As my interests have evolved from economics to ethics and Christianity, I’ve decided to launch a new blog. It is called Gentle Respect - a gentle defense of a Christian worldview.
I’ll still talk about economics - the welfare state does not work - but the emphasis is changing.
Thanks for reading!
Many progressive arguments that attribute poverty to factors other than out of wedlock childbirths can be refuted with the following two data points: (1) the success of immigrants, who frequently live in the same neighborhoods and go to the same schools, but find success in America, and (2) the fact that out of wedlock childbirths were much lower during the Great Depression (see this link for a graph), when economic times were much worse than they are today. This makes it unlikely that economics is a major factor in causing out of wedlock childbirths.
A final point that should be emphasized is that out of wedlock childbirths cause more than poverty, but they also cause a wide array of other social problems including substance abuse and problems in school.
Now onto the detailed responses to progressive arguments.
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Robert Whaples surveys PhD members of the American Economic Association and finds substantial agreement on a wide range of policy issues. For example:
- 87.5 percent agree that “the U.S. should eliminate remaining tariffs and other barriers to trade.”
- 85.2 percent agree that “the U.S. should eliminate agricultural subsidies.”
- 85.3 percent agree that “the gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged.”
- 77.2 percent agree that “the best way to deal with Social Security’s long-term funding gap is to increase the normal retirement age.”
- 67.1 percent agree that “parents should be given educational vouchers which can be used at government-run or privately-run schools.”
- 65.0 percent agree that “the U.S. should increase energy taxes.”
And, finally, the topic that generates the most consensus:
- 90.1 percent disagree with the position that “the U.S. should restrict employers from outsourcing work to foreign countries.”
One issue that fails to generate consensus is the minimum wage: 37.7 percent want it increased, while 46.8 percent want it eliminated.
Hat tip: Greg Mankiw
The key issue is the elasticity of labor supply. Some economists do believe, as you suggest, that this elasticity is small and, as a result, that taxes aren’t very distortionary. Others believe that the elasticity is larger. Economist Ed Prescott has suggested that the main reason Europeans work less than Americans is the higher tax rates they face.
Think of it this way. Imagine that you are a painter deciding whether to accept another painting job this weekend. I am willing to pay you $500 for the work. It is possible that you would do the job for $500 but not for $300 (the amount you would keep after paying payroll taxes, federal income taxes, and state income taxes)? If you think that all workers make such decisions without regard to remuneration, then the assumption of inelastic labor supply is correct. In this case, taxes are not distortionary. But if some people respond to incentives and would do the job for $500 but not for $300, then that response is what makes taxes distortionary.
How Distortionary Are Taxes? from Greg Mankiw
Marriage is in decline across much of northern Europe, from Scandinavia to France, a pattern some sociologists describe as a “soft revolution” in European society — a generational shift away from Old World traditions and institutions toward a greater emphasis on personal independence.But French couples are abandoning the formality of marriage faster than most of their European neighbors and far more rapidly than their American counterparts
The increase in out-of-wedlock birthrates is even more dramatic: Last year, 59 percent of all first-born French children were born to unwed parents, most by choice, not chance. The numbers were not driven by single mothers, teenage mothers or poor mothers, but by couples from all social and economic backgrounds who chose parenthood without marriage vows.
Unless the life chances of children raised by single mothers suddenly improve, the explosive growth of the U.S. Hispanic population over the next couple of decades does not bode well for American social stability. Hispanic immigrants bring near–Third World levels of fertility to America, coupled with what were once thought to be First World levels of illegitimacy.
To grasp the reality behind those numbers, one need only talk to people working on the front lines of family breakdown. Social workers in Southern California, the national epicenter for illegal Hispanic immigrants and their progeny, are in despair over the epidemic of single parenting. Not only has illegitimacy become perfectly acceptable, they say, but so has the resort to welfare and social services to cope with it.
Dr. Ana Sanchez delivers babies at St. Joseph’s Hospital in the city of Orange, California, many of them to Hispanic teenagers. To her dismay, they view having a child at their age as normal. A recent patient just had her second baby at age 17; the baby’s father is in jail. But what is “most alarming,” Sanchez says, is that the “teens’ parents view having babies outside of marriage as normal, too. A lot of the grandmothers are single as well; they never married, or they had successive partners. So the mom sends the message to her daughter that it’s okay to have children out of wedlock.”.
The child of academics, raised in a liberal household and educated in the liberal arts, [Arthur C.] Brooks has written a book that concludes religious conservatives donate far more money than secular liberals to all sorts of charitable activities, irrespective of income.
…
The book’s basic findings are that conservatives who practice religion, live in traditional nuclear families and reject the notion that the government should engage in income redistribution are the most generous Americans, by any measure.
Conversely, secular liberals who believe fervently in government entitlement programs give far less to charity. They want everyone’s tax dollars to support charitable causes and are reluctant to write checks to those causes, even when governments don’t provide them with enough money.
Such an attitude, he writes, not only shortchanges the nonprofits but also diminishes the positive fallout of giving, including personal health, wealth and happiness for the donor and overall economic growth. All of this, he said, he backs up with statistical analysis.
“These are not the sort of conclusions I ever thought I would reach when I started looking at charitable giving in graduate school, 10 years ago,” he writes in the introduction. “I have to admit I probably would have hated what I have to say in this book.”
Still, he says it forcefully, pointing out that liberals give less than conservatives in every way imaginable, including volunteer hours and donated blood.
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