Wednesday, October 13, 2004

More Welfare

I'll post more on this when I have the time, but I want to point out a couple of things on the Klinkner posting on welfare:

a) Even assuming we believe that there are these dark racial underpinnings to welfare (and I think the issue is more complicated than Klinkner suggests, as I argue in my book, Whose Welfare?), that doesn't solve the problem of what you do about it. Do you just hector people about how their opinions are poisoned by racism? Or do you drain the poison by reforming the program (preferably on your own terms, as Clinton tried--not hard enough--in his first two years) and liquidating it as an issue? I say the latter;

b) Klinkner didn't even try to respond to the real point of the post, which was the actual policy consequences of welfare reform. One can believe that there were lots of creepy motivations for people to want to reform the program, and still think that reforming it was, on balance, good for poor people.

c) On that point, the reason to care about "moral hazard" is exactly the reason expressed in classical uses of the term in economics--that it creates a wedge between an individuals long-term interests and his/her short-term incentives. I actually think the psychology of long-term welfare receipt of welfare is more complicated than what is grasped by economic metaphors, but this one is reasonably useful in explaining, in brief, the basic issue. As one of the commentators noted, there is no moral hazard is Social Security if we expect everyone to retire at 65 anyways. And I also agree with that commentator that the more we come to expect older people to work longer, the more the moral hazard issues in SS come to the fore.

d) Polemically, I'd note that this shows a serious problem with political scientists, which is a preference to avoid talking about policy issues in terms of their real effects, and a corresponding preference for dealing with them strictly at the level of public opinion, which doesn't tell you anything about what you should actually do on the ground.

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