Bad Incentives That Work Quite Well: The Opportunity Cost of Political Partisanship

Nick Kristof, writing in the N.Y. Times:

This is what poverty sometimes looks like in America: parents here in Appalachian hill country pulling their children out of literacy classes. Moms and dads fear that if kids learn to read, they are less likely to qualify for a monthly check for having an intellectual disability.

Many people in hillside mobile homes here are poor and desperate, and a $698 monthly check per child from the Supplemental Security Income program goes a long way — and those checks continue until the child turns 18.

And:

This is painful for a liberal to admit, but conservatives have a point when they suggest that America’s safety net can sometimes entangle people in a soul-crushing dependency. Our poverty programs do rescue many people, but other times they backfire.

Some young people here don’t join the military (a traditional escape route for poor, rural Americans) because it’s easier to rely on food stamps and disability payments.

Antipoverty programs also discourage marriage: In a means-tested program like S.S.I., a woman raising a child may receive a bigger check if she refrains from marrying that hard-working guy she likes. 

And:

“One of the ways you get on this program is having problems in school,” notes Richard V. Burkhauser, a Cornell University economist who co-wrote a book last year about these disability programs. “If you do better in school, you threaten the income of the parents. It’s a terrible incentive.”

I have always admired Kristof as a person and a writer and if you don’t know his work, this column is a good place to start (as well as his book Half the Sky, co-written with his wife Sheryl WuDunn).

Let me add just one tangential observation — about our hyper-partisan political environment. When people talk about this partisanship, one element that’s overlooked is the opportunity cost. Look at that sentence Kristof wrote:

This is painful for a liberal to admit, but conservatives have a point when they suggest that America’s safety net can sometimes entangle people in a soul-crushing dependency.

Kristof is a measured, humble, fact-based writer — the very opposite of the typical partisan flame-thrower — but it’s hard for me to imagine reading a sentence like that, written by practically anyone, before the recent Presidential election.

During a heated election period (which, in the case of the 2012 election, arguably went back all the way to 2008!), advocates on both sides of the aisle are so worried about giving their opponent any ammunition that it affects what they say, how they say it, and how loudly.

The result is more silo-speak — liberals and conservatives each shouting to their blind followers, and demonizing any dissent — and less worthwhile public thinking. I think back to how Bryan Caplan put it in a recent podcast:

People have often said that politics has been the religion of the 20th century, and I think there’s a lot to that. In the same way that people get attached to a religion, they get attached to a political party. And once you’re part of it, you don’t want to hear someone talking about the horrible things that your religion or your party did in the past. You don’t want to go and say the people who now run it might be morally questionable, or hypocritical, or just wrong. Instead, you want to find a sense of community with a bunch of like-minded people. You all tell each other how wonderful you are and try to defeat your Satanic enemies who for some strange reason continue to dispute the truth that you have obtained.

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  1. Kiru says:

    Hmm… I remember almost exactly this debate 15-20 years ago.

    The right was arguing that welfare’s dependency was dangerous, the left thought the right was trying to starve anyone who wasn’t white and rich.

    I think you might be suffering from a bit of a recentist bias.

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  2. cal says:

    “This is what poverty sometimes looks like in America: parents here in Appalachian hill country pulling their children out of literacy classes. Moms and dads fear that if kids learn to read, they are less likely to qualify for a monthly check for having an intellectual disability.”

    Having been poor growing up and being on the receiving end of various welfare programs I really doubt this is widespread-poor people aren’t sitting around thinking about how to game the system. For most welfare money is like manna from heaven not something really understood but just a mysterious gift. Economics is supposed to be involved with understanding the behavior of the participants involved and the big part of the failure of trying to fix poverty is the inability of the decision makers to understand the behavior of the people in poverty.

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