I PERSEVERE. It took 25 years for my inquiry about a roller coaster at Bay Beach Amusement Park to catch on, and I have been beating the drums for faster Hiawatha service for at least five years. On and off, I have been informing readers about the form school choice takes in the U.S.

And note the way in which school choice with government schools works. You do have school choice, provided you're willing to pay the premium for the house in the better school district. And the right preschool?

And when Megan McArdle took it up, I was able to go one better. Here's the McArdle version.

Actually, this makes me think that a lot of the opposition to vouchers is about that affluent suburbanite's need to maintain the delusion that they care about inner city public schools. Memo to suburban voucher opponents who "support public education": you're already sending your kid to private school. You're just confused because your tuition fees came bundled with granite countertops and hardwood floors.

And my extension:

That reminds me of McCormick, Shughart, and Tollison's 1984 "The Disinterest in Deregulation," wherein the rents are concentrated and the welfare gains small and costly to collect. And yes, genuine competition among school districts is likely to bring in its train some capital losses to current homeowners whose mortgages include that test-score premium in the house price.

Now, via The Bellows, comes a conversation that touches on all these points.

Kevin Drum highlights a really regrettable defense of public schools that goes as follows. School systems are neighborhood-based, and so the benefit of good schools is capitalized into home prices. Households that care about education are willing to pay for good schools while those that don’t, aren’t. Freedom! Or something.

It's not that simple. Prices ration access to scarce resources. It's quite possible that the price of a bundle consisting of that McMansion and a good school district is high so as to encourage self-selection. (It might have been Walter Bagehot who made a similar observation about first- and third-class train fares in England, although in that case he claimed the railroads, er, railways, degraded the third-class service so as to discourage the richer passengers from riding on the cheap.) There's analysis along those lines in The Bellows.

The conversation about education policy appears to have begun here.

That is, parents have the right to settle in whatever school district they choose. (They also have a constitutional right to send their children to private school if they wish.) Predictably, therefore, those families willing to pay the most for a good education gravitate to the best schools, the “price” of which is reflected in the cost of real estate and local property taxes, while the families that care the least about education gravitate to the worst. Meanwhile, the extent to which parents value education itself enhances (or degrades) school quality, as schools are always more likely to thrive when they can attract the families with the highest social capital. Thus, good schools and “good” (that is, education-valuing) families cluster together. So long as Americans enjoy freedom of movement, supply and demand will always tend to produce a huge gap between successful and failing schools. The outcome is basically fair and not altogether inefficient.

It's not clear that there has to be a huge gap between successful and failing schools. There's nothing inherent in Tieboutian competition among jurisdictions that requires a wide range of outcomes. (An educational establishment that aggravates tension between education-valuing families and families with other objectives by mainstreaming slow learners and troublemakers, or by enabling disruptive behavior as a cultural difference, will produce more pressures to outmigrate.)

School vouchers, for example, a favorite policy of “accountability” proponents, punish those very school systems that have already worked very hard, thank you very much, to attract the best students and most civic-minded parents. (It’s no surprise that vouchers have proven to be politically unpopular, including if not especially among Republican voters.) Similarly, shutting down failing schools and redistributing their students punishes those schools that have performed marginally better and thereby attracted marginally better students and parents. The “accountability” movement, in short, wants to equalize the quality of educational products, no matter the price paid for them. Whatever this merits of this policy, it surely does not show much faith in the free market.

And here, the author conflates two effects. Vouchers have the potential to inflict capital losses on homeowners who are currently buying a Tieboutian bundle including good schools, with those higher College Board scores capitalized into the house prices. They also have the potential to encourage favorable self-selection. At the margin, vouchers and transfers need not transform the equivalent of a Milwaukee Hamilton of the early 1970s into the dropout factory that it is today, basketball success or not.

This essay gets to the heart of the matter.

If we really want better schools in the areas that have the poorest results, we’ll have to fix communities first. And communities will need to do that from the ground up, not Washington down. That’s no simply task, but it is at least more realistic than thinking we can fix schools through federal legislation or by issuing standardized tests or pushing all students toward higher education or by sucking money from the public schools and redistributing it into private ones.

To do so would require the colleges of education to lose their fascination with Rousseau and understand their objective as preparing teachers to develop the habits of the middle class in youngsters. Oppressive as that sounds, it is less oppressive than allowing youngsters to believe that anything goes.

It appears as though Kevin Drum at Mother Jones is catching on.

Or, on a more serious note, we could fund poverty and educational interventions with proven track records, allow schools more leeway to deal with incorrigible students, encourage our best teachers to work in our most challenging schools and allow principals to fire the ones who fail, promote experimentation via charter schools, and make sure every school is adequately funded. Feel free to add your own favorite ideas to this list. It's a little messy and it's no silver bullet — it's a long, hard slog, if you will — but these are the sorts of things that will eventually make a difference. Best of all, some of it is even politically feasible.

It's more important that the right things be done than that I get credit for it.

I'M GOING TO HAVE TO LOOK FOR THE SELECTION EFFECTS.

Corey DeAngelis, an affiliate of Reason Foundation and Cato, asserts, "Yet another study shows school choice programs reduce crime."  Not just any studies, either: Harvard working paper, Quarterly Journal of Economics, Social Science Quarterly.  School assignment might be by lottery, but somebody has to sign the kids up for the lottery.

Read on and ponder.

Traditional public schools hold significant monopoly power because of residential assignment and funding through property taxes. Families upset with the quality of their public school only have three limited options: They can purchase an expensive new house that is assigned to a better public school, pay for a private school out of pocket while still paying for the public school through property taxes, or complain to the school leaders and hope things change.

Because these options are expensive and inefficient, there is not a lot of pressure for residentially-assigned public schools to provide the best character education possible. In contrast, private and charter schools must cater to the needs of families if they wish to remain open.

School choice puts power into the hands of families. And families usually know what’s best for their own kids.

The selection effect is particularly salient given that compound noun, "character education."  Residentially-assigned public schools in prosperous neighborhoods, which is to say where your good school comes bundled with a granite countertop, tend to be public schools where bourgeois norms are honored in the observance, no matter how woke the residents might pretend to be.  Thus, the people who have the means to buy the bundle tend to be people who insist on their common schools doing a proper job.  (Put another way, the expensive house buys the equivalent of a high-status private school with school leaders accountable to the constituents.)

That's where that "families usually know what's best" matters.  The sentence presupposes some semblance of a family: not necessarily the case in the poorer quarters where serial shacking up might be the way people exist, and frequent moves might accompany the domestic turmoil.

That makes comparing like-with-like in school districts offering charter schools harder.  "School choice could also reduce crime by matching students to schools that interest them, and by exposing students to peer groups and school cultures that discourage risky behaviors." What we might be seeing is that the parents most interested in passing along responsible habits to their children are reinforcing those habits in their children and doing what they can, including signing up for the charter schools, to obtain institutional support, including in the form of classmates to interact with.

A FREE STATE TO MY WEST.

Iowa's governor, Kim Reynolds, was not as lockdown-happy as her counterparts in Minnesota, Illinois, or Wisconsin.  She, too, was re-elected, and the political realignment that has taken place in Iowa provokes some Official Washington chin-pulling that somehow doesn't once mention that sort of freedom.

During last year’s midterm elections, Iowa bucked the national trend and delivered a commanding victory for Republicans — reelecting Reynolds, flipping the one remaining House seat held by Democrats, winning all statewide offices save one and widening GOP majorities in both the state House and Senate.br>
Political analysts in the state say that Iowa’s swing has solidified over the past seven years as reliably Democratic working-class voters abandoned the party in favor of Donald Trump’s message, and the state’s large percentage of independent voters also moved toward the Republicans.

It gets better. Did you know, dear reader, that party discipline is a form of dictatorship?

Reynolds, who was reelected to her second full term in November with Trump’s endorsement, has helped drive the state’s rightward tilt, shifting to focus on culture-war issues, gun rights and limits on abortion access. Critics accuse her of using her agenda to burnish her conservative credentials for the national stage in 2024, although she has so far said she has no intention of leaving Iowa.

At a February appearance at a raucous town hall co-sponsored by Moms for Liberty — the Florida-based group that has campaigned for book bans across the country — Reynolds celebrated her school choice victory and portrayed herself both as a grandma of 11 and a warrior against the “radical left.”

“They think patriotism is racist and pornographic library books are education,” Reynolds said, speaking over shouting protesters and supporters chanting “U.S.A., U.S.A.” “They believe that the content of our character is less important than the color of our skin. They believe that children should be encouraged to pick their gender and the parents, well, they’re just in the way.”

Reynolds, 63, the former lieutenant governor, was elevated to governor in 2017 when business-oriented conservative Terry Branstad was named Trump’s ambassador to China.

A prime example of her activist approach is seen in education measures. She had long pushed for a school voucher program as the centerpiece of her agenda as governor. But two earlier bills failed to make it out of the Iowa House, over objections of Republicans whose constituents have no access to private schools in rural areas and where consolidation remains a constant threat. About 40 percent of Iowa counties have no accredited nonpublic schools, according to a state report.

So last year Reynolds took matters into her own hands, supporting a half-dozen primary opponents of recalcitrant Republicans, including the chairman of the House’s education committee, Dustin Hite, who, along with others, lost to a more conservative candidate.

With a new school-choice-friendly majority in place, an expanded version of the legislation passed easily in January. When fully implemented, it will allow all Iowa families to use taxpayer-funded “education savings accounts” for private school tuition, costing the state $345 million a year, according to a state analysis.

Such interference by a sitting governor was “unprecedented” in Iowa, said Melissa Peterson, the legislative and policy director for the Iowa State Education Association.

“That’s a red flag when your head of government is primarying her own party. It is an indication that the ideologies are becoming more extreme,” said Kelly Shaw, the former nonpartisan mayor of the town of Indianola who now teaches political science at Iowa State University. “The governor has effectively removed her opposition, and that is pretty extraordinary.”

The loyal opposition is supposed to come from opposition parties, not from within the governor's own legislative caucus.  If the party establishment is imposing unreasonable purity tests, doesn't that give the other party opportunities to go after disaffected voters?  Or are we concealing the narrative that the Iowa Democrats are in microcosm the same sort of freak show that the national Democrats have become?

“My own personal feeling is that we’re moving from a purple [state] because the message the Democrats are using is not the message the average Iowans want to hear,” said state Rep. John H. Wills (R), who helped shepherd the governor’s school choice bill through the legislature. “I think in general Iowans support all Iowans but not teaching those types of things in third grade and having underage people doing transition surgeries and taking hormone blockers. We’re trying to be supportive of all Iowans but the other side is happy to promote the most egregious, far-left agenda and that is where we are at.”

Iowa, in common with several other Big Ten states, is a net exporter of people with college degrees, and some deep thinkers are sounding the alarm that the state is becoming less friendly to university graduates with metrofexual sensibilites.  I suppose that's a possibility, and yet, your rainbow culture environment might come bundled with hobo jungles.

ON MY NIGHTSTAND. Warren and Tyagi's The Two-Income Trap: Why Middle-Class Parents are Going Broke (details or compare prices) has come out in paperback. I will have more to say about its conclusions when I finish, but let me offer the following by way of prologue.

Ultimately, however, it did not matter whether there was a meaningful gap between the schools in the center cities and those in the surrounding suburbs, or whether the streets really were safer far away from the big city. It didn't even matter whether there really was a crisis in public education, as the politicians and the local news might insist. What matters was that parents believed that there was an important difference -- and that the difference was growing. The only answer for millions of loving parents was to buy their way into a decent school district in a safe neighborhood -- whatever the cost.

That's page 28. I'm glad to see the argument that there is school choice -- it comes bundled with a house purchase -- is getting broader circulation. There's more, in the next paragraph.

And so it was that middle-class families across America have been quietly drawn into an all-out war. ... Their war is a bidding war. The opening shots in this war were fired in the most ordinary circumstances. Individual parents sought out homes they thought were good places to bring up kids, just as their parents had done before them. ... Millions of parents joined in the search for a house on a safe street with a good school nearby. Over time, demand heated up for an increasingly narrow slice of the housing stock.

Or perhaps midwived sprawl, although there has to be a gold mine of research topics dealing with the expansion of school districts perceived as "good." What is the supply elasticity of teachers? Let me return to the book.

This in itself would have been enough to trigger a bidding war for suburban homes in good school districts. But a growing number of families brought new artillery to the war: a second income. In an era when the overwhelming majority of mothers are bringing home a paycheck and covering a big part of the family's bills, it is easy to forget that just one generation ago most middle-class mothers -- including those in the workforce -- made only modest contributions to the family's regular expenses.

You just can't avoid the Say Aggregation Principle. It's only logic.

But what is really impressive is a suggestion that surfaces at page 33.

In order to free families from the trap, it is necessary to go to the heart of the problem: public education. Bad schools impose indirect -- but huge -- costs on millions of middle-class families. In their desperate rush to save their children from failing schools, families are literally spending themselves into bankruptcy. The only way to take the pressure off these families is to change the schools.

The concept of public schools is deeply American. It is perhaps the most tangible symbol of opportunity for social and economic mobility for all children, embodying the notion that merit rather than money determines a child's future. But who are we kidding? As parents increasingly believe that the differences among schools will translate into differences in lifetime chances, they are doing everything they can to buy their way into the best public schools. [Colleges, too, although the premium to attending a name college is small to nonexistent. This book will be good for several week's worth of posts.[ Schools in middle-class neighborhoods may be labeled "public," but parents have paid for tuition by purchasing a $175,000 home within a carefully selected school district.

I like it when the bundling argument gets where lots of people, possibly some with more influence than I, might read it. I also like thos (p. 34)

A well-designed voucher program would fit the bill neatly. A taxpayer-funded voucher that paid the entire cost of educating a child (not just a partial subsidy) would open a range of opportunities to all children. ... Fully funded vouchers would relieve parents from the terrible choice of leaving their kids in lousy schools or bankrupting themselves to escape those schools.

And here, in a neat form, is the choice argument packaged with an egalitarian argument. Haven't I been ringing these changes for years?

More, much more, once I finish reading the book.

I'M ALL RIGHT, JACK.  There is school choice in the United States, with the price of admission bundled with a fancier house.  Joanne Jacobs finds two articles that address the disinterest in school choice among people satisfied with their own schools.

Upper-middle-class parents aren’t rallying to reform the schools, writes Lewis Andrews inThe American Spectator.  Affluent parents are getting the schools they want, responds Mike Petrilli.  The question is whether they’ll support reforms to help other peoples’ children. If those reforms — think test-based accountability — hurt their own children’s schools, they’ll resist, he argues.

Mr Andrews suggests that the wealthy districts spend money on fluff.

Suburban parents have always been ready to mob a school board meeting to agitate for improved athletic facilities, but never for teacher evaluations or merit pay. The PTA will mobilize families and schools to support the most controversial social movements, from gay rights and gun control to affirmative action and costly accommodations for the disabled, but not a peep about the pressing need to save urban children from failing schools.

His contention is internally inconsistent, as he goes on to complain about those same districts spending local money on some of the same things the poorer districts rely on other jurisdictions to provide.  Ultimately, though, he misses the mark.

Suburban parents are unlikely to ever give up their luxuriously appointed classrooms and handsome athletic fields, but, as Upton Sinclair discovered almost a century ago, they will be the first to remedy a clear demonstration of local dysfunction, especially when coupled with options for improvement. If any force has the potential to reform the traditional public school, it is the righteous indignation of a rudely awakened upper-middle class.

The problem, precisely, is that what's left of the upper-middle class remains insulated from the failings of other school districts. And perhaps that remnant participates in the positional arms race for universities so as to shelter their children from the products of those failing school districts in less selective universities.

At Flypaper, Mike Petrilli disagrees with Mr Andrews in a way that makes sense.

The No Child Left Behind backlash in the suburbs isn’t due to concerns that the law isn’t working to fix urban education. Plenty of evidence shows that it’s helped. The anger comes from a feeling that the federal law is starting to make affluent public schools worse–or at least worse in the eyes of their customers. If a principal asks a beloved teacher to scrap her favorite unit on dinosaurs or poetry or jazz or whatever in order to make room for test-prep, you better believe the affluent parents are going to be mad. As well they should be. Mandating statewide, test-based teacher evaluations will only make the situation worse.

Smart policy would treat different schools differently. It would be more surgical, focusing tightly on schools that are clearly in distress, and offering benign neglect to the others. Ironically enough, the way to get upper-middle-class parents engaged in school reform is probably to leave their own schools alone.

Or, to achieve the same effect, don't make the upper-middle-class parents opponents of improvements in underperforming school districts by applying a one-approach-fits-all-schools policy, such as No Child Left Behind, which implies the dual proposition, No Child Gets Ahead, or, as a friend puts it, All Children Left Behind.

DEVOLUTION MIGHT BE THE BEST WAY TO HEAD OFF CIVIL WAR.

The signs and portents were present five years ago.

When voices left, libertarian, and right raise similar objections to an established order, might that order be in trouble?

That voices left, libertarian, and right see different ways to replace that order, suggest troubling times might be ahead.

That was before the Ukraine-inspired impeachment inquiry, the corona tyranny, and regional wars simmering if not underway in the bloodlands and in Asia Minor.

SHE DOESN'T HAVE A PLAN FOR THIS.

"Notable and Quotable" in The Wall Street Journal finds a quote from Elizabeth "Fauxahontas" Warren way back in December, 2003, probably on a day when public radio's programming was more soporific than normal.  She was talking about people rendering themselves house-poor as a way of exercising school choice, perhaps commenting on the research that later made its way into The Two Income Trap.  "They're trying to buy schools.  The public school system has failed middle-class families, especially anywhere near metropolitan areas.  And so, unlike a family a generation ago who could buy a house based on what they thought they could afford and then send the kids to the school down the street and count on everything working out, today's family shops school district, school district, school district, school district.  And the problem is they're paying a real premium for it."

Yes, school district test scores are capitalized into house prices, and yes, often, your good school district comes bundled with a granite countertop, that being the way positional arms races work.

The problem is half a century of technocratic interventions in which the middle classes had to bear the brunt of mainstreaming the delinquents and desegregating the neighborhood schools didn't work out so well.  Those who could get out, got out.

GETTING THE FUNDAMENTALS RIGHT.

An Inside Higher Ed report assesses access, remediation, and retention. The report has the provocative headline, "Double Whammy of Disadvantage," with the following elaboration.

Students who are both low income and first generation are far less likely than their peers to transfer; six years after starting at public two-year or for-profit colleges, only 26 percent of low-income, first generation students have transferred anywhere else, compared to about 40 percent of those who are either first generation or low income and 62 percent of students who are neither. The numbers who have transferred to four-year institutions are even lower — 14 percent for low-income and first-generation students, 25 percent for those who are one or the other, and 50 percent for students who are neither first generation nor low income.

And first-generation, low-income students are one fifth as likely — 11 percent compared to 55 percent — to have earned a bachelor’s degree after six years as are students who are neither low income nor first generation.

“For too many low-income, first-generation students, the newly opened door to American higher education has been a revolving one,” said Vincent Tinto, a Pell Institute Senior Scholar and distinguished professor of higher education at Syracuse University, who worked with [Syracuse's Jennifer] Engle on the new data. “The unavoidable fact is that while college access has increased for this population, the opportunity to successfully earn a college degree, especially the four-year degree, has not.”

After a few tables supporting the prima facie case, the report elaborates,

A broad mix of factors — financial, cultural and academic — may account for the underperformance of low-income first-generation students, the Pell Institute’s data show. The students come into college with many more of the risk factors that researchers have widely embraced as diminishing college success, including delaying entry into postsecondary education after high school, attending college part time, working full-time while enrolled, having dependent children, being a single parent, and having a GED. The average first-generation/low-income student has three such risk factors, while the average student who is neither first generation nor low income has one.

Next come some policy recommendations.

But recognizing that significant numbers will continue to choose to attend two-year or for-profit institutions, or to have no choice but to do so, Engle and her fellow researchers offer a set of recommendations for those institutions and state and federal policy makers. Among them:

• Strengthening academic preparation for college, such as greater access to quality college prep classes and better information about college “gateway” courses while students are still in high school.
• Increasing financial aid for college.
• Improving transfer rates to four-year colleges, by strengthening transfer counseling and developing favorable articulation policies and agreements.
• Easing the transition to college, through better bridge/orientation programs and special programs for at-risk popultions.
• Encouraging engagement on the college campus, including by creating better work study policies to let students work on campuses.

That's more of the same failed policies that have led to the retention problems in the first place. I've gone on and on and on about the common schools abdicating their onetime mission of inculcating the habits of effective people, and I continue to maintain that special programs for people who have bad life-management skills that are not crash courses in developing proper life management skills will waste resources.

CREATING DROPOUT FACTORIES. The tussle over school vouchers continues.

Actually, this makes me think that a lot of the opposition to vouchers is about that affluent suburbanite's need to maintain the delusion that they care about inner city public schools. Memo to suburban voucher opponents who "support public education": you're already sending your kid to private school. You're just confused because your tuition fees came bundled with granite countertops and hardwood floors.

That reminds me of McCormick, Shughart, and Tollison's 1984 "The Disinterest in Deregulation," wherein the rents are concentrated and the welfare gains small and costly to collect. And yes, genuine competition among school districts is likely to bring in its train some capital losses to current homeowners whose mortgages include that test-score premium in the house price. But it doesn't have to be those upscale accessories. Take Milwaukee Hamilton, onetime flagship of the public system, now borderline dropout factory. More than a few parents, including my own. purchased new houses in that area in anticipation of having a new high school when their kids came of age. More than a few of those kids, based on the (admittedly unscientific) observations I've been able to make, have purchased houses in nearby suburbs that, while pleasant, aren't in the granite countertop class. But yes, we do have school choice in the United States. It comes under the rubric of residential location, with the attendant self-selection tradeoffs.

There's a differing perspective on the voucher argument, with more than spirited bull sessions in progress.

ROUND AND ROUND ON SUMPTUARY LAWS. Arnold Kling has taken issue with recent writings by Cornell's Robert Frank on measured happiness and positional arms races. The passage that sets off Mr Kling reads,

The evidence thus suggests that if income affects happiness, it is relative, not absolute, income that matters...In most cases, the person who stays at the office two hours longer each day to be able to afford a house in a better school district has no conscious intention to make it more difficult for others to achieve the same goal...Yet the ineluctable mathematical logic of musical chairs assures that only 10 percent of all children can occupy top-decile school seats, no matter how many hours their parents work.

Mr Kling suggests, instead,

Suppose that in order to try to illustrate his thesis, Professor Frank had used as an example a person who stays at the office two hours longer each day in order to pay for a tutor for a learning-disabled child. This example leaves us favorably disposed toward the parent, whereas Frank's example does not. Because Frank talks about educational opportunity as a relative concept, and above all because he talks about trying to get into the top decile, he is able to manipulate the reader into seeing the hypothetical parent's choice as a vain and futile quest. Thus, Frank is able to insinuate that working extra hours to try to pay for a better education for your child is pathological behavior.

To put it another way, if every parent were competing to give our children the best possible education, and that resulted in better education for everyone, that would seem rational and constructive. But in Robert Frank's morality play, the main characters are compulsively competing for the highest relative status, with no actual improvement in education. In an essay (based on a book) where he claims to be speaking from scientific authority, Frank stoops to proof by loaded example.

Reality is probably somewhat more complicated (although it's OK for economists to invent worlds that can't exist so as to better be able to grasp the essential elements of the world that does exist.) Consider the latest from suburban-dwelling 11-D, missing something from the party platforms.

I wanted more discussion about the vast debt that American families have encurred to achieve a good life for their kids. Housing costs, schools of uneven quality, growing demands of the workplace, the lack of support from extended family or community are a tightening tourniquet on average Americans.

The reality is that people do have to compete for the highest relative status, and one driver of that competition is the quest for the better school districts, which often come bundled with more expensive housing, reflecting both the positional arms race (more income shifts the demand curve) and the principle of complements (the demand for the houses derives from the demand for the schools.)

Brock at Signifying Nothing weighs in with some observations about the usefulness of happiness research as a way of improving economics, a point somewhat orthogonal to that part of Professor Frank's argument being questioned by Mr Kling. Marginal Revolution offers some additional perspectives on happiness research.

Tech Central offers elaboration on the original debate, with Radley Balko proposing to Stop the World.

I propose that Congress pass the Saving Our Public Health from Innovation, Success, Trade, Riches, and Yearning bill, or the SOPHISTRY Act. On the day it's signed by the president, SOPHISTRY would license the federal government to freeze all salaries, wages, and other sources of income among the poor and lower middle class, thereby preventing any dangerous upward mobility between tax brackets. Any income earned above a citizen's current tax bracket would be taxed at 100%. All revenue from the tax would be specifically earmarked for the study of the affluence threat. The freeze would stay in effect until scientists can determine the cause of the link between prosperity and mortality.

Because wealth begets an increased chance of death, the SOPHISTRY Act will undoubtedly save thousands of lives. Perhaps millions. We owe it to America's poor to keep them poor until we can figure out why getting richer makes them die. And while critics might contend that Americans ought to be free to decide for themselves whether a bit of extra income is worth the deleterious health effects that come with affluence, it's obvious that at least so far, they simply aren't deciding correctly. Despite the obvious implications of the data above, Americans still insist on bettering their respective standards of living.

And when people make poor decisions about their own lives, it's government's job to make the correct decisions for them.

There is an open thread on the subject of happiness research and positional arms races at Econ Log.

GET INVOLVED. Betsy at Betsy's Page reaches the young.

Both my husband and I have found that when we explain to our students in college and high school how the Social Security system actually works today and how it would work with private investment accounts, they are overwhelmingly in favor of allowing individuals the right to invest some of their Social Security in the markets. This is not only the right thing to do - it's a winner politically if it can be made clear to people so that they can evaluate the demagoguery that the AARP will throw at the idea.

A linked David Brooks column spells out the stakes.

This is not 1932 any more. This is not the age of big, static state institutions. This is actually about building a bridge to the 22nd century.

Two historians at Northwestern University have not yet grasped the message.

Social Security has served the nation well for 70 years and will continue to do so unless ideologues ruin it in the name of "fixing" it. Not only does Social Security not need the radical changes proposed by the Bush administration, those "reforms" will destroy the principles upon which this admirable system of social insurance was founded.

OK, tell us how you really feel.

Social Security was established in 1935 above all to prevent the elderly from falling into dire poverty. Private schemes for supporting the retired had failed badly--corporate pension plans went bankrupt, stock market portfolios melted away. Hence, the nation already has had experience with "privatized" retirement, an experience that ended disastrously with the onset of the Great Depression.

Talk about ideas preserved as if in amber. But look carefully at that final sentence. Its logic: There was a Great Depression. Private pension plans went bust. Therefore, private pension plans ought not replace Social Security. There's just one little problem with the argument. Social Security is not depression-proof either. It uses current payroll taxes to support current retirees. A depression is a situation in which people are not working, which a fortiori means smaller payrolls to tax. Keep that in mind as you read on.

The underlying principles of Social Security are a kind of social contract that is both intergenerational and intragenerational. That is, those who are working pay the benefits of those who have retired; and those who have never done paid work (widowed homemakers and dependent children, for instance) receive benefits from those who have worked or still do. Benefits vary according to salary-based contributions, but they are nevertheless progressive: Those who have earned the lowest wages enjoy a proportionally higher benefit. These noble principles assure that everyone who pays Social Security taxes helps care for everyone else, in return for the younger generations' help when we can no longer work.

I rather like Econo Pundit's characterization of this funding scheme:

Now imagine highway #2: a perpetually deteriorating tollway which must be feverishly maintained 24 hours a day, 7 days a week, crews constantly on the job. And here's the problem: the maintenance crews are financed by current tolls. If lots of cars are crowding to get onto the tollway maintenance crews are well-financed and the highway runs smoothly. Once all those cars crowd onto the highway and few new entrants provide new tolls, well, things kind of slow down.

Furthermore, those who have earned the lowest wages will collect a proportionately higher benefit for as long as they live. Longevity is a normal good. If I wanted to be cynical, I could suggest that Social Security's survival relies on the early deaths of some of its members. The historians' argument simply rephrases the old defense of an underperforming pension plan as an underperforming survivors and disability insurance plan bundled with it. And at least one Chicago area pensioner doesn't buy the intergenerational compact.

When I was working, I paid into the Social Security system every week. I had no choice; the money was deducted before I ever saw it. This was no problem for me, because I understood that my turn would eventually come to receive my Social Security after retirement.

I, and many others like myself, played by the rules.

Now that I am retired, I find that the payment that I receive is nowhere near enough to live on, let alone be socially secure. Fortunately I saved money in an individual retirement fund and a few investments.

Today senior citizens live much longer than the Social Security Administration planned on, so the system is going broke.

No doubt my Northwestern colleagues would reject this pensioner's counterexample.

Not only does the Social Security system operate efficiently and without corruption, it is essential to the standard of living of millions of elderly Americans. According to the Century Foundation, a leading research institute, it provides more than half of the income for more than 60 percent of families headed by someone 65 or older; and some 12 million households get 90 percent or more of their total incomes from Social Security.

On to the substance. Perhaps some of those pensioners would have a bigger pension had there been a real lockbox, otherwise known as their own account, to draw on. To suggest that, however, is only slightly less evil than wishing an atheist "Merry Christmas."

Those who wish to allow workers under 55 to set up private investment accounts with at least part of their Social Security taxes argue that the system is in crisis and must be reformed. They claim the coming retirement of the Baby Boomers will bankrupt the Social Security Trust Fund, which holds the premiums we pay each month. They assert that partial privatization is the way to save the Trust Fund because the benefits eventually paid to those with private investment accounts can and will be reduced. But these claims are false on two grounds.

First, the system is not in financial crisis. Economists and actuarial accountants have studied the problem every which way from Sunday, and the most reasonable estimates conclude that the Trust Fund, which has a huge surplus at present, will be able to pay benefits at the currently enacted rates (which increase with inflation of wages) through 2042. Minor adjustments to such factors as the age of retirement, the level of benefits, extending the payroll tax to those not now included or raising the ceiling on taxable income (or some combination) would secure the Trust Fund through 2075.

Second, it is obvious that allowing millions of workers to divert all or part of their Social Security taxes from the general Trust Fund into personal accounts would cause a massive deficit in the Trust Fund and actually generate the crisis that is falsely predicted. Even the White House and its conservative allies in Congress admit that partial privatization of Social Security would cause a huge "transitional" problem--the gap between Social Security intake and outflow until the reduced benefits under the new system would take effect. President Bush has not said how he would pay for that gap, but an increasing number of members of Congress say it would have to be paid for by massive government borrowing. Experts estimate that such borrowing would amount to about $2 trillion or more, on top of the total national debt of about $7.5 trillion. Given the current shakiness of the dollar, those "transitional" costs would be dangerous to the whole economy.

Let's take those points seriously. The first point says that today's entrants to the workforce face a depleted Trust Fund upon their retirement (2042-2004=x, where x is left to the reader as an exercise) which can be fixed by effectively cutting their pensions (means-testing, benefit cuts, delayed retirement, higher payroll tax rates, or raising the maximum salary subject to tax all do that) or by confiscating the vested pensions of workers currently exempt from Social Security tax, including Illinois state university employees. Oh, and if there is a serious recession or a depression, all those long term forecasts of current revenues are worth precious little. The second point complains that a contingent liability -- benefits to be paid out of future tax revenues -- converted to a known liability -- securitized pensions -- is dangerous. Did these guys work for Arthur Andersen? There is a more thorough and link-rich send-up of the phoney transition cost problem at Constrained Vision. Go there now or go there when you finish. I'm not done smacking these guys around.

Yes, Social Security will face a shortfall eventually. This is simply the nature of insurance schemes, which in turn make adjustments.

When hurricanes overtax homeowners' insurance, rates and deductibles go up and future payments go down. When private retirement pensions are inadequately funded, government agencies force companies to increase contributions. In other words, we adjust to changing resources and needs without destroying the underlying principles. We do this all the time in national life. We don't shut down the Defense Department or move its funding to private sources when expenditures soar and national deficits rise. When the highway trust fund falls short, Congress renews appropriations for it. We make reasonable adjustments to keep essential entities going. The entire federal government continues to operate despite enormous shortfalls and, in fact, Social Security already has made many adjustments to adapt to the nation's changing demographics and economy.

More important, allowing the establishment of personal accounts with Social Security premiums would violate the intergenerational and intragenerational social contract on which Social Security was founded. This social contract stands for mutual support, while personal accounts represent a completely different idea: self-interest. The main argument for personal accounts is that smart investors could earn more for themselves than the current Social Security plan would yield. Apart from the facts that investment in the stock market is always risky and that workers can set up private investment accounts with their own money now, the personal account proposal for diverting Social Security taxes would reduce benefit payments for the great majority. Is that what Americans really want to do? In an already atomized society, do we want to further sever our bonds with each other?

Sigh. Contracts, and mortgages, and investment clubs, all provide social bonds. In your Superintendent's view, those bonds, which act on gains from trade, are preferable to political bonds, which in the case of Social Security involve the theft by the current oldsters of the current youngsters' future. At least the professors didn't invoke Halliburton, which comes to mind when somebody raises the notion of privatizing the War Department. I would also guess that these people never met Lynne Kiesling, given their ignorance of privately financed highways.

RUNNING EXTRA: Katie at A Constrained Vision links to this post with some additional observations, including a Good Question.

We are far more certain about an impending Social Security crisis than we are about an impending global warming crisis, yet folks on the left tell us to worry more about the latter than the former. If they abandoned this illogical position, our children's futures would be much brighter.

Worry. Don at Left2Right frets about visible theft by current oldsters from future youngsters. The title of his post, "Don't Tax: Spend Anyway" introduces a complaint about rising discretionary spending by the national government coexisting with tax cuts. Money quote:

The real problem is that we are plundering future generations, who have no democratic voice at all.

Wrong. The real problem is that we are depriving future generations of economic growth that they could have, if we converted a contingent liability of unknown size (the unfunded obligations of Social Security) into a securitized liability that provided genuine savings for genuine investment. That would reduce the dependence on Japanese savers that Professor Herzog fears.