Public Policy and Governance

Unintended Consequences

One of the trickiest problems facing policymakers is the risk of unintended consequences. Even policies passed with the best of intentions can produce very negative outcomes, often to seemingly unrelated issues. Good policy decisions rest both on proper diagnosis–that is, a thoughtful and informed analysis of the problem to be solved and its causes–and on recognition of the effects a proposed policy change might have on other areas of American life.

Those two requirements of sound policymaking–proper diagnosis and an understanding of what we might call the “inter-relationship” of policy areas–require policymakers to be competent and informed. Enormous damage can be done by ideologues impatient with pesky realities, or self-important ignoramuses acting with limited understanding..

Considerable harm can be done unintentionally by people who lack the knowledge necessary to see the probable consequences of their ignorance. What makes the coming Trump administration so terrifying is that it is composed almost entirely of such people.

Trump himself is clearly unable to understand the logical outcomes of his threats–think his love affair with tariffs, which would vastly increase inflation, or the effects of his plan to deport millions of immigrants, many of whom American farmers rely upon to pick their crops.

I thought about the problem of unintended consequences when I came across an article focused on the unfortunate effects of even well-meaning legislation passed by thoughtful legislators.

Richard Rothstein wrote The Color of Law, a book I heartily recommend. It was an eye-opening history of the many laws that created America’s residential segregation, and any reader who comes to it while laboring under the misapprehension that such neighborhoods arose by chance or choice will discover otherwise. (I will admit to being shocked when I read it, and I did know some of what he covered.)

In the linked article, however, he takes analysis a bit farther, and shows how that shameful history led to a seemingly unrelated bill that worsened the negative outcomes of residential segregation.

I was recently asked how I came to write The Color of Law. The answer is this: In the 1990s and early 2000s, I had been a journalist and policy analyst studying public education. At the time, it was conventional wisdom that the “achievement gap”—black students having lower average performance than white students—was caused by lazy or incompetent teachers of low-income children. In 2002, this view, shared across the political spectrum, was enshrined in federal legislation: the “No Child Left Behind” law. Its theory was that if we shamed teachers by publishing their low-income African American students’ test scores, the teachers would work harder and the achievement gap would disappear. Residues of this law continue to this day. If you wonder why elementary and secondary schools are so obsessed with administering standardized tests and reporting their scores, it’s because of that policy.

Rothstein eventually concluded that lower average achievement of these pupils wasn’t due to deficits of instruction, but to the

social and economic challenges that children brought with them to school—for example, greater rates of lead poisoning that resulted in damaged cognitive function; living in more polluted neighborhoods that led to a higher incidence of asthma that kept children up at night wheezing and coming to school drowsier the next day; lack of adequate health care, including dental care, that brought more children to school with distracting toothaches, and on and on…

Looking back on this now, it’s remarkable that the book treated these all as individual student disadvantages, and made very little mention of segregation. But I soon thereafter realized that it was one thing if individual students came to school with one or more of such challenges; it was quite another if many students in a school did so, overwhelming the ability of even the best teachers to overcome them. We call such schools “segregated” schools and so I began to think of school segregation as the greatest problem facing American public education. And as I thought about it further, an obvious fact struck me: the reason we have segregated schools is because they are located in segregated neighborhoods. For me, a logical next step was to view neighborhood segregation as a school problem, one that writers about education policy should consider more carefully.

That insight led Rothstein to write The Color of Law. It should caution us to recognize the complex and inter-related nature of so many of the issues modern America faces.

We will soon see what happens when the government is run by people who don’t understand H.L. Mencken’s observation that “For every complex problem, there’s an answer that is clear, simple, and wrong.”

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The Costs of Rejecting Reality

Thanks to the information environment we inhabit, we Americans increasingly inhabit alternate “realities.” I’ve put quotation marks around the term “realities,” because it has become very clear that the universe in which too many Americans have chosen to reside is at odds with–indeed, incompatible with–empirical reality. The amount of propaganda, conspiracy theories, and other varieties of mis- and dis-information readily available online greatly facilitates the very human desire to indulge in confirmation bias–and the failure of civic and scientific education has facilitated widespread acceptance of “realities” wildly at odds with fact and credible evidence.

It seems pertinent, therefore, to ask: what happens when people choose to deny empirical evidence and facts they find inconvenient or annoying? What, for example, might we expect from RFK, Jr’s refusal to understand the science of vaccines, or the demonstrable benefits of a fluoridated water supply?

History is instructive. I did some (very superficial) research, and found fascinating (and depressing) evidence of humanity’s past experience with the denial of science and empirical inquiry.

Before acceptance of germ theory, for example, many people believed diseases like cholera were caused by the presence of “miasma” (bad air). As a result, governments took no effective measures to control cholera outbreaks–and doctors who warned about the dangers of contaminated water were ignored. The result was thousands of unnecessary deaths.

The tendency to ignore and reject scientific evidence hasn’t been confined to America. In Russia, in the early 20th Century, a Soviet agricultural scientist named Lysenko rejected the science of genetics in favor of pseudoscientific ideas like Lamarckian inheritance (the belief that physical changes made to an organism during its lifetime would be passed on–inherited by the organism’s offspring.) Stalin’s government embraced Lysenko’s theories, suppressed the scientists who supported Mendelian genetics, and based its agricultural policies on Lysenkoism. The result was widespread crop failures and famines that caused millions of deaths.

I found plenty of other historical examples: delays in accepting the science of plate tectonics that hindered advancements in understanding earthquakes, volcanic activity, and geological hazards. Initial medical responses to the HIV/AIDS crisis that were hampered by widespread stigma and misinformation. Vaccine disinformation (especially the consistently debunked claim that vaccines cause autism) has led to reduced vaccination rates, and the resurgence of diseases like measles, polio, and whooping cough that medical science had virtually eradicated.

Numerous studies have confirmed that the MAGA movement’s resistance to masks and vaccines during the COVID pandemic cost the U.S. thousands of lives–a far greater percentage of American citizens died than the percentage of people living in countries where the population had more respect for medical science. Delays in lockdowns, resistance to public health measures, and vaccine rejection caused millions of preventable deaths and significant economic damage.

And I don’t even want to theorize about the likely consequences of climate change denial…

Ironically, MAGA’s stubborn resistance to empiricism and fact flies in the face of what actually made America great.

America’s founders were students of the Enlightenment, especially the philosophy of John Locke, often considered the father of empiricism. The Founders committed themselves to unleashing the power of reason to advance knowledge and to build an effective and responsive government. They believed that science and democracy worked together, and often expressed their intent to base government policy on the best available data and the most up-to-date, empirical understanding of the world.

As the Union of Concerned Scientists wrote in 2012, “science and democracy, working hand in hand, have proved a powerful combination that has helped our nation to prosper and thrive throughout our history.”

That partnership of science and government is what enabled America’s economic “greatness.” The country’s economic growth has significantly depended on empiricism and technological innovation; advances in industries like aerospace, computing, and biotechnology have all been dependant upon rigorous science and empirical evidence. Respect for science and empiricism has also been crucial to the development of the military defense technologies that have made the U.S. a world power. (Think radar, GPS, and nuclear energy.)

Trump and the MAGA movement are the absolute antithesis of the respect for science, evidence and expertise that is actually at the base of America’s global preeminence. The collection of clowns, buffoons, and know-nothings that Trump has nominated for his cabinet make a mockery of MAGA’s promise to return America to greatness.

What is that famous Santayana quote? Those who don’t know history are doomed to repeat it.

Welcome to Lysenkoism.

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About Those Grocery Prices….

Lately, grocery prices have figured significantly in America’s political argumentation. A number of Trump voters cited them as justifications for their votes, for example. (Excuse my skeptical belief that this “reason” was generally given to mask the racism/misogyny that actually prompted those votes.)

Biden had little to do with grocery prices, but those prices are legitimately relevant to arguments about Trump’s moronic devotion to tariffs, and his threat to impose them on pretty much every country from which the U.S. imports. Every economist who has weighed in has pointed out that tariffs tax American consumers, not the countries exporting to us. And it’s hard to ignore the inevitable effect of his fixation on mass deportations, which–if successful–would leave crops rotting in American fields and set prices soaring.

Prices aren’t the only grocery problem. There’s also maldistribution– the growing incidence of America’s food deserts. A friend recently shared an Atlantic article that shed light on both issues. Titled “The Great Grocery Squeeze,” it highlighted the importance of government policy–very much including the enforcement of policy.

The concept of the food desert has been around long enough that it feels almost like a fact of nature. Tens of millions of Americans live in low-income communities with no easy access to fresh groceries, and the general consensus is that these places just don’t have what it takes to attract and sustain a supermarket. They’re either too poor or too sparsely populated to generate sufficient spending on groceries, or they can’t overcome a racist pattern of corporate redlining.

But these explanations fail to contend with a key fact: Although poverty and ruralness have been with us forever, food deserts arrived only around the late 1980s. Prior to that, small towns and poor neighborhoods could generally count on having a grocery store, perhaps even several. (The term food desert was coined in 1995 by a task force studying what was then a relatively new phenomenon.)

Affluent folks tend to think of food deserts as a feature of low-income, primarily Black neighborhoods, but it’s also a problem in very White places like North Dakota. In 1980s, almost every small town in North Dakota had a grocery store, and many had two. Now, nearly half of North Dakota’s rural residents live in a food desert.

Food deserts are not an inevitable consequence of poverty or low population density, and they didn’t materialize around the country for no reason. Something happened. That something was a specific federal policy change in the 1980s. It was supposed to reward the biggest retail chains for their efficiency. Instead, it devastated poor and rural communities by pushing out grocery stores and inflating the cost of food.

In 1936 Congress had passed the Robinson-Patman Act, essentially banning price discrimination in the industry.

During the decades when Robinson-Patman was enforced—part of the broader mid-century regime of vigorous antitrust—the grocery sector was highly competitive, with a wide range of stores vying for shoppers and a roughly equal balance of chains and independents. In 1954, the eight largest supermarket chains captured 25 percent of grocery sales. That statistic was virtually identical in 1982, although the specific companies on top had changed. As they had for decades, Americans in the early 1980s did more than half their grocery shopping at independent stores, including both single-location businesses and small, locally owned chains. Local grocers thrived alongside large, publicly traded companies such as Kroger and Safeway.

Studies tracking grocery prices while Robinson-Patman was being enforced found that large independent grocers were less than 1 percent more expensive than the big chains.

In the 1980s, convinced that tough antitrust enforcement was holding back American business, the Reagan administration set about dismantling it. The Robinson-Patman Act remained on the books, but the new regime saw it as an economically illiterate handout to inefficient small businesses. And so the government simply stopped enforcing it..That move tipped the retail market in favor of the largest chains, who could once again wield their leverage over suppliers.

Once independent stores closed, “the chains no longer had to invest in low-income areas. They could count on people to schlep across town to their other locations.”

It wasn’t only groceries–lack of anti-trust enforcement affected the entire retail sector. Between 1982 to 2017, the market share of independent retailers went from 53% to 22%.

The problem of food deserts will not be solved without the rediscovery of the Robinson-Patman Act. Requiring a level pricing playing field would restore local retailers’ ability to compete. This would provide immediate relief to entrepreneurs who have recently opened grocery stores in food deserts, only to find that their inability to buy on the same terms as Walmart and Dollar General makes survival difficult.

Policy matters. Just not in the way MAGA voters think.

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Crony Capitalism–The Big Grift

Not to sound like some sort of weird Pollyanna, but despite the considerable downsides and probable suffering involved, perhaps the Trump administration’s coming destruction of America’s governing institutions is overdue. Maybe we need a thorough-going rethinking of the ways in which America’s current governing structures support and encourage some very destructive approaches–especially to our economic life.

As I have frequently asserted, I am a huge fan of market capitalism–properly understood. By “properly understood,” I mean a system that recognizes two essentials of a working market economy: the maintenance of a true level playing field, which requires rational, reasonable regulation; and proper recognition of the areas of the economy that are not suited to a market approach. Markets are marvelous devices for the production of all manner of goods and services–and absolutely inappropriate and damaging in other areas of our communal lives.

The basic definition of a market transaction is one in which a willing buyer and willing seller, both of whom are in possession of all information relevant to the transaction, enter into a sales agreement. Rather obviously, that definition excludes things like medical care, where the “buyer” is not in possession of the same information as the provider, and is generally in no position to bargain with the provider or to shop around for a better deal.

What about transactions where the “buyer” is government?

Take prisons. In a market economy, should government “purchase” incarceration services from entities competing for those government contracts? Or–as most of us might suspect–does the prospect of a “buyer” with virtually unlimited resources thanks to the taxing power invite would-be contractor/sellers to engage in a range of unethical behaviors–big donations to selected political figures in order to get the contracts, and/or failure to provide the services at an optimum (or even adequate) level in order to generate more profit?

Should prisons be privatized–i.e., considered part of the market economy? Or is the marketization of such essentially governmental services an invitation to corruption?

One recent report looked at the “industry” of immigrant detention. Titled “Revenue Over Refuge,” the report found the following:

Hundreds of millions of dollars are flowing from city and federal governments to private equity firms for goods and services used to detain immigrants.
63 percent of federally-designated ICE facilities contract with private equity-owned companies for a range of services.
Private equity-owned companies are winning emergency contracts for managing migrant shelters in cities across the country.
Companies like Wellpath and G4S have faced investigations and lawsuits and paid out settlements for mistreating immigrants in their care.
Private equity firms and other alternative asset managers stand to profit from increased taxpayer-funded immigration detention, although alternatives to detention cost less.

Are we really surprised to find corporate America engaging in these profit-maximizing tactics? More fundamentally, are prisons the sort of consumer item we think of when we consider the merits of healthy market economies?

When I was still teaching, I required the graduate students in my Law and Public Policy classes to produce team projects on a policy issue that the team would choose. Over the years, several of the teams investigated government contracting with the private prison industry. In every case, the teams’ conclusions were highly negative. Not only did they focus on the poor performance of the contractors–and the high potential for graft–but most teams addressed what I think is the underlying philosophical question: when should government contract out–and when shouldn’t it? When is it appropriate for government to be the “willing buyer” in a market transaction?

America is heading for a very ugly few years, as the MAGA movement tries to install a government that might have been appropriate for an 18th Century society–a government utterly insufficient for America’s contemporary culture and other realities of the 21st Century. The next few years will range from very unpleasant to devastating (those of us with documented citizenship, a measure of financial security and white skin will be spared the worst of it; others won’t be so lucky.) But when the fever subsides, when the current MAGA eruption of racism, misogyny, anti-Semitism and other assorted bigotries has run its course (at least this time), the rest of us must be ready to offer practical systemic and economic reforms.

Production of that reform agenda needs to be a central part of the Resistance.

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The Big Sort

I have frequently cited a 2009 book by Bill Bishop, titled “The Big Sort.” Bishop pointed to a then-emerging trend of “voting with one’s feet”–the tendency of many Americans to relocate to places that they find philosophically and politically compatible. The consequences of such sorting can be troubling. What happens when most neighbors agree with your outlook and values, reducing the need to accommodate disagreement or defend your woldview?

I read “The Big Sort” when it first came out, but I still ponder many of the issues it raised. One issue that it didn’t raise, however–at least, I don’t recall Bishop paying attention to it–involved “macro” outcomes: what if the sorting led to very different economic and quality-of-life differences between what we’ve come to identify as “Red” and “Blue” parts of the country?

More than a decade after the book, we are seeing major differences emerge. A recent column by Michael Hicks focused directly on that outcome. As he writes,

Of the 20 richest states today, 19 are solidly Democratic. Of the poorest 20 states, 19 are solidly Republican. The GOP dominates in poor, slowly growing states, while the Democrats dominate politics of prosperous, faster-growing states.

Hicks notes that these differences are largely an outcome of the nationalization of our politics. In former times–in fact, up until the late 1990s– there were conservative Democrats and liberal Republicans. But then, state parties began to align with national politics.

Even races for local municipal government tend to be nationalized. State and local issues are often ignored, or barely discussed in primary or general elections. The homogeneity of national politics will naturally cause parties to represent more similar places.

Hicks then echoes Bishop, finding household sorting by politics. “Though most sorting happens at the sub-state level” (presumably, rural and urban) “the nationalization of politics means that state borders now affect household location choice.” Voters are choosing the political landscapes they prefer.

Hicks notes that when he began researching state and local policy some quarter-century ago, state legislators focused more on local issues; now, many take their “legislative marching orders from national think tanks or national parties. Today, elected leaders from both parties are expected to advance similar legislation, typically written by think tanks, everywhere at once.” (That is certainly the case in Indiana, where our dreadful General Assembly obediently does ALEC’s bidding.)

Education, Hicks tells us, is the most consequential policy difference between thriving Blue states and struggling Red states like Indiana.

The most likely cause of divergence between rich and poor places is the fact that human capital — education, innovation and invention — replaced manufacturing and movement of goods as the primary source of prosperity. In other words, places that grow will collect more human capital. However, the educational policies pursued by both parties are vastly different.

The GOP has largely tried to adopt broad school choice, while cutting funding to both K-12 schools and higher education. The Democrats have largely eschewed school choice, but amply fund both K-12 and higher education. Today, 17 of the 20 states with high educational spending are Democratically controlled and 17 out of the 20 lowest funded states are GOP strongholds.

There’s more to education than spending. Still, higher educational spending, even if it means higher tax rates, is leading to enrollment and population growth. Educational attainment differences alone explain about three quarters of the difference in per capita income between states.

At the same time, school choice effects are smaller than almost anyone hoped or expected. Today, it’s clear that the average student in private school underperforms their public school counterparts (charter schools tend to out-perform both). So, if poor states spend less on education and rely more on school choice, they will become poorer than states spending more on public education.

Economists have been saying this for three decades, with little effect. The prognosis is simply that poor states like Indiana are going to get poorer for decades to come while rich states will grow richer.

Here in Indiana, incoming Governor Braun has made expansion of the state’s voucher program a key priority. He wants to make it “universal,” meaning the eradication of income limits. Indiana’s program is already disproportionately used by upper-middle-class parents; Braun’s proposed giveaway would allow participation by even more privileged families (So much for the pious assurances that vouchers would allow poor children to escape “failing” public schools.)

Vouchers don’t improve educational outcomes, and they drain critical resources from the public schools that continue to serve the overwhelming majority of Indiana children.

If Hicks is reading the data correctly–and I believe he is–states like Indiana will continue to decline, and educated citizens will choose to move elsewhere.

Continuing the “sort.”

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