Sunday, January 23, 2011

Is the WSJ Trying to Make Walter Williams Look Bad?

I recognize that the 'weekend interview' of Walter Williams is intended to be hagiographic, but instead of presenting a credible portrait of Williams the author reduces him to a caricature, spewing platitudinous statements, preaching to the choir, and pointing to their applause as proof of his authority.

Let me start by stating that there are plenty of good reasons to criticize the modern welfare state. You cannot look at the consequences of well-meaning welfare policies implemented in the early 20th century, and their explosion as part of President Johnson's "War on Poverty", without recognizing that those policies have contributed to a "culture of poverty" in parts of the country. But it should also be remembered that other conservative bugbears, such as "the explosion of divorces" and "the sexual revolution," have been held out by others on the political right as the root cause of the problems of the inner cities. The "war on drugs" has long been argued to be a root cause by the political left, although that argument is increasingly bipartisan. My point being, it is simplistic to point to one factor and say, "Because this correlates with another problem I have identified, that's the cause". Even if you can only identify one cause, correlation does not automatically translate into causation. When multiple, significant factors are at play, it's quite possible that your "leading factor" identified solely by correlation is, even if not a non-factor, a lot less important than you believe.

It's also important to recall that, while good intentions do not justify bad results, each of the changes in society that can be argued to contribute to a culture of poverty have both good and bad elements. You can cry, "It's horrible that welfare creates a culture of dependency," but most welfare recipients are in it for the short-term. They're dealing with a crisis, such as a divorce, and their benefits help them get through that rough patch. Before you cry that the bathwater is so bad that we must throw out the baby, you need to acknowledge the presence of the baby and, if your argument is based upon economics, demonstrate how it would be economically better to let families in crisis flounder as opposed to providing the short-term assistance that appears very helpful in getting them back on their feet.

And then, when you turn to the inner cities, you have to examine the costs and benefits of your action. If you're for cutting off all welfare, or setting a firm caps on public assistance - a limit on benefits, whether in terms of dollar value or how long you qualify to receive benefits - you need to consider whether you're going to make the problem better or worse. Will we end up with our inner cities turning into libertarian paradises, or will we see roaming gangs of street kids robbing tourists, women with babies pandhandling, increased rates of theft and robbery - the type of thing we associate with dysfunctional cities in the developing world? (Let's also remember, the libertarian paradise is a purely utopian construct. None has ever existed, and there's no reason to believe that one will ever exist.)

If you're arguing from an economic standpoint, you must decide if you're going to argue in the short-term or the long-term. In the short-term will the costs resulting from cutting off public assistance in the inner cities increase or decrease cost to society? Even if you're content to have regions with concentrated poverty (and they're not just inner cities) become the equivalent of the Bangalore slums, or believe it's better to have kids spend their days roaming landfills and picking through the garbage for anything of value, you will have expenses associated with law enforcement, prisons, disease, and the fact that you're writing off additional generations of children to abject poverty.

If you take a long-term view you need to propose a solution that will address the long-term: It's no longer a matter of simply cutting off public assistance, but fashioning a program that will help transition those in the cycle of poverty into a population of working Americans. So are you going to create programs to break the cycle of poverty, and in comparative terms what will those programs cost? Because as much as people like Williams like to sneer, "Liberal programs caused all of this," when it comes to implementing a meaningful reform that will cost money, his side of the aisle that is consistently obstructionist. There's also going to be an element of experimentation and wishful thinking in whatever you propose as a solution - there's little that can't be improved with the benefit of 20:20 hindsight.

On the most recent Real Time, Rachel Maddow and Steve Moore had an exchange in which Rachel Maddow (with some support from David Stockman, Director of the OMB from 1981-1985 under Ronald Reagan) was arguing in favor of replacing various subsidies for the poor, many of which favor various lobbies, with straight cash aid. Moore blurted out that, instead of cash aid, we should "give them jobs". It seems from his politics that Moore would oppose a stimulus program for the inner cities, and would oppose any form of "make work" program, and he did not propose any job skills programs or other initiatives that might prepare a population of barely employable people for a modern workplace. If his retort was not intended as a disingenuous platitude - an effort to shut down the debate as opposed to providing an alternative approach - surely he has some ideas as to where those jobs will come from. Given the state of the economy he has the nation's ear - it's difficult to imagine that any politically conservative idea for job creation would not be welcomed. So, why are we waiting?

It would be interesting to hear the response of Walter Williams to such a simple reform as replacing all present public assistance with cash aid. The aid could still be delivered via the equivalent of a debit card, recipients could be given online management tools (and, to the extent necessary, access to public terminals and technical assistance for the use of those tools) to budget, directly pay rent, create a reserve for emergencies, and otherwise manage their finances. It actually sounds like a great exercise in personal responsibility and accountability. I expect Williams would state that such an experiment would only work if there were consequences - blow the rent money on a big screen TV, clothes, drugs, or anything else and, if you can't work something out with your landlord or find a non-governmental source for a bail-out, you get evicted. It seems like a pretty simple way to diminish the overhead in managing numerous welfare programs while creating immediate and obvious lessons for the community as to what happens if you don't learn how to manage your money.

And now, let's turn to the WSJ column on Williams. I searched for reaction to the article and, although I found countless examples of bloggers uncritically applauding its wisdom, the phenomenon appeared to be almost exclusively one of white right-wingers making statements to the effect of, "This guy just affirmed all of my prejudices - he's brilliant!". (Scroll down that page for Obama in "Joker" facepaint, labeled "socialist", or for commentary with a level of insight comparable to that photograph.) This seems to be alright with Williams, who is quoted,
"When I fill in for Rush [Limbaugh], I get emails from blacks who say they agree with what I'm saying. And there are a lot of white people questioning ideas on race, too. There's less white guilt out there. It's progress."
How, from a logical standpoint, is it significant that black members his audience agree with what he says? When you preach to the chorus, you should expect that they'll sing your praises. As for his implication that any white person who disagrees with him is motivated by guilt, there's not even a whit of logic involved. If you interpret it as a dog whistle it makes sense - and that interpretation would be consistent with how the aforementioned right-wing bloggers seem to be reacting to the 'interview'.

It's worth also taking a look at Williams' claims in terms of his own background. From looking at a review of his biography, his parents were divorced, he pretty much ran wild until he was drafted into the military, and more or less personified the culture he claims did not exist during his childhood but emerged in later years:
During Reconstruction and up until the 1940s, 75% to 85% of black children lived in two-parent families. Today, more than 70% of black children are born to single women. "The welfare state has done to black Americans what slavery couldn't do, what Jim Crow couldn't do, what the harshest racism couldn't do," Mr. Williams says. "And that is to destroy the black family."
Given the realities of Williams' own childhood family, how is that even possible? Or could it be that some of the factors that contributed to the breakdown of families, and irresponsible, criminal behavior by a subset of inner city youth, were already in place before the start of the War on Poverty? If we are to acknowledge the reality that divorce, single parenthood, youth crime, youthful disinterest in school, and the like already existed, it seems more appropriate to argue that policies implemented in the War on Poverty contributed to or accelerated the problems previously exemplified by Williams' own family, but it can't be said to have created them.

Williams also glosses right over something no libertarian should be able to miss, the rise of the black middle class and the availability of housing options outside of the inner cities. I'm reminded of arguments I've heard from others that, back in the "good old days", celebrities and professionals lived shoulder-to-shoulder with the inner city poor. Would Williams argue that the provisions of the 1964 Civil Rights Act that eliminated housing discrimination were an unjust infringement on the rights of landlords and sellers, and thus helped contribute to the decline of the inner cities? Or would he argue that restrictive covenants and discrimination by landlords were infringements on the liberties of African Americans and were properly struck down to advance equality in the marketplace? The former argument is consistent with his broader idea that evil liberals ruined the inner city - but why do I doubt that Williams' own home is in an inner city neighborhood?

On the other hand, if he accepts the end of housing discrimination as a "good thing", he needs to consider how the emigration of successful people and working families from the inner city created the present culture. When he points to the inner cities, is he seeing how those families were destroyed or is he seeing how, when those families move out, a disproportionate number of families like his own were left behind. (Not his current family unit, of course, but the broken home of his childhood.)

You have to love statements like this:
But Walter Williams was a libertarian before it was cool.
Sorry, but being a libertarian still isn't "cool". Or this:
"I think it's important for people to understand the ideas of scarcity and decision-making in everyday life so that they won't be ripped off by politicians," he says. "Politicians exploit economic illiteracy."
That statement presupposes that politicians are economically literate. Starting with the last guy the Republicans ran for President, where can I find evidence of that? Heck, looking at the position most economists took going into (and in no small part coming out of) the housing bubble, a strong case can be made that most economists don't understand economics.

The economic argument presented in the 'interview' as how Williams would balance the budget doesn't exactly distinguish Williams from his lesser-known peers:
"We need a constitutional amendment that limits the amount of money the government can spend," he says. "Let's say 18% of GDP to start. The benefit of a spending limitation amendment is that you're going to force Congress to trade off against the various spending constituencies. Somebody says, 'I want you to spend $10 billion on this,' and the congressman can respond, 'My hands are tied, so you have to show me where I can cut $10 billion first.'"
First, why should we "say 18% of GDP"? Why not 12%, 20%, 50%? Is there more to the foundation of William's economic proposal than "pick a card, any card?" And if the number is to be selected more scientifically than Williams' statement suggests, what method does he propose for its selection? What economic model is he asserting?

Second, doesn't this model make the mistake of confusing a nation's debt with household debt? Doesn't it ignore the economic consensus that deficit spending can be good during periods of recession? How about borrowing to invest in infrastructure development - never appropriate? And truly, what about a major recession like the one we just experienced. What is the mechanism by which we would slash government budgets, departments and jobs so as to stay within a fixed 18%? And wouldn't that cure be worse than the disease? Wouldn't we end up deepening the recession and perhaps creating a downward spiral?

Third, if we're not going to apply a firm 18% in the event of an economic crisis or other emergency, what measure do we employ to ensure that we're not always claimed by Congress to be in the midst of an economic crisis or national emergency. "I was going to stay within 18% this year but, darn it, I thought that there were Cuban soldiers in Grenada so I had to invade" - national emergency? "We're in a Global War on Terror, with no end in sight" - war without end? How long and cumbersome will Williams' "18% solution" Amendment be, such that it neither forces economic crisis after economic crisis nor allows for the easy circumvention of the cap it imposes?

Fourth, even if we have a working "cap", how do we avoid other circumventions. This Congress cannot borrow the $100 billion it wants to spend on something, so it budgets $20 billion per year over the next five years. In subsequent years, Congress must either reduce the budget to accommodate the spending decisions of a prior Congress, default, or spend beyond the cap. Or, rather than giving direct subsidies, Congress offers loan guarantees or loans to be forgiven in the future, not only effectively subsidizing the loan cost and interest rate but creating a risk of default to be absorbed by the taxpayer, or an obligation upon which future Congresses must again either pay or default.

Fifth, when there have been other "cap" proposals the concern has been raised, with some validity, that the "cap" will become a "minimum". An example that comes to mind is the idea of limiting CEO salary - every CEO's salary would be raised, opponents argued, to the level of the cap. In hindsight you could point out that in the absence of a cap those salaries have skyrocketed well past the proposed limits, but I do suspect that the critics would have been proved correct. And also that companies would find other ways to compensate CEO's beyond their capped incomes, just as many CEO's presently enjoy incredible perquisites that aren't technically part of their compensation packages.

Williams is an economist - he has to be able to conceive of dozens, if not hundreds, of ways Congress could circumvent his cap. The original Constitution is about 4400 words. By way of comparison, to be effective, Williams' Amendment would likely make the Internal Revenue Code and Regulations seem concise.

Let's remember, the column at issue was not written by Williams. It was written by WSJ editor Jason L. Riley. I don't dismiss the possibility that there is a lot of thought and nuance in Williams' ideas that was lost in Riley's translation. But it amazes me how little thought the author of the 'interview' and his audience at large seems to give to the various claims, assertions and platitudes served up in the column.

5 comments:

  1. You didn't mention,

    Sometimes I sarcastically, perhaps cynically, say that I'm glad that I received virtually all of my education before it became fashionable for white people to like black people," writes Walter Williams in his new autobiography, "Up from the Projects." "By that I mean that I encountered back then a more honest assessment of my strengths and weaknesses. Professors didn't hesitate to criticize me — sometimes to the point of saying, 'That's nonsense.'"

    Perhaps (I sarcastically, perhaps cynically, say) that's his reaction to the sort of praise afforded to him in that column, or the knee-jerk praise he receives when he guest hosts for Rush Limbaugh. After all, for his statement to be true, "back then a more honest assessment of my strengths and weaknesses", it necessarily means that the present reaction is less honest.

    This seems like a fair paraphrase of his "I get emails" statement: "My Rush Limbaugh Show listeners, even the black ones, like what I have to say". You might conclude from the column that, perhaps since the conclusion of his studies, he deliberately avoids contexts in which his views might be challenged by a critical audience.

    I would like to see him debate Cornell West. They could call it the "Birds of a Feather Debate".

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  2. The real objection to the modern welfare state is "we're giving money to our lessers, who don't deserve it". The economic arguments are merely camouflage.

    San Francisco has a program called "Care Not Cash", which has replaced direct subsidies to homeless persons with actual housing. Supposedly this has been helpful.

    Punitive consequences do not help people who have difficulty with delayed gratification or realistic planning - which includes both the rational but desperate ("I know I need this cash for rent, but they're shutting off my electricity tomorrow") and the not so rational.

    Much of the "War On Poverty" programs also reflected punitive and counterproductive social norms - like the no-man-in-the-house rule - and the fact that for benefits today, a spouse's income but not a boyfriend's is counted in determining eligibility.

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  3. I think it's fair to recognize that you need to treat different populations differently, and that people with cognitive deficiencies, severe illness or drug addiction that interfere with their ability to care for themselves or manage their finances will require additional support. That, of course, can be true even when they're not receiving public assistance.

    Your final point touches on something that is difficult - establishing household income, and the extent to which it should be considered when granting public assistance. A boyfriend's income can be part of household income, but it's much easier to lie about where a boyfriend lives (and get away with it) than to lie about where a spouse lives. On one hand, you don't want to give aid to people who don't need it; on the other hand you don't want to discourage marriage or make the father figure more transient. I don't know of a way to balance those two competing concerns.

    There is a context in which the data suggests you should not take both parent's financial contribution into account when determining qualification for public assistance - that of child support. When a custodial parent's benefits are reduced, dollar for dollar, by the amount of child support paid by a parent living outside of the household, the parent receiving public assistance will be slower to regain financial independence.

    One big hurdle in making meaningful welfare reforms is how to pay for them. Even somebody as far to the right as Rush Limbaugh will applaud the Harlem Children's Zone - He likes its "intrusive paternalism" - but what are the odds that he would support paying for that program to be rolled out on a citywide or nationwide scale? People like Limbaugh and Williams, who you'll recall is Limbaugh's occasional guest host, offer criticisms of the welfare state and its cost, but don't seem to have any ideas of their own for how to turn things around. And to the extent that they acknowledge somebody else's reform idea as good, they appear quite content to leave it unfunded.

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  4. Bob From District 97/18/11, 3:20 PM

    You forgot to mention one significant point. Not on Walter Williams directly, but on balanced budgets. The history of the 20th century, when about 1/3rd of years had balanced budgets is, all balanced budgets end in recession. The only exception is when war preempts the recession.

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  5. Historic data suggesting correlations, and perhaps implying cause and effect, can be important to example, but when you work with a sample size that small and carve out an exception up-front, you run the risk of making a hasty generalization.

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