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Source link: http://archive.mises.org/14437/investing-in-intellectual-poverty/

Investing in Intellectual Poverty

October 31, 2010 by

When you see an op-ed titled, “Keep children in mind while at the polls,” you know what to expect: A call for more government spending. Or, as author Mary Dunne Stewart puts it, more “investment” in our children. Stewart, who runs a group called Voices for Virginia’s Children, claims that in Virginia’s fifth congressional district alone, one in five children “are exposed to the devastating physical, social and emotional effects of poverty,” and that this “hurts everyone in Virginia.”

I don’t know how Stewart defines “poverty,” but her op-ed suggests it comes from insufficient government intervention in the marketplace. She cites the Obama administration’s recent nationalization of the health insurance industry as a positive step:

While many questions remain about federal health care reform, children clearly benefited from changes made this year. Insurance companies can no longer discriminate against children with pre-existing conditions, like asthma, diabetes or even acne. They can no longer place annual or lifetime caps on coverage.

Let’s pause right there. Stewart’s applauding the fact that the government has effectively outlawed insurance by converting it into an entitlement. Insurance implies a hedge against potential future risk; nationalization eliminates any incentive for responsible behavior on the part of individuals regarding their own health care.

Continuing with Stewart’s argument:

So, if your child develops cancer, like leukemia, you no longer have to worry that you’ll be one of the millions of Americans thrown into medical bankruptcy by insurance companies refusing to pay. And with one out of every four young people unable to find work, working and middle-class parents can have the peace of mind to know that their kids can stay on their plan at minimal cost until they’re 26.

Stewart never bothers to ask where all this health care will come from; she only cares that the people who receive it aren’t liable to pay for it. Above she concedes there are “questions” about the impact of nationalization, but then she proceeds to ignore them. In fact, her claim that children “clearly benefit” from the recent legislation is misleading. Since the law has yet to take effect fully, she can’t know whether children will benefit or not.

More importantly, Stewart is completely ignorant of the production necessary to provide the health care that must now be given away freely. All she cares about is increasing consumption. This leads to her next policy argument:

To build an educated work force, reduce crime or just make sure our kids have a chance, the best time to invest in education is early. Early education is one of the soundest investments we can make. Scientists have found that every dollar we spend on high-quality early education produces a return on our investment of about $10, and the longest-lasting effects are on kids who need it most.

There’s no delicate way to say this: Stewart is just spewing bullshit here. First off, she’s not talking about “investment” but welfare — and I don’t mean for the children. She wants more spending on government-run preschools because that means more government bureaucrats to confiscate wealth from those who actually produce for a living. As for this notion that the “investment” will pay off years down the line, I addressed this in an earlier post, and I’ll add here that there if Stewart really was talking about investment, she’d know there’s no such thing as a guaranteed long-term return. Substitute “tech stock” for “children” and you’ll see what I mean.

(I’d also note Stewart’s vague invocation of “scientists” — an obvious attempt to imply there’s a scientific consensus, which there is not — is the sort of misleading claim that gets private businesses in trouble with government lawyers all the time. Not that I think Stewart committed a crime; I’m simply observing that public policy advocates are held to much lower standards of “truth in advertising” then your typical business owner.)

Finally, Stewart says we must continue to “invest in programs that feed hungry kids,” e.g. the federal government’s school lunch and school breakfast programs. Again, she’s not talking about investment, but welfare for a non-child interest group. As Jim Grichar explained in a 2004 article,

The food stamp, school lunch, and other food welfare programs were ostensibly set up to provide subsidized food for the poor or disadvantaged or assuring that school children were not malnourished. The real rationale was to provide back-door support for food prices and assure that no one would ever attempt to abolish such welfare. Eliminate all these food welfare programs and food prices will drop. Americans were not starving before the advent of these programs, and they will not starve after these programs are abolished.

The critical sentence is: “Eliminate all these food welfare programs and food prices will drop.” It speaks to a conceptual framework that Stewart cannot grasp. For all her talk of helping uninsured, uneducated, malnourished children, Stewart seems to lack any curiosity about the causes of this purportedly rampant poverty.

We know the truth: There is a lack of production due to decades of government plundering of the economy. A major component of this plundering is the forced institutionalization of children under the government’s watch, i.e. “public schools.” All of Stewart’s pet policies would exacerbate this problem. She wants children institutionalized at an earlier age, dependent on government for their nutrition, and tethered to their parents’ “insurance” until the age of 26. None of this adds up to an “investment” in independent, productive adults.


Seattle November 1, 2010 at 9:21 am

Pfft. Mr. Oliva, we all know that production of goods is a constant output function. If only those poor saps would stop putting all of their money under their mattresses more of it would be given out as wages!

bob November 1, 2010 at 2:12 pm

yeah, and lower consumer prices don’t serve the poor – it just means the poor get lower quality goods that someone else still had to pay for!


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