Manhattan Institute for Policy Research.
search  
 
Subscribe   Subscribe   MI on Facebook Find us on Twitter Find us on Instagram      
 
 
   
 
     
 

The Weekly Standard

 

Learning for Dollars

July 09, 2007

By Heather Mac Donald

Bloomberg’s fanciful antipoverty program

New York mayor Michael Bloomberg announced his latest change of political party two weeks ago and cast himself as an innovative anti-politician. “Any successful elected executive knows that real results are more important than partisan battles,” he said via press release, “and that good ideas should take precedence over rigid adherence to any particular political ideology.” Such results-oriented executives, the implication was clear, are precisely what presidential voters are hungering for.

By now, there are few political appeals more conventional than the claim that one is unconventional and above party. But this time, the newly minted independent mayor (who had just lightly dispensed with his temporary and self-serving “Republican” identity) had rolled out a “new” solution to an old problem—poverty—the day before. Anyone interested in seeing what Bloomberg’s rhetoric of “innovative,” nonpartisan problem-solving means in practice will find his new poverty plan illuminating. It combines a clever technocratic veneer with a profound ignorance of civil society. If this at present privately funded pilot were ever duplicated widely, it could prove to be one of the most destructive welfare policies ever devised.

Bloomberg plans to pay low-income parents in six New York neighborhoods to behave responsibly toward their children, and their children to take advantage of school. Starting in September 2007, 2,550 parents enrolled in the “Opportunity NYC conditional cash transfer” pilot will get $25 for reviewing their child’s test scores, and another $25 for discussing those scores with a teacher. Merely attending a parent-teacher conference earns $25. Obtaining a library card nets $50; taking one’s child to the dentist or to a doctor-recommended (and taxpayer-subsidized) medical exam, $100. Students will receive monthly bounties for school attendance; improvement on standardized tests yields about $300; completing 11 high-school credits is priced at $600 a year. In a separate pilot, 9,000 fourth- and seventh-grade students will receive up to $100 simply for taking required math and English tests; answering all questions correctly garners up to $500.

Funding for the $53 million pilot is to come from foundations such as Rockefeller and George Soros’s Open Society Institute, as well as from Mayor Bloomberg himself. But if after two years the project architects are satisfied with the results, the mayor envisages extending the incentives city-wide and paying for them with hundreds of millions of tax dollars.

Give the Bloomberg policymakers credit for one thing: The cash-for-responsibility plan violates the greatest taboo in the poverty industry. It implicitly recognizes that the long-term poor are held back more by their own behavior than by social inequities. Talk to any inner-city teacher and you will hear how difficult it is to get parents involved in their child’s education, or students to bother with homework. Countless schemes for tutoring and job training sit on the shelves unused because the “clients” never show up. Free medical advice is wasted because patients don’t return for follow-up visits, if they bother following the doctor’s instructions at all. After the urban riots of the 1960s, political scientist Edward Banfield observed that the central trait separating the poor from the prosperous is future orientation. His insight has never been improved upon. The middle and upper classes defer gratification and invest effort in self-improvement, Banfield wrote in The Unheavenly City: The Nature and Future of our Urban Crisis; were the underclass to do so, they would not long stay in the bottom economic tier.

In unveiling his “conditional cash transfer” scheme on June 18, Bloomberg predictably eschewed Banfield’s bracing honesty. The poor fail to “plan for the future,” the mayor said, because they are “so focused on surviving.” The idea that the residents of Brooklyn and Central Harlem are engaged in a “struggle,” as Bloomberg put it, against starvation and depredation is a fantasy. Many teens who will be enrolled in “Opportunity NYC” likely wear the latest sneakers and carry pagers and cell phones. Their problem is motivation, not the unforgiving demands of a subsistence economy. Nevertheless, Bloomberg should be congratulated for implicitly acknowledging the behavior issue, however misleading the rhetoric in which he couches it.

But the cure in this case will be worse than the disease. Introducing cash rewards for conduct that is simply part of what it means to be a conscientious parent or student is no way to inculcate a more functional value system. Creating the expectation of immediate cash for behavior that provides a long-term payoff, such as studying in school, will further shorten the poor’s time horizon, rather than lengthen it. Civil society requires individuals to undertake countless actions in the private sphere out of a sense of duty and propriety. The state cannot possibly devise a payment schedule complex enough to capture those actions, nor should it try.

Liberal supporters of the Bloomberg payment plan claim that conservatives should love it—after all, it involves money, doesn’t it? And we all know that the only thing conservatives care about is money and the market. But the market is made up of entities and individuals involved in discretionary, profit-seeking transactions. There should be nothing discretionary about encouraging your child’s education or providing him with medical care (especially when that care is free). These behaviors are moral obligations, not economic exchanges. Nor are the “conditional cash transfers” comparable to tax incentives for corporate investment, for the same reason: Tax breaks, rightly or wrongly, aim to influence optional spending.

“But the program works in Mexico,” say its defenders. Leaving aside whether Mexican poverty policy cries out for emulation, Mexican peasants are facing a “struggle” for subsistence, unlike America’s inner-city poor. A campesina’s decision to take her child to the doctor may in fact jeopardize her livelihood, making the $200 offset, for example, which the Bloomberg administration intends to pay parents simply for taking their child to an annual medical check-up, a significant cushion against risk. New York is a different universe. The Bloomberg plan will pay parents $40 a month merely for maintaining taxpayer subsidized health insurance—the barrier to doing which is apathy and inertia, not a Dickensian struggle for survival.

Should the Bloomberg payment experiment go large-scale, as its architects hope, it will create a bizarre caste system, in which one part of society bribes the other to behave in ways that the paying class regards as basic to responsible human life. So far, the Bloomberg administration has not articulated any principle for distinguishing who is in that paying class, and who in the payee class, other than a crude income test. The program will enroll families at or below 130 percent of the federal poverty level. How will the administration explain to parents at 140 percent of the federal poverty line that their children should attend school simply because it is in their long-term self-interest, when their neighbors are getting paid for the same behavior?

Nor has City Hall said what its end game is. Once the payments are institutionalized, it will be difficult to dislodge the expectations that they create. Welfare advocates are already arguing that the bounties are not large enough. Expect a constant push from the poverty industry to raise the price of good behavior, to broaden the payee class, and to compensate a greater range of conduct—making sure that one’s child has had breakfast or takes his books to school would seem to be as worthy of being remunerated as downloading a child’s test scores. And once word gets around classrooms that some students are taking home $500 for doing well on tests, good luck persuading other students that they should study for the love of learning or the prospect of a better future.

Throughout his mayoralty, Bloomberg has pursued conventional liberal solutions to poverty, going on an affordable-housing building spree, for example, and seeking to water down the work requirements in welfare reform. His latest endeavor at least breaks with that conventional wisdom by correctly diagnosing the behavioral roots of entrenched poverty. Its remedy is blind, however, to the moral basis of civil society. If Bloomberg really wants to earn the title of independent, he should promote marriage as a way of reducing poverty. Now that would be a radical idea.

Original Source: http://www.manhattan-institute.org/html/_wkly_standrd-learning_for_dollars.htm

 

 
PRINTER FRIENDLY
 
LATEST FROM OUR SCHOLARS

On Obamacare's Second Birthday, Whither The HSA?
Paul Howard, 10-16-14

You Can Repeal Obamacare And Keep Kentucky's Insurance Exchange
Avik Roy, 10-15-14

Are Private Exchanges The Future Of Health Insurance?
Yevgeniy Feyman, 10-15-14

Reclaiming The American Dream IV: Reinventing Summer School
Howard Husock, 10-14-14

Don't Be Fooled, The Internet Is Already Taxed
Diana Furchtgott-Roth, 10-14-14

Bad Pension Math Is Bad News For Taxpayers
Steven Malanga, 10-14-14

Proactive Policing Is Not 'Racial Profiling'
Heather Mac Donald, 10-13-14

Smartphones: The SUVs Of The Information Superhighway
Mark P. Mills, 10-13-14

 
 
 

The Manhattan Institute, a 501(c)(3), is a think tank whose mission is to develop and disseminate new ideas
that foster greater economic choice and individual responsibility.

Copyright © 2014 Manhattan Institute for Policy Research, Inc. All rights reserved.

52 Vanderbilt Avenue, New York, N.Y. 10017
phone (212) 599-7000 / fax (212) 599-3494