Category: Public Policy

Leighblackall-76202405Andrew Biggs of AEI has a piece up today at Forbes addressing the gender pay gap and provides a neat solution: “forbid women from staying at home with their children.” As Biggs points out, such a policy would address perhaps the greatest root cause of gender pay inequality: varied work experience attributable to choices women make. “Most mothers who stay at home or work only part-time are doing what they wish to do and what they view as best for their kids,” writes Biggs. This results in gaps in pay when those women re-enter the work force or increase their labor participation.

Biggs’ proposal to “make staying at home with kids illegal, just like child labor is illegal” would have another benefit favored by many: it would be a boon to GDP. As I point out in a review essay in the latest issue of Christian Scholar’s Review, the work that stay-at-home parents do is not counted toward GDP. When those parents pay someone to take care of their children as part of a business transaction, however, as in the case of day care centers, then that exchange does count towards GDP.

My piece, “Affluence Agonistes–A Review Essay,” takes a look at the book The Poverty of Nations by Wayne Grudem and Barry Asmus, in addition to a couple of other recent publications. The CSR essay expands upon a review of the Grudem/Asmus book I wrote for Public Discourse, “Life to the Full: The Dangers of Material Wealth and Spiritual Poverty.” As Grudem and Asmus put it simply, to combat poverty “the goal must be to increase a nation’s GDP.”

So not only are stay-at-home moms a major source of wage inequality, they are also “a drag on GDP.” As one press report put it, “With female participation stagnating, potential growth isn’t rising as quickly.”

Biggs’ proposal to ban stay-at-home mothers should logically be embraced by both anti-gender inequality progressives as well as GDP growth fundamentalists. As I argue in the essay, “If a nation were to pursue GDP growth as its highest goal, it would probably institute policies and incentives to induce women to work outside the home and professionalize child care. GDP incentivizes specialization and the division of labor, since such transactions are the only things taken into account.”

But the Grove City College economist Shawn Ritenour rightly concludes, “We ought not give into the temptation that all of human welfare is encapsulated in GDP.” Another way of putting it is that men, women, and children do not “live on GDP per capita alone.”

Update: For those readers who might not bother to read Biggs’ piece, he does not (and neither do I, for that matter) actually advocate for this policy.

cleancoallead2Electric cars are not a new invention, nor are they as popular as they once were. (They debuted in 1890 and by 1900 electric cars accounted for around a third of all vehicles on the road.) But over the past decade, thanks to Elon Musk and Tesla Motors, electric cars have become much more interesting.

Tesla rolled out the first fully electric sports car in 2008 and a fully electric luxury sedan in 2012. And earlier this month they unveiled the Model 3, a premium sedan for $35,000.

The Model 3 won’t be produced until 2017 but it’s already something of a success. You can “reserve” a Model 3 for $1,000, and so far the company has over 325,000 reservations. As Tesla brags, this corresponds to about $14 billion in implied future sales, making this “the single biggest one-week launch of any product ever.”

I confess that if I had $35k I’d gladly trade in my 2004 Toyota Prius for a car that goes 0 To 60 MPH in under 4 seconds. But as a conservationist and a conservative the idea of driving a car powered by coal and subsidized by the government gives me pause.

What’s that? You didn’t realize electric cars were powered by coal? That’s not surprising since you won’t find it mentioned in Tesla’s brochures. But it’s true that they are “fueled” by electricity that is created by coal or other fossil fuels (at least mostly in some states, exclusively in others). And it’s also true the government will, in the name of protecting the environment, give you a tax break for buying a car that runs on coal.

Tesla’s electric cars are beautiful, but they aren’t necessarily better for the environment. As environmental economist Bjorn Lomborg explains in this video, electric cars aren’t necessarily greener than conventional gasoline cars.

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pope-francis-childPope Francis’s recently released apostolic exhortation Amoris Laetitia has received considerable attention because of the issue of divorce and communion. But the 60,000+ word document has much more to say about family life than the dissolution of marriage. For example, it provides some compelling reasons for all Christians (not just Catholics) to support school choice.

The term “school choice” refers to programs that give parents the power and opportunity to choose the schools their children attend, whether public, private, parochial, or homeschool. While there are numerous passages relevant to school choice in Amoris Laetitia, here are four essential quotes:
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debt-trapWhat’s the biggest problem with payday loans?

The obvious answer would seem to be “high interest rates.” But interest rates are often tied to credit risk, and so charging high interest rates is not always wrong. Another answer may be that the loans appear to be targeted toward minorities. But research shows that the industry appeals to those with financial problems regardless of race or ethnicity.

No, the problem with payday loans — what makes them a debt trap — is “rollovers.”

A study by the Consumer Financial Protection Bureau (CFPB), the U.S. government’s consumer protection agency, found that four out of five payday loans are rolled over or renewed within 14 days. 40 percent of borrowers take out only one loan, about 15 percent take out two loans in sequence, and 45 percent take out three or more. But 14 percent of borrowers take out more than 11 loans in a row.

The CFPB is considering proposing rules that would end payday debt traps by requiring lenders to take steps to make sure consumers can repay their loans.

All lenders making covered short-term loans would be required to adhere to one of two sets of requirements. The first set would “prevention requirements” which the CFPB says:
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This past Friday, I blogged about the U.S. Securities and Exchange Commission’s recent decision to allow a vaguely worded proxy resolution proceed to a vote. The resolution was submitted by, among others, members of the religious shareholder activist group the Interfaith Center on Corporate Responsibility.

The ICCR resolution calls upon ExxonMobil Corporation to take action intended to mitigate climate change. ExxonMobil requested the SEC deny the ICCR resolution on the grounds it was based mainly on nonspecific greenhouse-gas reduction targets and unclear strategies to achieve them.

Since that post, I received an email from a subject matter expert that helps place the SEC’s decision in perspective. Legal Director Allen Dickerson from the Center for Competitive Politics, a free-speech nonprofit, commented:

The SEC’s decision was routine. It is extraordinarily easy, under U.S. securities laws, to put a proposal before a company’s shareholders, and politically active groups have done so with increasing frequency in recent years. But these policy proposals are seldom adopted. Shareholders generally want corporations to maximize the value of their investment, as management is legally obligated to do, and rebuff attempts to turn the annual meeting into an extension of the broader political arena.

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RiskAhead“Most of economics can be summarized in four words: ‘People respond to incentives,’” says economist Steven E. Landsburg. “The rest is commentary.”

When governments create a regulation, they are creating an incentive for individuals and businesses to respond in a particular way. But the people who create the regulations — government regulators — also respond to incentives.

As Elon Musk, the CEO of Space X and Tesla Motors, explains,

There is a fundamental problem with regulators. If a regulator agrees to change a rule and something bad happens, they can easily lose their career. Whereas if they change a rule and something good happens, they don’t even get a reward. So, it’s very asymmetric. It’s then very easy to understand why regulators resist changing the rules. It’s because there’s a big punishment on one side and no reward on the other. How would any rational person behave in such a scenario?

 

 

mass-incarcerationWith the 2010 publication of The New Jim Crow: Mass Incarceration in the Age of Colorblindness by Ohio State University law professor Michelle Alexander, the conversation about America’s exploding prison population singularly became focused on the intersection of race, poverty, and the War on Drugs. According to the narrative, the drug war disproportionately targets blacks in lower income communities as a means of social control via the criminal justice system similarly to the way Jim Crow controlled blacks in the early 20th-century.

The one problem with mass incarceration-as-Jim-Crow thesis is that it does not fit the empirical data. The drug war is not the reason that today we have nearly 2.5 million people incarcerated in this country. In the mid-1970s the U.S. prison population grew from about 300,000 to 1.6 million inmates, and the incarceration rate from 100 per 100,000 to over 500 per 100,000 largely due to violent crime, property crime, and rogue prosecutors. Drug policy changes would, therefore, have little effect on prison population rolls.

The first significant challenge to the Alexander thesis came from Yale Law School professor James Forman, Jr. In a 2012 article, “Racial Critiques of Mass Incarceration: Beyond the New Jim Crow,” Forman observes that drug offenders constitute only a quarter of our nation’s prisoners, while the violent offenders make-up about one-half. While sympathetic to the ways in which those living in poor black communities are more likely to end up incarcerated than those in middle-class black communities, it is simply not true that drug policy, targeted at blacks, is driving prison numbers.
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