Monday, September 29, 2014

Does Sparing the Rod Spoil the Child, and Should Corporal Punishment Be Outlawed?

"He who spares the rod hates his son." -Proverbs 13:24.

"Spare the rod, spoil the child" is something that Minnesota Vikings running back Adrian Peterson allegedly believes in, and it's getting him in trouble due to child abuse allegations.  The Peterson scandal has caused the debate on corporal punishment and striking children back to the forefront. From a Jewish standpoint, parents are supposed to love their children and really not supposed to use physical discipline like spanking. Not only does this make sense when reading the rest of the verse that says "and he who loves his son will chastise him [without striking him] (ואהבו שחרו מוסר)," but even the "rod" mentioned in the first part of Proverbs 13:24 is meant to be taken as a metaphor for "tough love." Even with that being said, I would like to ask whether corporal punishment is effective, and if not, whether we should ban it.

The idea behind corporal punishment is that children need discipline, order, and structure. One of the ways of making children behave properly, especially when their behavior is atrocious, is the occasional striking or spanking, say the proponents of corporal punishment. As much as proponents think that spanking or paddling brings the child in line, the vast majority of academic literature is clear in showing the evidence of the negative side effects of corporal punishment (Gershoff, 2002). Negative results of corporal punishment include lowering one's IQ (Durrant and Ensom, 2012), increasing aggressive behavior (Taylor et al., 2010), altering brain development (Tomoda et al., 2009), creating greater risk for criminal behavior (Gershoff, 2013), as well as increasing the likelihood of personality disorders, mood disorders, and substance abuse (Afifi et al., 2012; Teicher et al., 2011). The American Psychological Association is against it, as are the American Academy of Child and Adolescent Psychiatry and the American Psychoanalytic Association.

Corporal punishment does not provide the disciplining that proponents desire, which is the primary argument for permitting it. There are currently 39 countries that ban all forms of corporal punishment, as well as 19 states that ban it in schools, and you haven't seen crime rates spiral out of control as a result. If corporal punishment is so terrible, should the government ban it from being used as a parenting technique? First, there is the possibility that the negative effects of corporal punishment are merely correlative. Given all the studies out there, the argument is a tad tenuous, but I will let that be for you to decide. Second, and more to the point, the frequency, severity, and type of corporal punishment all play a role in the magnitude of the damage it can cause. To analogize, if someone tries a cigarette once in their life or has a single cigarette a year, it will cause a lot less damage than someone who smokes two packs a day or smokes cigars. It would be nice to see if there is any variance when these factors are accounted for. This brings us to the question of whether the slightest amount of corporal punishment is tantamount to child abuse or if there is a certain amount and/or magnitude that would constitute as child abuse. It is more believable that a one-time, light tap on the child's rear end will have a much less detrimental effect than painful belting or paddling that becomes part of the parent's routine. A parent who does the former had a one-time, minor relapse, whereas the latter is committing a form of domestic abuse, and should be punished accordingly.

I have four issues when it comes to banning corporal punishment. The first is ideological. Unless the abuse is particularly heinous (e.g., the corporal punishment is both severe and become a habit), I am not going to want to step in and tell parents how to parent. There are people who think same-sex parenting, vaccinating children, or circumcising baby boys is objectionable. Their objections wouldn't be based in facts, but it would be their prerogative as a parent. There are certain parenting methods with which one disagrees, such as single-parent parenting. I personally think there are a lot of people who are not ready to be parents, and shouldn't reproduce in the first place. If I were in a position where I could let my high standards legally define what constitutes as "good parents," there would hardly be any parents out there. There are always going to be lousy parents out there. We cannot save every child from having a lousy upbringing. We should prosecute when the cases are severe, especially since state budgets have experienced budget cuts over the past few years, and let the infrequent and relatively non-malign offenders do their thing. This brings me to my second point, which is how in the world would you enforce this law? If you ban teachers spanking a child in school, that's easier to enforce. To have it illegal in homes would require an Orwellian intrusion of government putting cameras in homes. Even if Americans were willing to sacrifice their sense of privacy, which is doubtful in the first place, who is going to monitor all these homes? And if we are going to be on the watch for corporal punishment, what else should the government define as "good parenting?" Perhaps the mere legality of the ban could deter corporal punishment, but again, we should prosecute the egregious cases only. Third goes to political feasibility. In an American context, how could we pass a law against corporal punishment when it has an 81 percent approval rate? Fourth has to do with efficacy. If Prohibition, the War on Drugs, or making it illegal to sell one's kidneys have taught us anything, it is that downright, blanket prohibitions are ineffective, and have the uncanny propensity to make things worse.

The evidence shows that corporal punishment does not do any favors for the child, and most probably makes things worse for the child. We need to have a discussion on better parenting techniques and how parents can learn positive reinforcement so they do not have to resort to corporal punishment. Although I will leave that discussion for another time, what I do want to say is that in spite of my opposition to corporal punishment, it is I believe that the government cannot and should not police parenting like in the form of an enforceable ban on corporal punishment.

11-7-2014 Addendum: The Brookings Institution just put out quite the policy memo on why corporal punishment doesn't work.

4-27-2016 Addendum: A meta-analysis of 75 studies covering the span of 50 years was recently released by the Universities of Michigan and Texas at Austin, and it concludes that it a) does nothing to improve behavior in the short-term, and b) is detrimental in the long-term.

Saturday, September 27, 2014

Finding Death Penalty Deterrence Evidence Is Like Finding a Needle in a Haystack

Although there are only a small handful of executions per annum, the death penalty remains a hot-button issue, even with decreasing support. Today, I don't want to get into how many innocent people die on Death Row, ethical qualms with capital punishment, or how your "typical conservative" advocates for the death penalty while claiming to be pro-life or wanting less government in our lives. What I simply want to ask is whether the institution of the death penalty acts as a deterrent for people committing more crimes or not.

It's obvious that deterrence involves the discouragement of a certain act. In this case, one of the goals of the death penalty is to discourage crime, specifically murder. The question here is "Who are we trying to deter?" Are we only trying to deter those who have previously murdered and are currently imprisoned? If so, then the death penalty is very effective as a deterrent. After all, dead men can't commit more acts of murder.

If we are trying to deter society as a whole, then that is a different story all together. In an American context, if I had to guess why the death penalty would not be effective, it would be because it is so infrequently and arbitrarily implemented. Also, with most capital crimes such as these, either the murder was in the heat in the moment or the murderer is so depraved and callous towards human life that nothing will deter the individual.

Any conducted studies that have allegedly found correlation never considered the possibility of noncapital punishment effects on homicide rates. In a 2012 report by the Committee on Deterrence and the Death Penalty, the main finding was that there was no proven deterrent effect that was unique to the death penalty (p. 29). The vast majority of criminologists have also found that the death penalty does not create any additional deterrence that life in prison would create (Radelet and Lacock, 2009).

I have major apprehensions giving the government power over life and death itself. Even if I were going to analyze the death penalty based on consequentialist terms, you better believe that I would like some evidence that the death penalty actually works. This is all the more so true when we are talking about the government curtailing personal liberty. The only thing that we know about the death penalty are its liabilities, not its benefits (Lamperti, 2010). I also have to wonder why one would even use deterrence as a primary argument for the death penalty. If deterrence were a factor, why not televise it so everyone can see it? How about making it long and excruciating as possible so it scares would-be criminals? Why not apply it to other crimes? Not only is the evidence of deterrence lacking, but even if the evidence existed, it would hardly make the death penalty a justifiable practice. There are certainly better alternatives for deterring crime.

Monday, September 22, 2014

Avinu Malkeinu: Balancing G-d's Love and Justice on Rosh Hashanah

As we approach Rosh Hashanah, I think of the awe-inspiring liturgy that we read and sing on the yom tov. My favorite liturgical piece in all of Judaism, which so happens to be read on Rosh Hashanah, is called Avinu Malkeinu (אבינו מלכנו; Our Father). Avinu Malkeinu consists of a long list of supplications that range from good health to prosperity in the upcoming year. At the end of this liturgical piece, we read the following verse, one that has been sung by many Jewish artists:

אבינו מלכנו חננו ועננו, כי אין בנו מעשים.  עשה עמנו צדקה וחסד והושיענו.  

Our Father, our King, be gracious to us and answer, though we have no worthy deeds. Act with us in charity and loving-kindness and save us.

Rabbi Akiva used the Avinu Malkeinu prayer to successfully end a drought (Talmud, Ta'anit 25b), so what is it about this particular verse that is so alluring? In this concise passage do we see a complicated relationship with G-d. On the one hand, we ask G-d to act with charity and loving-kindness, which denotes the love of G-d. Much like a parent (אבינו), G-d shows His children unconditional love. On the other hand, we come before G-d, our King (מלכנו), saying we have no worthy deeds, thereby showing our awe for G-d's transcendent Oneness. Seriously, who are we to plea with G-d? We see this balance in G-d's treatment of humans in general. If G-d had created a world of strict justice, none of us would be here. If G-d created a world with strict love, our ethics, morals, and behavior would mean nothing because G-d would reward all behavior equally, which would be unfair. How does G-d strike a balance? With mercy. Throughout the High Holy Day liturgy, we see this motif surface, and it's evident here.

How do we see this balance struck? We recognize that we have no worthy deeds (כי אין בנו מעשים). No matter how many mitzvahs and good deeds we perform, they will never be enough in comparison to what we could have done. On the other hand, we as mere mortals ask G-d to treat us kindly and recognize our human nature as a mitigating factor, another theme throughout the High Holy liturgy.

Whether we view G-d as an overbearing parent or a more distant one, we want a relationship with G-d similar to one in which we can please our parents. We all stand in rawness of our frailty, mortality, and human limitations while asking ourselves how we can do better for the upcoming year. In essence, Avinu Malkeinu is the way that we connect with transcendent Oneness on an even higher level than normal and remind Him of His mercy on one of the most holy days of the Jewish calendar.

Saturday, September 20, 2014

Peace vs. Self-Defense: Which Wins in the Jewish Debate on Gun Control?

The Rabbinic Council of America (RCA) issued a statement about how we need gun control to mitigate gun violence. Rather than bite the bullet, a few rabbis broke rank and endorsed a counter-statement saying how self-defense is decidedly a Jewish value. This is another case of "two Jews, three opinions,".....or wait, was that "three Jews, five opinions?" In either case, what we have here are two conflicting values in Judaism. On the one hand, Jews are meant to pursue peace (רודף שלום). On the other hand, we have such an appreciation for life that self-defense is permissible under Jewish law. Irrespective of secular society or debates on the Second Amendment, how does Jewish law view the issue? Are there certain halachically acceptable restrictions on gun ownership? If so, what are they? Can Jews carry guns to protect themselves, even on Shabbat, or would Jews be steering too far away from pursuing peace by doing so?

Let's first mention the idea that peace is a Jewish ideal. It is such an ideal that G-d shows us in Genesis 18 that peace trumps truth. The Talmud (Gittin 59b) says that the entirety of Torah is based on peace. Proverbs 3:17 says that the ways of Torah are those of pleasantness and peace (שלום). In the Talmud (Shabbat 63a), the Sages said it was shameful to carry swords (although if we want to extrapolate that to a modern-day context, it could also apply to guns), and do so based on the Messianic prophecy in Isaiah 2:4 of "beating their swords into plowshares."

What Rabbi Eleizer, who was considered one of the greatest rabbis of his generation, pointed out in Shabbat 63a is that we do not live in the Messianic era. As I brought up a couple of weeks ago when analyzing the Torah law of the woman captured in war, we live in an imperfect, messy world that can be downright dark and cruel. We can do our utmost to live according to our ideals, but we also have to remember that we live in a world where there are a lot of people who don't necessarily share our ideals. In spite of democratization, people still commit crimes. From a Jewish view, we have to contend with rising Antisemitism and hate crimes against Jews, not only in America, but on a worldwide level. Until the Messiah arrives, we have to come to terms with the fact that we live in a world that creates situations that necessitate self-defense. Fortunately for us, Judaism unquestionably allows for self-defense. If someone comes to kill you, the Talmud (Berachot 58a) tells you that you "get up earlier to kill that person" (also see Exodus 22:1 and Talmud Sanhedrin 72a). As the aforementioned counter-statement illustrates, not only is being armed a sign of freedom (Exodus 13:8), but Chanukah is essentially a celebration of Jewish self-defense, among other things.  

The difficulty with applying Jewish values to twenty-first century society is not only a temporal issue, but also one of political entities and overall legal context. We live in democratic societies. The legal authorities for much of Jewish history have been decentralized and under non-democratic societies. How businesses interact with government and how Jews interact with non-Jews is very different now than it was back then. How much of what is in Jewish law can inform us on how we feel about gun control from a religious standpoint?

Jews are commanded to take such precautions as putting parapets on their roofs because Judaism requires us to have the foresight to prevent dangerous situations (Talmud Baba Kama, 15b), which is a good springboard for discussing the overlap between Jewish values and public policy. If you live in a dangerous neighborhood, the laws of pikuach nefesh (preservation of human life) take precedence, even over observing Shabbat laws, which is why carrying a gun on Shabbat for purposes of self-defense is permissible. On the other hand, Judaism does not permit free-for-all gun ownership. You cannot sell firearms to someone you know will commit criminal acts (Talmud, Avodah Zara 15b; Yoreh De'ah 151:5-6). If a gun presents a clear and present danger to you or others, like someone with a severe case of depression and suicidal tendencies and acts as a stumbling block before the blind (per Leviticus 19:14), you cannot own a gun because having dangerous objects around is prohibited by Jewish law (Baba Kamma 15b, 46a, 79a; Choshen Mishpat, 427, 409:3). Since suicidal tendencies are brief, abrupt, and powerful, not to mention that firearm suicide is the most common firearm death, perhaps under the idea of avoiding putting a stumbling block before the blind (lifnei iver), a brief waiting period to acquire a gun to have those tendencies subside isn't the worst policy in the world. If we are worried about enabling criminals to commit more gun-related crimes, we would need to have a serious discussion on "common sense" gun control and whether gun control laws take guns out of criminal hands, do nothing, or exacerbate the situation.

Postscript: I would love to live in a world without violence. However, we cannot live in our idealized version of what we think the world should be like. We need to interact with the world as it is, and go from there to take steps and make it a more peaceful one. Since safety and preventing violence are concerns on both sides of the argument, we need to make sure that whatever it is that whatever were are advocating for or opposing addresses the efficacy of said policies. We as individuals can partake in political activism to engender change in either direction, but halacha ultimately does not have authority over how gun laws are dictated, at least in America. Israel, that is a different story. Regardless, how we personally craft our response to gun violence, self-defense, or gun control should keep Jewish values in mind, as well as how well policies work to actualize those values. What I hope for is that the Messiah comes soon so we don't have to have this argument anymore. However, until that day occurs, I am going to stick to my guns by saying that given the Jewish sources, as well as our current socio-political situation and evidence we have on various forms of gun control, the argument for self-defense is still the one of higher caliber.

Friday, September 19, 2014

Why a Basic or Guaranteed Income Is Basically Guaranteed to Be Unfeasible and Undesirable

For those of you who didn't know, Europe is wrapping up what is called Basic Income Week. The premise behind this advocacy is to promote the policy of basic income (alternativey the universal basic income, or UBI), which is the system of [unconditionally] providing everyone with a regular sum of money that citizens could survive on. An alternative of a basic income is the guaranteed minimum income (GMI), which is a means-tested form of income, i.e., you need to meet certain eligibility requirements to receive the money. A variant of basic income that has libertarian and conservative support is in the form of the negative income tax (NIT), which was created by Milton Friedman. The United States tried implementing a pared version of the negative income tax that we have come to know as the Earned Income Tax Credit (EITC). Other countries have various cash transfer programs that are meant to have a similar effect to that which has already been mentioned. Do any variants of the argument for a minimum income have merit, or is this simply another instance of the government having good intentions, but having lousy results?

Let's start off with what I like about the idea. One is that UBI or GMI are direct cash transfers, which means that bureaucracy and administrative costs are less than under current welfare programs. Do we really need 79 means-tested welfare programs? Consolidate it into one program. We don't need excess and duplicative bureaucracy. Considering how much pension expenditures are driving up state and federal budgets, this is something worth considering. The other aspect that makes GMI an improvement over the status quo is that it is less paternalistic. Yes, the government is still redistributing money, but at least it is not telling you whether you should spend that money on food, health care, rent, or child care. The idea of letting the individual choose how to spend money rather than the government dictate it through various welfare programs has libertarian appeal.

It sounds nice on paper. How do we deal with it, though, when we actually start implementing it? Should everyone receive this minimum income? Are there conditions in which one's minimum could be revoked? Committing a felony comes to mind as an example. So does making stupid and poor life decisions for which others should not be held financially responsible. Also, how big should we make this basic income? What is defined as "basic?" Food, clothing, and shelter? Should it be adjusted with cost of living? Will this basic income be based on the number of members in a given household, or should it be allocated on a person-by-person basis? Even if we were to cap the NIT at the federal poverty line [of $11.7K], it would still cost $600B per annum, begging the question "From where will we get the money?"

Much like with unemployment insurance, there is also the question of how it affects labor markets. There have been few studies done in places like Canada, the United States, and Uganda, but the data are so sparse that they render the current studies inconclusive. Even with what we do have, there is a small effect on disincentivizing work, but even that effect was minimal. Conversely, with a decreasing labor force participation rate, perhaps we don't want policy that discourages work. Furthermore, I still do have a concern about how idleness can affect well-being (e.g., what happens when people win the lottery or come by a sizeable inheritance?). Retired individuals would use the off-time wisely, and I am sure there are non-elderly individuals who could, as well. However, for the vast majority of working-age individuals, work brings a sense of purpose and focus, something which could go by the wayside if basic income has statistically significant deleterious effects on the labor markets.

Also, what do we do about current welfare programs? When laissez faire economists such as Milton Friedman or Charles Murray suggest implementing a negative income tax, they see that being accomplished while simultaneously dismantling welfare programs. If a NIT is merely going to supplement the current welfare programs, then I am decidedly against it. Replacing welfare programs like SNAP or TANF with an NIT is a prerequisite to achieving fiscal efficiency. Otherwise, you're just creating a more aggrandized, bloated welfare state. Much like I brought up with the EITC, you need to also address the double-digit rate of fraud that currently exists. If you can decrease fraud and change the in-kind transfers to direct cash transfers, I would be more amenable to a basic income. However, as current political feasibility stands, especially with rent-seeking, I currently cannot support such a policy at this time. Even if it were politically feasible and you made such modifications as a work requirement or cashifying current programs, it doesn't directly address one of the primary issues in today's labor market. Since labor markets are demanding more high-skilled labor than in the past, what we should be focusing on is education and vocational public policy to provide low-skilled labor with more marketable skills. By finding a way to provide relevant skills to various workers, we would do a better job of addressing the issue instead of exacerbating the income inequality that the Left gripes about so often.

5-13-2015 Addendum: The Cato Institute recently published a nice pro/con guide on the guaranteed income.

9-3-2017 Addendum: The Left-leaning Roosevelt Institute released a study modeling what BUI would look like. Their conclusion is that it would boost the economy by a few trillion. This, of course, is not without controversy.

Wednesday, September 17, 2014

Obamacare Doesn't Reduce Health Care Premiums. It Is Going to Drive Them Up...Big Surprise!

The rise in health care costs has been a concern for many Americans. One of the reasons that Obamacare was legislated because it was the proponents' intent to contain health care costs. With a name like "the Affordable Care Act," you would expect health care to be more affordable, right? Not so much, especially when you think about it from an economic standpoint. Under Obamacare, insurance companies are legally obligated to provide insurance to all that apply for insurance under Obamacare, and the law also mandates that everyone purchase health insurance. Since the law does not address providing more doctors, hospitals, or medical equipment, what these provisions do, at least according to textbook microeconomic theory, is increase the demand for health insurance, thereby increasing health care prices. It should go without saying that proponents would like to ignore this, or simply hope that the government can miraculously contain prices. Will Obamacare actually succeed in keeping health care costs low, or will economic theory be correct in predicting the increase in health care premiums?

On the one hand, it can be tricky predicting actuarial forecast. Premiums vary from individual to individual, and given the wide variance of health insurance laws, they also will vary from state to state. Some will see their premiums increase, others will see them decrease. A lot of it depends on one's demographics, particularly since Obamacare redistributes risk from the more elderly and/or infirmed individuals to younger and/or healthier ones. In spite of that nuance, what inquiring minds would like to know is whether the overall trend going to increase or decrease as a result of Obamacare. This is where looking at studies comes into play.

Price WaterhouseCoopers recently aggregated data from ACA state exchanges. Although PWC was unable to collect data from all states, as of August 27, the average increase in premiums was 7 percent. The Manhattan Institute did a county-by-county study to find that the premium increases would be much higher, i.e., roughly 41 percent. Kaiser Foundation published a report about the premium charges for silver versus bronze plans, and its findings were less unpleasant than those of the Manhattan Institute. Silver plans shows a modest decrease. Those on the bronze plan, which I assume is for those who can't afford nicer plans, will see a larger spike in health care premiums. I'm sure proponents will take the decrease of 0.8 percent in the silver plans (see below) as a win for Obamacare.

Obamacare proponents want to see a decrease in premiums. It was one of the promises they made in order to pass the legislation. If Obamacare does not keep costs down, it will be one of those "I told you so" moments that unfortunately harms Americans. Can the decrease in health care premiums in recent years be attributed to Obamacare? The answer to that is a resounding "No!" The Office of the Actuary in the Centers of Medicare and Medicaid Services projects health care costs on an annual basis. The most recent projections (see summary here) makes for interesting reading, all the more so since this is a bureaucratic agency under the Obama administration. Here were the takeaways from their findings verbatim:

  1. Health care spending growth for 2013 is projected to have remained slow at 3.6 percent due to the modes economic recovery, the impacts of sequestration and continued slow growth in the utilization of Medicare services, and continued increases in cost-sharing requirements for the privately insured.
  2. Improving economic conditions, the Affordable Care Act (ACA) coverage expansions, and the aging of the population, drive faster projected growth in health spending in 2014 and beyond.
  3. Health spending is projected to be 19.3 percent of GDP by 2023, up from 17.2 percent in 2012.

To put these findings in simplest terms, Obamacare has not done anything to keep health care costs down; our less-than-satisfactory economic growth did. What's more is that we are going to see health care costs increase for many Americans, in no small part thanks to Obamacare. This is something the opponents of Obamacare have been saying for a while now. This does not even consider that deductibles and other cost-sharing provisions have also been increasing under Obamacare or that premiums under exchange plans have a smaller increase than initially anticipated is due to "narrower networks of providers and tighter management of subscribers' use of health care than employment-based plans do (CBO, 2014, p. 7)." These latest findings only confirm the extent to which the government royally screws up with health care costs and provisions. Rather than give the government control of something as vital and essential as our own health care, we should frame the conversation in terms of how to have less government in our health care decisions, not more.

10-28-2014 Addendum: In case you needed more proof that Obamacare is driving up premiums, here is a study from the non-partisan, health insurance organization called HealthPocket showing double-digit health care premium increases. 

Monday, September 15, 2014

Should Scotland Become an Independent Country?: The Economic Ramifications of Secession

Sir William Wallace, the historical figure who inspired the movie Braveheart, might have his dream of a free, independent Scotland come true. This week is a big week for Scotland because it is voting on a referendum for Scotland's independence from the United Kingdom. Such a referendum would have huge implications not only for the United Kingdom and the pound zone, but even for the entire world. Scotland has a long history of wanting to be its own country, even in spite of voluntarily joining the United Kingdom in the eighteenth century, so such an impetus does not surprise me. What I have to wonder is whether passing such a referendum would be a good move for Scotland or not.

Looking at secession from a political theory lens is interesting, especially when making a libertarian argument for self-determination and voluntary association, although making nationalistic arguments either way are of a much more subjective nature, which I do my utmost to avoid when analyzing public policy issues. For me, such debate has very little practical implication. Sure, Scotland can claim a moral right to secede or leeway under international law, but from that standpoint, it comes down to whether Scotland can get away with it. Other countries have gotten away with it: Finland, Bangladesh, Eritrea, Yugoslavia, Czechoslovakia, the Baltic states. We can debate whether being a small country is actually an advantage, and looking at the aforementioned list, success is a mixed bag. Even if Scotland can successfully become its own country (see the Scottish government's analysis on the prospectives of independence), it might not be wise for Scotland do to so for a few reasons (HM Government, 2014).

My primary concern regarding Scottish independence is that Scotland is currently a part of the British monetary union. If Scotland secedes from the British government, will it still keep the pound (MacDonald, 2010)? If Scotland wants independence from London, then wouldn't it want full independence from Britain? Will London retaliate and kick Scotland out of the pound zone if Scotland secedes? In spite of whatever flaws British monetary policy might have, the pound is a relatively stable currency. It would be a disservice for Scotland to lose such monetary stability, not to mention that secession could very well erode London's monetary stability, although neither Fitch nor Moody's are worried about the UK's creditworthiness if this occurs.

What would be Scotland's alternative monetary options if it secedes? Adopt its own currency? Adopt the nascent Bitcoin? Adopt the euro? Scotland currently doesn't have a central bank or fiscal backstop, and if Scotland tries to enter the European Union, it will have troubles doing so. In order to become a member state, it needs the unanimous votes of all 28 states, including the United Kingdom. Good luck getting Westminster's consent on that one! And even if the EU approves after years of bureaucratic nightmares, it would only encourage more secessionist movements, which I assume that various EU countries (e.g., Spain) do not want to endure. Also, will the EU even want to admit Scotland into the EU? If Scotland can't get along with its closest neighbor, how well will it be able to get along with other European nations with which Scotland has less in common? Scotland's independence would refute the idea that democratic nations can accommodate pluralism.

What will become of Scotland's currency usage is not only a vitally important question, but it remains an unanswered one. If I had to make an educated guess, the confusion and havoc caused will make it difficult to maintain the monetary union if Scotland declares independence. According to the Institute for Fiscal Studies, Scotland would have a more difficult time with long-term fiscal sustainability if it becomes independent. Interestingly enough, though, Standard and Poor's is not too worried about Scottish independence and views Scotland as creditworthy, but there are still many economic woes with which Scotland would have to contend. The pound is one of the top currencies held in global reserves, and if the pound further depreciates because of Scotland's independence (which is possible considering a) the pound's relative decline since this all began, and b) London would appear to be disorganized and weak), it could very well have a ripple effect on the global economy. Furthermore, Scotland would be heavily relying on its gas and oil industry to drive its economy, which can be daunting considering the volatility of energy sector prices. And what happens when Scotland's oil runs out? One of the basic tenets of investment is to diversify your portfolio because it minimizes risk. Scotland would have to rely more heavily on its other industries if petroleum isn't the great boom they think it is. Euromonitor International finds that Scotland would not experience a huge dent in their consumption, which would be an argument for Scotland's independence. Also, some of Scotland's most prominent banks are also threatening to move their business to England, which would be bad for Scottish economic prospects. Since Scotland's finance sector is very much tied to London's financial markets, Scotland's independence, as nominal as it might be, would be illusory. Looking at the "Yes Scotland" website, the proponents pushing for independence want to either maintain or increase government services, which doesn't sit well with me from a libertarian worldview.

There are a few other transition costs to consider. Scotland already has sovereignty in quite a few policy issues, including agriculture, education, tourism, and law and order, so it's not like Scotland has to kowtow to Queen Mum for every last thing. From a militaristic view, there is dividing the British army and determining Scotland's status in NATO. There is a question of whether trade between the UK and Scotland would be more constricted in terms of freedom of movement and freedom of trade, especially since the UK is the largest importer of Scottish goods. Scotch whiskey producers are at least worried about this. Furthermore, Scotland would need tens of billions of pounds in its reserves to pull this off. Finally, I'm going to have to agree with Paul Krugman on something, even if for different reasons: a monetary union without a fiscal union is disastrous. Just look at the European Union. We don't need to repeat history if we could help it. This is compounded by the current political fragility not only in the UK, but in Europe in general. Certain European countries are just getting out of the recession (e.g., Spain). Even if you think that Scotland declaring its independence is a good idea, is this really the best time to do so?

Ultimately, it is up to the Scottish people as to whether it should roll the dice. While I think that there are some potential benefits to Scottish secession, there are enough risks and costs where I, along with the majority of economists, simply think Scottish is too risqué for the Scottish people.

Friday, September 12, 2014

Knocking Some Sense Into the Federal Government About Its Policy on Domestic Violence

Tomorrow will be the 20th anniversary of the Violence Against Women Act (VAWA). According to a report by the Congressional Research Service (CRS), VAWA was created back in 1994 to address violent crime, particularly against women. Its method of addressing violence against women was twofold: (1) enhanced investigations and prosecutions of sex offenses, and (2) provided a number of grant programs to address the issue of violence of women (CRS, 2014, p. 2). With a name like the Violence Against Women Act, one would have to be sadistic to believe violence against women is a good thing. Sexual assault, rape, violence, and murder are all acts against humanity that are decidedly against libertarian principles, i.e., it violates the nonagression axiom. As the Center for Disease Control (CDC) points out, domestic violence even has long-term effects that surpass the period of the abuse. So how can anybody against VAWA and the noble cause of fighting domestic violence? Its goal is to reduce, or even eliminate, violent crimes against women. However, just because a piece of legislation has a name such as the Violence Against Women Act doesn't mean it's a form of "truth in advertisement." The Affordable Care Act, also known as Obamacare, has the word "affordable" in it, but the ACA has hardly made health care more affordable. What about VAWA? Does it properly target violence against women, or is VAWA just another government initiative with good intentions, but lousy results?

Before delving in, I think it's always worth it to mention the price tag of any government initiative. VAWA is a program that costs the taxpayers $412.5M per annum (the CBO puts the estimated costs at a higher number). In comparison to the $3.45T (FY 2013) budget, the cost of this program is relatively minute (i.e., about a ten-thousandth of the federal budget). Ways to make more efficient programming and curb waste is constantly at the forefront of my mind, but it's not a huge cost driver of federal-level debt, so I'll leave that one alone for now. I'll spend more of my focus on how VAWA does or could affect violence against women.

How good of a job has VAWA done in terms of reducing violence against women? From 1993 to 2010, we see a 64 percent decrease in intimate partner violence, which is great. The issue here is that the rates that criminal acts were decreasing in the early 1990's. How much can we honestly attribute to VAWA and how much can we attribute to the overall decrease in criminal behavior? Correlation is not the same thing as causation, which is something the Government Accountability Office had a problem with VAWA back in 2002 because no one conducted rigorous, experimental evaluation of VAWA's effectiveness. Unsurprisingly, this evaluation still has not been conducted, which means there is no actual evidence that VAWA was responsible for the domestic violence decreases. If anything, it seems that VAWA has had no unique effect on domestic violence rates (Cho and Wilke, 2010).

Looking at the CRS report, VAWA puts too heavy of a focus on law enforcement, thereby diminishing the complexity of domestic violence. Considering that VAWA was created during the end of the "tough on crime" heyday, it should be no surprise that a majority of VAWA funds go to prosecuting and other expenditures related to law enforcement. At the very least, VAWA funds should de-emphasize law enforcement and focus more on prevention, job and vocational training, finding a way to leave the abuser, or addressing the underfunded shelters. Additionally, when discussing problem-solving in a public policy context, we have to ask ourselves what are the root causes [of domestic violence]. The CDC provides an extensive list of over thirty causes of intimate partner violence, ranging from unemployment to depression to belief in strict gender roles to anger issues to poverty to substance abuse. Since the issue of intimate partner violence is so complex and intertwined, we would have to look at a combination of mental health, poverty relief, health care, education, and economic policy to address the issues. And even in the improbability that we can craft a policy to address all those issues, we cannot succumb to Vice President Biden's recent naïveté of thinking the government can stop domestic violence with government policy.

I additionally worry about unintended consequences of VAWA, aside from less funding going to directly address the root causes. One is that of mandatory arrest laws. In addition to doing away with "innocent until proven guilty," mandatory arrest laws increase arrest rates. This might seem like a good idea but what happens is that the woman worries that her husband gets thrown in jail. Since she doesn't want her partner getting thrown in jail, it leads to either retracted accusations or the more common occurrence of reporting domestic abuse less. As a result, intimate partner homicide increases (Iyengar, 2007).

It is also unfortunate how these laws depict men and women as narrow, inaccurate gender stereotypes. "Men are sex-crazed abusers. Women are victims." This mentality is not good for either gender. While there are some general differences between the genders, assuming that men are always the assailant in a domestic abuse case is simply not true. For starters, let's realize that nearly one in four men are victims of sexual violence in their lifetime. While women are statistically more likely to be the victims of domestic abuse, it is not as if men never are victims. Women can victimize, as well, and there are numerous instances in which the domestic violence is reciprocal (e.g., Whitaker et al., 2006). Take a look at this 2010 report by the CDC (particularly Chapter 4), and I can tell you that the number of male victims (CDC, 2010, Table 4.2) in a domestic abuse case is more numerous that one would have thought. 31 million males: that is nothing to scoff at, especially when that is approximately 28.5 percent of the male population. These numbers are most probably underestimates because individuals underreport domestic violence. If women are prone to underreporting because of the shame, think of how much more men are going to underreport domestic violence when it has the potential to emasculate them in a culture of hypemasculinity.

I am not to here diminish what female victims endure. I can only imagine what a female victim who goes through when she is victimized. However, we also need to recognize that there are also a sizeable amount of male victims. Not only is VAWA a Title IX violation, but it an assault on the idea of equal treatment under the law. We should not have laws that say that violence against women is more heinous than violence against men. A victim of a crime is a victim, regardless of gender.

In summation, I would suggest the following reform for VAWA. De-emphasize the "tough on crime" aspect. Put more emphasis on domestic shelters, as well as addressing root causes. Mitigate some of the fraud issues. Conduct effective evaluation that can determine VAWA efficacy. Create a societal climate in which both male and female victims feel that they can talk about their abuse and prevent future violence. Finally, and most importantly, make the law gender-neutral. If we are going to live in a pluralistic society where we emphasize that our similarities are more important than our differences, we need to create laws that help both men and women.

Wednesday, September 10, 2014

Yes, Spain's Economy Is on the Road to Recovery, But....

The Organisation of Economic Co-operation and Development (OECD) made an important announcement a couple of days ago: Spain's economy is on the road to recovery. After dealing with nearly a half decade of negative GDP growth, Spain is seeing positive GDP growth once more. This is good news or a country whose nominal GDP is over $1T, and is relatively more reassuring than what we see in Italy right now. The International Monetary Fund (IMF) echoed similar positivity in its recently published Article IV Consultation, pointing out that exports are driving the recession, domestic demand is making a comeback, and labor reforms have been enacted (p. 4). By looking at many of Spain's macroeconomic indicators (for my Spanish-speaking readership, you will also enjoy this July report from la Asociación Española de Banca on economic indicators), it seems like Spain is doing better. Even with this good news, what the data on the Spanish economy tell us is that Spain is hardly out of the woods yet.

If we take a closer look at the OECD's latest economic survey, Spain still has some issues, most notably with unemployment (IMF, p. 7). One in four Spaniards are still unemployed, which is well above the Euro Zone average of 12 percent. The OECD recommends additional job search assistance and vocational training to remedy this issue. Price Waterhouse Coopers also points out in a recent report that a proper investment in human capital will be vital for Spain's future (p. 73-74). Looking at the World Bank's Doing Business Index (as well as OECD analysis; OECD, p. 10), it would help if Spain loosened up some regulations, especially when starting a business. If the World Bank is ranking you where your country is the most difficult in the Euro Zone to start a business, you should do something to foster economic growth in the private sector. Entrepreneurship is key for boosting economic growth, and is something Spain should keep in mind.

Public sector debt, combined with its high tax burden, also remains a major issue for the Spanish economy. Before the recession, the debt-to-GDP ratio was just at 36 percent. Now, it's at a whopping 94 percent, which doesn't do any favors for its International Investment Position. Being able to pay of this debt is vital for Spain's economy in the upcoming years, which is why tax reform is a good idea (OECD, p. 10). This means cutting back on the income tax, removing the preferential treatment on the value-added tax (IMF, p. 26), and removing the bank tax. Spain should make its tax broader and more efficient to mimic its European counterparts. Cutting back on its welfare state would also do wonders for the Spanish economy.

We can go into other facets of the Spanish economy. We can talk about it's a good thing that Spain keeps inflation low enough to maintain a sense of competitiveness (IMF, p. 33) because the Euro Zone is in that bad of shape. We can discuss fiscal consolidation (IMF, p. 25), reducing trade barriers (IMF, p. 24), but if the reports from IMF and OECD indicate anything, it's that Spain's recovery, while impressive, needs further reforms if we want to actually consider it long-lasting.

Monday, September 8, 2014

Summing Up Whether Teach for America Is a Success

Teach for America is a non-profit organization that enlists recent college graduates and professionals to teach for at least two years in low-income communities throughout America. Teach for America receives its funding primarily from private donations, but also some Title VIII government funds, i.e., it functions more as a private-sector institution. Vox recently published a lengthy article regarding its criticisms and how it finally is looking to change its practices. What is it about the non-profit that causes such a ruckus?

One form of criticism is that most leave after the two-year commitment. For some, teaching in low-income areas is not quite what they imagined. Many find teaching opportunities elsewhere, especially if they are higher-quality, better-paying jobs. As long as there are those who are interested in the Teach for America program (which seems to be the case, given its acceptance rate), at least the teacher shortage issue is solved. The second criticism is that these corps members do not have an extensive training program. While five weeks is better than nothing, it is arguably insufficient. Although an intensive summer program is no substitute for experience, Teach for America has implemented professional development metrics for the corps members throughout the program. Even so, maybe traditional public teacher education is preferable, although with the way tenure works, I'm not so sure. Even with the lack of experience, maybe the Teach for America corps members fare better because they're younger, more energized, and more likely to try out different methodologies that could very well be better than the status quo of teacher unions. What do the more rigorous studies have to say on the matter?  

Even if you were to argue that Teach for America was merely a pathway for charter school recruitment, it is hard to argue with the results. Some studies found that Teach for America teachers perform just as well (Turner et al., 2012). The Left-leaning Urban Institute found that by using student performance exams as a metric, Teach for America teachers do a better job of teaching (Xu et al., 2009). The U.S. Department of Education commissioned a report in 2013 showing that Teach for America corp members were more effective than the teachers to whom they were compared. A standard deviation of 0.07 might not sound like a lot, but it is the equivalent of an additional 2.6 months of schooling for the average student to be exact, not to mention intuition could arguably tell us that more experienced teachers in the public school system would perform better. Those who go through Teach for America actually have more conviction and are more likely to stick with teaching (Fryer, 2011). As for spillover effects, they may or may not exist. Regardless, the Teach for America program has high overall satisfaction.

Like any other organization, it isn't perfect and Teach for America can use some reform. However, if we are to look at the big picture, Teach for America is a [largely] private-sector success to help improve upon the quality of public education in this country. While Teach for America cannot be expected to solve all of the woes facing the American public education sector, it certainly is a step in the right direction.

Friday, September 5, 2014

Parsha Ki Tetze: Does the Torah View Women Captured in War as Mere Booty or Something More?

While reading this week's Torah portion, Ki Tetze (Deuteronomy 21:10-25:19), I came across multiple verses that I liked, but I also found irksome ones upon first glance. One passage that captivated me was right at the beginning of this week's Torah portion:

If [or when] you go to war against your enemies, and Hashem, your G-d, will deliver him into your hands, and you take his captives, and you see among the captives a beautiful woman and you desire her, you may take [her] for yourself as a wife. You shall bring her into your home, and she shall shave her head and let her nails grow. And she shall remove the garment of her captivity from upon herself, and stay in your house, and weep for her father and her mother for a full month. After that, you may be intimate with her and possess her, and she will be a wife for you. And it will be, if you do not desire her, then you shall send her away wherever she wishes, but you shall not sell her for money. You shall not keep her as a slave because you have afflicted her. -Deuteronomy 21:10-14

Kidnapping women in war and providing a loophole to force her into marriage violates any sense of modern sensibility on so many levels. How can a loving and just G-d permit something so heinous? Reading this Deuteronomic passage is a fine example of what it means to struggle with G-d and figuring out what He expects from us. Perhaps a more intimate look at the text can help us discern what He is really trying to teach us in this passage about the captive woman.

Before delving into the particulars, I should mention this noteworthy point, which is that the Torah is an eternal text. One of the beauties of Torah is that it speaks to us across generations and across time. It is possible for someone in a new generation to find a gem of Torah wisdom that previously was undiscovered. It is why we read the Torah in an annual cycle: we discover new insights both about the text and about ourselves. However, we do have to remember that the initial audience, for whom many of these laws were created, was the ancient Israelites. Since they were the ones that directly received the Torah, they were the ones most impacted by these laws. By necessity, we also need to be able to interpret these texts within the context of the given time period. Interpreting a text without context renders a text meaningless. This does not mean we cannot glean any eternal insights, but we have to remember to also look at the Torah through the lens of our ancestors, and not just through the lens of our 21st-century moral understand. With that being said, let's begin.

At the beginning of the text, there is one immediate reprieve, which is that this is limited to the context of wartime. Not only is this Rashi's interpretation (amongst other rabbis), but the text also points that out. The first word used in the Torah portion, as well as this passage, is the word כי. Although it can be interpreted as "when," it makes more sense to interpret the word כי as "if." However we would like to play with the semantics in English, the Hebrew points to a conditional statement here. This means that men do not have a carte blanche to subjugate women. Given modern-day standards of warfare, it should somewhat put our minds at ease that this verse does not specifically have any practical implications. Even so, the fact that G-d provided any context whatsoever to permit this is still perturbing. Good thing I'm not done with analyzing the passage.

Upon further examination of the text, we realize that G-d enacts further barriers and conditions to make sure this doesn't become a reality. For one, the man has to wait a month before marrying her and consummating the marriage, which as I explain later, is a big deal. When comparing this to other ancient societies, this was truly enlightening because in the ancient practice of warfare, no such quarter would have been given. Although a month might not seem like much, it really is. Wartime is a period in which it is all the more tempting to do away with any sense of decency or mercy. This month-long pause provides that decency. Why? War is one of those things that epitomizes the impulsiveness of testosterone-induced decisions. Choosing to marry and cohabit with a non-Jewish woman during wartime is hasty, especially when that decision is solely based on her physical appearance (hence the use of the word "beautiful" in Deuteronomy 21:11). Thirty days is provided as a period of time for the man's hormones to settle down and time to think it over. This could explain why the passage with the the rebellious son is juxtaposed with this passage: to give men in this scenario time to realize that an improper infatuation will result in one family tragedy after another (Rashi). This could explain why the end of Deuteronomy 21 can alternatively be interpreted as an example of foresight because such family disarray would unsurprisingly create a rebellious son with spiritual angst.

G-d created men to be just as hormonal as women, which is why R. Ibn ben Ezra thought this thirty-day period was ample time to think about this decision more rationally, cool down, and ultimately set her free. The idea was to theoretically make it possible while putting up so many obstacles that it would be de facto undesirable or impossible to go through with it.

The thirty-day period was not just for the solider. It was also for the captive woman to weep for her mother and father. If the parents were still alive, then she had to mourn the separation from her parents and everything she knew (Nachmanides). If the parents were slain in battle, she needed time to mourn their death (Nachmanides). In either case, the woman needs time to honor her parents (Ibn Ezra). It's not just the mourning period that is captivating about this practice. There is also the practice of trimming the captive's hair. Nachmanides thought it was a mourning practice, but that view comes with its difficulties. The captive is also supposed to pair her nails. It is possible that the paring is done to make her unattractive (Rashi), but there is also that possibility that it has the opposite effect (also see here). The same ambiguity can be said for the garments she wore: they may (Rashi) or may not (Ramchal) have been used to make her unattractive. Depending on the man's attraction, the female captive trimming her hails, cutting her nails, and wearing a different garment may or may have not been a turn-off for him. The only definitive factor that seems to curtail the man's desires is time, as is explained in the previous paragraph.

Even with these disputes of the rituals for a captive woman entail, this begs an even more essential question: why does the woman have to go through this in the first place? Why create the situation in the first place? Answer: we live in an imperfect world. G-d didn't create us as angels. He created us as human beings that have impulses, desires, and in short, imperfections. G-d gave us free will, which means we have the choice to act on our good impulse or our יצר הרע (evil inclination). [My alternative theory is that without suffering or some sort of dependency, people wouldn't need to develop relations with G-d or other human beings. The evil inclination is quite the necessary evil, don't you think?]

During wartime, a time during which "anything goes," men are at their most vulnerable when it comes to morals and values. I would posit that G-d created such a scenario to remind us that living in a human world means living in an imperfect one, as well as a dark, cruel, and unfair one. Short of a Messianic era, we are not going to live in a world without poverty, war, or conflict, nor should we strive for utopia. People have tried that throughout history, and we know how that ends. So does this mean we should simply stop striving for ideals? Of course not.

Although Judaism has its ideals and we are to aspire to those ideals, Jewish law is practical in the sense that it provides us laws that are realistic for us to follow. G-d is not eliminating the yetzer hara in this scenario, but providing a response to the reality of the situation. Maybe G-d is signaling to us while we are to pursue our ideals, we still live in a reality that is distant from those ideals. What G-d provides the ancient Israelites is the opportunity to inch closer to our ideals in what is literally and metaphorically a battlefield.

Even in warfare and even in the surrounding ancient world where women were treated like objects, G-d provided the Israelites with a moral conduct that was within their grasp.  The laws of the captive woman give the woman time to grieve her loss. If the man is no longer interested, the man has to let the woman go. The man also has to marry the woman as part of the arrangement. This is no minor detail. G-d could have said there's no waiting period and that the sex could either be premarital or extramarital, but He didn't. He said that the soldier would have to marry the captive woman. In Judaism, marriage is a long-term commitment, and to make such a devotion is no trifling matter. As previously mentioned, G-d gave the man enough time for his hormones to settle where the odds of him wanting to actually marry a woman solely based on her looks are next to nil.

Although our sense of morality has evolved since the time of the ancient Israelites, there is still the basic message of caring about the dignity and worth of a human being, regardless of gender. Look at this week's Torah portion and you'll see that it's a motif throughout, whether it is returning lost animals (Deuteronomy 22:1-12), immediately burying the body of an executed criminal (21:22-23), erecting a parapet (22:8), providing for the welfare of the disenfranchised (24:17-22), using honest weight and measures (25:13-16), or ensuring the timely payment of wages (24:14-15). G-d asked our ancestors to take the moral situation of their given time period and inch towards the ideals that Judaism teaches. It is currently the month of Elul. We are approaching the High Holy Days and have to realize that G-d is asking the same of us as He did of the ancient Israelites in this passage: to elevate our moral status quo. If we can take the lesson G-d is teaching us in this Deuteronomic passage and raise our spirituality even a little bit, we will have metaphorically put a smile on G-d's face.

Wednesday, September 3, 2014

Even With Less Funding, Charter Schools Still Outrank Public Schools

It should be no surprise that I have much criticism to hurl at the American public school system. For being a developed country, it is a crying shame that our public school system cannot even provide a K-12 education that is comparable to what one can receive in other developed countries. If the adage of "our children are our future" is correct because of the rate of return on human capital investments, then we should absolutely be finding alternatives to the status quo. One such alternative is the idea of a charter school, which is a school that receives government funding but operates independent of the government. Think of it as a private-public partnership for K-12 education. Much like any political issue, you will have your proponents and naysayers. Those on the Left who have an issue with charter schools bemoan further economic disparity, although I would posit that charter schools bring competition to the monopolistic grasp of the public school system and teachers unions, thereby weakening teacher union clout. If I were to have a prima facie issue with charter schools, is that there is still an element of government intervention because the government is still providing the funding with taxpayer dollards. Even so, less government intervention is a deontological improvement, which makes me wonder whether charter schools are an improvement in terms of improved economic and social welfare.

As a starting point, let's go with study from the University of Arkansas (Wolf et al., 2014) that was released back in July. What did they find? Although there were some irregularities in terms of overall performance, on the whole, the average charter school outperforms traditional public schools both in terms of cost effectiveness and return on investment (Wolf et al., p. 6). What makes this study noteworthy is that it is the first national study conducted that measures the productivity of charter schools relative to public schools. This study's noteworthiness is amplified by the fact that charter schools are able to produce better results, even in spite of receiving 28 percent less funding than public schools (ibid, p. 8). The example of charter schools illustrates once again how throwing money at a problem doesn't solve it. This is not to say that funding is not a necessity to provide a quality education (see Figure 2 in Wolf study), but the reality that one can do more with less is nothing short of astounding. Perhaps these improvements are because the charter schools are selecting prime candidates, thereby exacerbating the socio-economic disparities. Per the study, that is not the case since half of the charter schools enroll a lower-income population (p. 33).

This should help add some additional insight, especially since Stanford University's Center for Research on Education Outcomes (CREDO) shows that the average differences are not that large, although the results can quite vary from state to state. If the University of Arkansas study is a more apples-to-apples to comparison than the CREDO study, then we should take the results to heart, especially if charter schools reduce unintended teen pregnancies and incarceration rates (Dobbie and Fryer Jr., 2013), not to mention the unemployment rate (Gan and Zhang, 2013).

There is an increased demand for charter schools, and it's no surprise. Charter schools provide the flexibility and incentive structure to succeed that is nigh impossible to enact in a public school system riddled with bureaucracy and labor rigidities caused by unionism. While the impacts can vary by state and demographics, what we see in the aggregate is that charter schools work not only on a national level (see New York's success), but also in countries like Chile (Elacqua et al., 2011). There are going to be good charter schools and bad charter schools, and the fact that charter schools are in their infancy in comparison to public schools, it should be no surprise that charter schools are getting some of the bugs worked out. Policy reforms such as admissions lotteries (Angrist et al., 2011) will help, but make no mistake: based on the evidence we have, more charter schools will be a better solution to improving K-12 education in this country than throwing more taxpayer dollars at the traditional public school system.

Monday, September 1, 2014

Laboring Over the Argument of Whether We Need Right-to-Work Laws

In honor of Labor Day, I figured that some contemplation on the job market would be in order. For a recession that officially ended nearly five years ago, it's amazing how sluggish job growth has been. It would be great if they could implement some policies that actually work so we can get our economy back on track. A few months back, the good people over at the American Enterprise Institute came up with a few policy alternatives that would do the trick. One such policy alternative was to get more states to accept right-to-work laws. In spite of its name, a right-to-work law (or RTW for short) does not guarantee every citizen employment. The function of such a statute is to prohibit mandatory union membership and dues as a prerequisite to enter into a given profession. This, according to proponents, secures the rights of employees to choose whether or not they would like to join a union. For the longest time, I thought that RTW was a good way to stop unions from forcing employees to monetarily support the Democratic Party. I was then introduced to viewing the right-to-work law in a different light: a right-to-work law essentially acts as a government regulation of contract agreements telling employers how to run business. I'm no fan of unions abusing their power, and I am certainly open to an alternative policy. As of now, there are 24 states that have implemented right-to-work laws, and most people support it. However, is the implementation of a right-to-work law the way to go?

From a deontological standpoint, I have to wonder whether further government intervention to try to resolve the issues of the initial government intervention of passing restrictive labors laws back in the New Deal era is a wise decision here. Union security agreements are not as simple as "no union association" or "mandatory collective bargaining"; there are gradations. Take a "fair share provision" as an example, which don't mandate union membership but require a "fair share fee" to cover collective bargaining costs (This might sound fair, but for those who are worried that this would fund union political activities, let's remember that money is a fungible resource). Whether you have mandatory collective bargaining or RTW, they are both examples of the government interfering in the freedom of contract because they limit the types of contracts in which the parties may enter. Since I am a fan of economic freedom, I think that eliminating exclusive representation (i.e., monopoly unionism) without passing RTW laws is the best route.

As a consequentialist libertarian and a pragmatist, I have to realize that the American political establishment is not ready for a completely liberalized freedom of contract. As such, I have to ask whether RTW laws are preferable to the status quo of exclusive representation. The last thing we need is some form of public policy paralysis simply because we don't get everything we want. The extent to which RTW laws improve economic growth can be difficult to determine because states with RTW tend to have stronger pro-business laws in effect, thereby making the effects of RTW more difficult to isolate. Even so, some have given it a go.

One of the most recent reports on the subject was written by the Heritage Foundation (Sherk and Kloster, 2014), in which they found that RTW laws reduce union aggressiveness while promoting economic growth. Competitive Enterprise Institute (Vedder and Rose, 2014) also conducted a recent study. What CEI found was that a) people are migrating from non-RTW states to RTW-states, and b) economic growth is greater in RTW states than non-RTW states. The Mackinac Institute had similar findings (Hicks and LaFaive, 2013). In all fairness, I might as well cite a think-tank that begs to differ. The Economic Policy Institute, which is unabashedly pro-union, conducted studies that concluded that RTW has no positive economic effects and only works to diminish the wages of union workers (Lafer, 2011; Gould and Shierholz, 2011). The EPI's findings make sense when one considers the Left's theory that unionism makes for a strong worker class. I might have to favor the findings of the Congressional Research Services (Colins, 2012). What did the CRS find? Although wages were lower in RTW states, historical research shows that very little actually has to do with RTW laws (CRS, p. 12). Although aggregate employment has modestly increased, it is unclear if that is attributable to RTW laws or not (p. 11). If we're looking at RTW laws from their effects, the only thing we can conclude is that the research on RTW is inconclusive.

Opting for a completely liberalized freedom of contract is too much to request in a country whose unions have a good amount of power and political clout, which is why, at least for now, I would take that option off the table. If I had to choose between forced unionism and RTW laws, I would have to opt for RTW laws. Yes, it's true that the economic effects are more ambiguous. However, RTW laws have weakened the monopolistic grasp of unions, although globalization and the decline of the manufacturing sector also contributed to the decline of unions (Vedder et al., 2012). I would posit that union membership has been on the decline in the private sector because they do not provide members with an incentive to voluntarily join or remain members. It's why unions need to change their way of business if they want to survive in this century. Without going too much off-topic, what I would like to reluctantly conclude with is that although RTW laws are far from ideal, they are second-best, Pareto-optimal laws.