “The target of the Brown holding was clear and forthright: the elimination of state-mandated or deliberately maintained dual school systems with certain schools for Negro pupils and others for white pupils.” (Emphasis supplied.) Burger conveniently overlooked another passage from Brown: “Does segregation of children in public schools solely on the basis of race… deprive the children of the minority group of equal educational opportunities? We believe that it does.” The modifiers “state-mandated” and “deliberately maintained” arent there. The distinction between “de jure” and “de facto” segregation isnt there. Under Brown, there was just one kind of segregation: the illegal kind.
Milliken went beyond merely undercutting Brown – it managed to undercut the most infamous case in US history, Plessy v Ferguson, which in 1896 validated the doctrine of separate-but-equal. Milliken succeeded in validating separate-but-UNEQUAL – a step backward from, and more regressive than the Jim Crow South.
In Milliken, the Supreme Court reversed the decision of the lower federal court, which would have required the state to seek an “area-wide” plan to cure segregation, rather than relying on a “city-wide” plan. The lower court’s eminently sensible solution to the segregation problem would have moved some city kids into schools in the suburbs, and some suburban kids into schools in the city. The distances were modest – this “area-wide” plan generally had kids traveling shorter distances than the “city-wde” plan. But the Supreme Court decided there was no problem at all, because “There were no findings that the differing racial composition between schools in the city and in the outlying suburbs was caused by official activity of any sort.” Thus the holding of Millken is “Segregation Happens” (with a shrug). Hey, wuddyagonnado….
Justice William O. Douglas – the same guy who gave every American a right to privacy back in 1965 – wrote a brilliant dissent, which we can only hope will become law one day. Douglas is among the most gifted writers the Court ever had, with an exceptional talent for nailing down knotty issues in a few tight paragraphs. You dont have to be a lawyer to enjoy Douglas at his best – though suffering through a few of Kennedy’s or O’Connor’s mangled texts helps speed the appreciation. A link to his full dissent is given below, and it’s worth reading in its entirety. Unable to improve on his eloquence, Douglas closes here, his thoughts as apropos of 1974 Detroit as they are of 2014 New York:
“Today’s decision… means that there is no violation of the Equal Protection Clause though the schools are segregated by race and though the black schools are not only “separate” but “inferior.” So far as equal protection is concerned, we are now in a dramatic retreat from the 7-to-1 decision in 1896 that blacks could be segregated in public facilities, provided they received equal treatment.
“There is, so far as the school cases go, no constitutional difference between de facto and de jure segregation. Each school board performs state action for Fourteenth Amendment purposes when it draws the lines that confine it to a given area, when it builds schools at particular sites, or when it allocates students. The creation of the school districts in Metropolitan Detroit either maintained existing segregation or caused additional segregation. Restrictive covenants maintained by state action or inaction build black ghettos. It is state action when public funds are dispensed by housing agencies to build racial ghettos. Where a community is racially mixed and school authorities segregate schools, or assign black teachers to black schools or close schools in fringe areas and build new schools in black areas and in more distant white areas, the State creates and nurtures a segregated school system just as surely as did those States involved in Brown v. Board of Education when they maintained dual school systems.
“The issue is not whether there should be racial balance, but whether the State’s use of various devices that end up with black schools and white schools brought the Equal Protection Clause into effect. Given the State’s control over the educational system in Michigan, the fact that the black schools are in one district and the white schools are in another is not controlling — either constitutionally or equitably…. It is conceivable that ghettos develop on their own, without any hint of state action. But since Michigan, by one device or another, has, over the years, created black school districts and white school districts, the task of equity is to provide a unitary system for the affected area where, as here, the State washes its hands of its own creations.”
Douglas’s dissent: http://supreme.justia.com/cases/federal/us/418/717/case.html#757 (you have to scroll down a little bit – it begins just below “MR. JUSTICE DOUGLAS, dissenting”)
full text of Milliken: http://supreme.justia.com/cases/federal/us/418/717/
full text of Brown: http://supreme.justia.com/cases/federal/us/347/483/case.html
bonus material: http://en.wikipedia.org/wiki/Griswold_v._Connecticut
Inequality begins with poverty, and is perpetuated by underinvestment in education, health and social insurance. One in four American children are born into a poverty that’s deeper and harder to escape than poverty in other western countries. They arrive to public school at age five or six as damaged goods – one can hardly expect any public school system to reverse the harm done, no matter the budget. The US spends a lot on education – but like healthcare, education spending is tilted toward the heroic, not the fundamental: America is the land of elite $50k/year universities – and of failing elementaries and high schools.
Top universities like Harvard operate like modeling agencies: they only want you if you’re pretty. By comparison, the Marines Corps believes that it can take anyone and turn him/her into a Marine. Americans so thoroughly accept the distinct roles of public and elite schools, that they hardly give it a thought. The best American universities – public and private both – run like modeling agencies, admitting only the best of the best, and rejecting the rest. But at the same time Americans expect their public elementaries and high schools to function like the Marine Corps, and turn out disciplined, literate and numerate young people, no matter their circumstances when they enter.
We already know that poor children are different from other children in real, observable ways. Being in poverty as a child has long-lasting negative health and income effects, and the differences even show up in brain scans. Poor kids arrive to kindergarten with all-but insurmountable deficits. If public schools are to be effective, they have to take kids at a younger age. By beginning public school at age three or four – adding pre-K, and even pre-pre-K – and guaranteeing at least 2 quality meals per day, 5 days per week over what should be a 200 day school year – the public will have the opportunity to invest in all of our children at a critical, formative age, so that when they get to kindergarten, they arrive ready to learn.
Head Start, America’s most famous pre-K program, has had fantastic results. When Head Start kids become young adults, they are more likely to finish high school, begin college and go to work – and less likely to become teen parents. They’re also healthier. This should be the model for a nationwide public pre-K system – this is how America can escape its cycle of poverty and inequality. By giving every child the means to reach their full potential, America can live up to its meritocratic ideals. Its self-image notwithstanding, America today is the least meritocratic country in the West. An American child’s destiny lies not in his talents, but in the circumstances of his birth. This isnt surprising, given the vast disparity in health and education resources available to different American children, depending on who they were born to, not on their innate talents.
While investing in public pre-K now, the US should follow up with free public community colleges at the other end. It is an embarrassment that America’s only federal universities are military schools. The federal government might lead by example and create a federal college system that’s free to anyone who passes an entrance exam. The exam can itself be a tool for maintaining high school standards. Alternatively/additionally the federal government could provide aid and offsets to reduce the cost of locally-based tertiary education to zero.
For decades, each successive American generation had far more education than generations past. But that trend ended abruptly around 1970, after which American education-levels flat-lined, and inequality exploded. Jump-starting growth in American education – both at the front and back end – is the key to future prosperity, to break America out of its funk.