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Daniel Rothschild

Let’s not confuse science with feelings

By Daniel Rothschild

May 11, 2012, 1:02 pm

Princeton sociologist Elizabeth Mitchell Armstrong writes in today’s New York Times about the apparent threat to infant health coming from “wealthy and powerful manufacturers” of infant formula by giving away free samples in maternity wards. Armstrong is concerned that these free samples given away to vulnerable new mothers “[do] more harm than good” because they encourage formula feeding over breast feeding.

Before proceeding, let’s stipulate: breast milk is, all other things being equal, better than formula. Now that we have gotten that out of the way, let’s continue.

What is Armstrong’s evidence that free formula samples discourage breastfeeding? She cites “a 2006 report by the Government Accountability Office [that finds maternity ward formula samples] tend to reduce breast-feeding rates among the women who receive them.”

As far as I can find, the GAO only produced one document on infant formula in 2006, and it consists mostly of slides used in a Congressional briefing. The report focuses mostly on WIC, which is responsible for about 60 percent of all U.S. formula sales. (Armstrong never mentions WIC, TANF, or any federal or state nutrition programs in her op-ed. This is a big omission; it’s like discussing the healthcare market without mentioning Medicare.)

“Finding three” in this GAO slide show states, “A majority of the studies we reviewed found lower breastfeeding rates among women receiving formula samples in [maternity] discharge packs.” That sounds damning.

But delve deeper. What the GAO found was this: “In 7 of 11 sound studies we reviewed, breastfeeding rates were lower for women receiving discharge packs.” To put it another way, about 2/3 of studies found a relationship — not a causal one, mind you, just a correlation — between discharge packs and breastfeeding rates at some period of time in the future. Four of the studies (a third of them) found no relationship between discharge packs and breastfeeding.

Here’s where it gets interesting. Appendix IV of the GAO report lists the studies used in this meta-analysis. They were published between 1986 and 1998. The median year of publication was 1990.

What is the trend in breastfeeding? The GAO report also gives us this chart:

In other words, the year in which the median study was published was the low point in breastfeeding in a generation. The trend has been upwards since then. This holds true for both WIC and non-WIC infants.

The entire thesis of Armstrong’s op-ed is that giving formula samples to discharged new moms is bad because it discourages breastfeeding. But the evidence she offers to support this is very thin. Unless discharge packs waned in popularity in the last 20 years — which would make her op-ed moot — breastfeeding seems to be rising despite the insidious machinations of formula manufacturers.

Moreover, Armstrong ignores the elephant in the room. WIC breastfeeding rates are much, much lower than non-WIC rates, and about half of all U.S. infants are WIC supported. And formula is free to WIC households. To what extent free WIC formula causes declines in breastfeeding is an empirical question, and one which I can’t find good empirics for. But intro-level microeconomics says it probably has some effect at the margin.

Ultimately, Armstrong’s op-ed hangs its hat on one piece of evidence, a slide show that doesn’t even qualify as a meta-study. What really seems to drive this op-ed is a hostility towards free enterprise and commerce. She doesn’t like the fact that formula is a “commercial product,” that there might be “commercial influence” in nutrition decisions, and that “companies provide [maternity swag] for the same reason they distribute swag to celebrities: it drives sales.”

That’s not an argument based in science or evidence. It’s one based on a revulsion to mixing capitalism with childhood. And that’s a position that one is free to hold, but let’s not confuse science with feelings.

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Categories:  Health Policy, Society and Culture   |   Tags: , ,

Daniel Rothschild

4 reasons that ‘Rich States, Poor States’ matters

By Daniel Rothschild

April 12, 2012, 10:32 am

Art Laffer, Steve Moore, and Jonathan Williams have released the fifth anniversary edition of their Rich States, Poor States ranking of state fiscal and economic policies. Once again, Utah was this year’s “winner,” based an unweighted ranking of 15 policy variables ranging from highest marginal personal income tax rate to the size of the public sector workforce relative to the private sector. New York is at the bottom of the league table, to the surprise of nobody. (It also comes in last in the Mercatus Center’s Freedom in the Fifty States index.)

Four thoughts about Rich States, Poor States and why it matters:

1. Policy still matters on the state level. In a presidential election year, all eyes are focused on Washington and the top-of-the-ticket horse races. But a lot of the policy that touches our lives closely happens on the state level, including important tax and regulatory policies.

2. State competition remains robust. America is still a very geographically mobile nation. In the last decade, a net 1.5 million people moved out of California–this is about one in 25 Californians. (Bear in mind this is a net figure, so even more people who lived in California in 2001 didn’t by the end of the decade.) In 2010, 6.7 million Americans moved to a different state, and of those who moved more than 500 miles, it was usually for economic reasons.

3. The alternative hypotheses don’t hold much water. One of the most common rebuttals to suggestions that state policy influences population is that other factors like weather or natural resource endowments are much more important. Rich States, Poor States blows a hole in this. New Mexico is 23rd in net domestic migration; the states that surround it rank 2nd, 3rd, and 10th. Indiana is at 32, while its surrounding states are all in the bottom half-dozen. New York and Massachusetts are 50 and 43, respectively; between Vermont, New Hampshire, and Maine, none rank below 28. Washington state’s weather is so awful it gave us grunge music–but the state was fifth in net domestic migration.

4. This is because jobs matter, and policy matter for jobs. Intelligent people can argue about which taxes matter and the incidence of those taxes. And likewise, we can discuss the best ways (and right amount) to invest in infrastructure, education, and public goods. But on the margin, better policies bring capital and employees, and poor policies cause capital and worker flight.

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Categories:  Economic Policy, Fiscal Policy and Taxes, U.S. Economy   |   Tags: ,

Daniel Rothschild

Missing the mark on ‘ideology’

By Daniel Rothschild

March 27, 2012, 1:03 pm

In the hometown paper this morning, Charles Lane scolds “ideologues” for being insufficiently willing to compromise on principle, saying that a slavish attachment to beliefs is ultimately bad politics. You’ve seen this movie before.

Lane uses the case of Lawrence v. Texas, the topic of University of Minnesota law prof Dale Carpenter’s much-discussed recent book, to illustrate his point: Lawrence would never have been litigated all the way to the Supreme Court had the attorneys for Texas not been so blinded by ideology.

But what Lane misses is that Lawrence vindicates rather than vitiates the case for making and holding principled stands. It is only by standing on principle and litigating for these principles—whether in courts of law or courts of public opinion—that opinion changes and bad ideas and flawed ideologies give way to better ones.

It is true that if Texas had dropped the matter, Lawrence would never have been decided. But it’s equally true that if the plaintiffs, Lambda Legal, and the gay-rights legal community hadn’t stood on principle and litigated the case, it wouldn’t have been decided either. Like with many landmark legal cases, two principles went into court, but only one walked out.

This is equally true in the realm of practical politics. America is litigating, mostly through elections but also in the high court today, a discussion about the relationship between individuals and the state, free enterprise, the welfare state, and economic growth. This litigation is based on principle and on ideology. And it’s better to have this contest between principles than to try to paper over what aren’t cracks but chasms. That never ends well.

As Jonah Goldberg writes in his forthcoming book The Tyranny of Cliches, “An ideology, at the most fundamental level, is simply a checklist of ideas you have about the world. Having an ideology doesn’t mean you’ve been brainwashed; it means you’ve come to conclusions about how the world works at some basic level.” Ideology is not a bad word.

Lane is correct that, if your goal is to hold power for its own sake, then standing on principle is foolish; far better to chase the median voter. But if your goal is to change minds and move the median voter, then standing on principle is the only real option.

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Daniel Rothschild

Jeffrey Sachs, the World Bank, and campaign finance

By Daniel Rothschild

March 14, 2012, 2:40 pm

Breaking with tradition and good taste, Columbia University economist Jeffrey Sachs is in the midst of an all-out campaign to be the next president of the World Bank, replacing Robert Zoellick when his term ends this summer. On March 1, Sachs wrote an op-ed for the Washington Post to kick off his campaign, in which he argued for a World Bank that brings together technocrats from all disciplines to really, honestly, totally get the central planning right this time:

I am ready to lead the bank into a new era of problem-solving. I will work with industry, governments and civil society to bring broadband to clinics, schools and health workers, creating a revolution of knowledge, disease control, quality education and small businesses. I will work with agronomists, veterinary scientists, engineers and communities to build prosperity in impoverished and violence-ridden dry lands.

I will work with engineers and financiers to harness the solar power of the deserts in the service of hundreds of millions in Asia and Africa who lack electricity. I will work with urban planners, architects and community organizations to help ensure that the developing world’s mega-cities are places to live and thrive.

Sachs has now gone beyond campaigning for the job in the Post to collecting endorsements and posting them on his web site. He’s boasting of endorsements from politicians, economists, and “intellectual leaders,” including a number of Nobel laureates.

Setting aside the question of whether it is, to borrow from Charles Murray’s observations on the topic, “seemly” for someone to publicly declare a candidacy for the head of an international organization—whose leader, it’s worth remembering, is not selected by democratic means—the question remains of how Sachs is financing his campaign.

Sachs is a vocal proponent of campaign finance rules. In his 2011 book The Price of Civilization, he writes:

We have seen that winning campaigns and holding power require money and lots of it. Turning money into power and power back into money are Washington’s two main industries.

Sachs appears to be innovating from the ground up the idea of a very public, very active campaign for a very powerful position. Does he believe the “overpowering role of money in politics” that he blames for what he perceives as America’s broken political system applies on the international level as well? If so, does he support campaign finance limits—and limits on public speech about his qualifications for the job? Does he support the establishment of an International Elections Commission?

If not, why not?

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Categories:  Development   |   Tags: , ,

Daniel Rothschild

The Obama stimulus: Fighting talking points with talking points

By Daniel Rothschild

November 28, 2011, 11:54 am

In this morning’s Gray Lady, Bill Keller wrings his hands over the state of economic policy discourse in an age of hyperbole and half-truths. His complaints aren’t without merit. But he falls victim to the very behavior he seeks to condemn.

About the American Recovery and Reinvestment Act (ARRA), Keller writes:

The Web site PolitiFact, the Pulitzer-winning fact-checking service, recently did a thorough debunking of Republican claims that Obama’s 2009 stimulus program created, quote, “zero jobs.” In fact, the checkers established, using still-trustworthy sources like the Congressional Budget Office, that the stimulus created or saved a couple of million jobs. Case closed? No, the Republicans just went on repeating the claim.

“The talking points drive the discourse,” said Bill Adair, the editor of PolitiFact. “They repeat the talking points so often I think they start actually believing them.”

But Keller is fighting a talking point with a talking point. And while his may be less untrue than the one he seeks to debunk, it’s still not totally accurate.

As Peter Suderman has ably reported, the CBO’s estimates of job creation are just that—estimates. All that the CBO has really done in their quarterly reports on ARRA (the most recent of which came out last week) is to re-run their pre-existing models, tweaked slightly, using new data about actual spending. But the underlying assumptions about stimulus remain basically the same. In other words, before ARRA passed they said it would create X jobs per Y dollars spent. And now they’re saying that since we’ve spent X dollars, we must have created Y jobs.

This isn’t to fault the CBO, and they have been abundantly clear about the limitations on their ability to accurately assess the impact of ARRA. But it’s misleading to suggest that the CBO has done empirical, ex post analysis of actual job creation. As CBO chief Douglas Elmendorfer put it in 2010, “if the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis.”

Finally, the CBO has never given a precise number of jobs created, but rather a range. The high estimates range from 900,000 jobs created in 2009 to a high of 3.2 million jobs in 2010. But the lower end estimates run from 200,000 jobs to 700,000 jobs. That’s quite a range, and only citing the favorable estimates is misleading.

It is, in other words, a talking point.

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Categories:  Economic Policy, Fiscal Policy and Taxes, U.S. Economy, U.S. Politics   |   Tags: ,

Daniel Rothschild

There’s no free lunch, or free broadband, or free bailouts

By Daniel Rothschild

November 16, 2011, 4:06 pm

This afternoon the Treasury Department released a revised estimate of taxpayer losses from the auto bailout, saying GM’s declining stock prices have pushed the total losses up to $23.6 billion.

By sheer coincidence, that’s almost exactly the figure that a 2010 FCC study estimated would have been the cost associated with bringing broadband (as determined by the FCC’s bizarre and arbitrary 4 mpbs speed criterion) to almost all of the 7 million households (comprising some 14 million people) who don’t have access to it. In network economics jargon, the $23.5 billion represents the investment gap between the revenue generated by serving these households and the costs of creating and maintaining the infrastructure. This FCC chart shows how that works out:

To be sure, it’s not like Congress took $23.5 billion of taxpayer money that was set aside for rural broadband and gave it to the car companies. And it’s pretty unlikely that, in the absence of the auto bailout, we would have fully funded the FCC’s broadband plan.

But it is a worthwhile exercise in thinking about opportunity costs. Spending on one program—regardless of whether or not you call it an “investment,” one of the most abused words in today’s popular political economy argot—necessarily means that the resources put into it aren’t there for something else. Economics is about tradeoffs. Wishing them away, or pretending through creative accounting and sleight-of-hand that they don’t exist, doesn’t make them disappear.

Was bailing out the auto companies despite years of making mediocre automobiles and even worse collective bargaining agreements good policy? Is bringing broadband to every American household no matter how isolated good policy? These are both normative questions. But in both instances, doing them means forgoing some other benefit.

It can’t be stressed enough: there’s no free lunch.

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Daniel Rothschild

Is Pakistan really a ‘cautionary tale’ in overpopulation?

By Daniel Rothschild

November 2, 2011, 1:10 pm

On this morning’s Morning Edition, Steve Inskeep filed a story from Karachi, Pakistan, which he called “a cautionary tale about living in a world with more than 7 billion people.” The implication was that Karachi was some kind of post-apocalyptic hellhole overrun by teeming masses.

Inskeep is heavy on anecdote (largely coming from his guide, who lost a development when  political winds changed) but light on statistics, so it helps to build the story out.

Pakistan’s GDP has increased by about six-fold over the last 30 years, from $28.1 billion in 1981 to $175.8 billion in 2010, while its population has more than doubled. In other words, per capita GDP has trebled, from around $337 per person to around $1,000. Not shabby, though it would probably do better with a freer economy; the World Bank Doing Business Rankings rate Pakistan as the 105th worst country for doing business, and corruption is high and property rights shaky. But this hardly seems like a “cautionary tale.”

But wait: aren’t developing cities being flooded by poor rural migrants? To be sure, Pakistan is becoming highly urbanized; in 1951 only about 17.4 percent of the country’s population was urban, a figure that jumped to 32.5 percent by 1998. And Karachi is now the world’s 12th largest city, some 60 times the size it was in 1947.

But here’s where Inskeep gets it wrong. Karachi may be a city that’s “scrambling to keep the lights on,” but that’s because its booming economy is outpacing the ability of local government to build infrastructure. This makes for something that’s messy and certainly not orderly (like New York?) but that represents a very good thing. What Inskeep sees is growth, a city getting more affluent as it gets more people.

Every country that went from poverty to affluence had to “scramble to keep the lights on” (or keep infectious disease and violence at bay) in its rapidly growing conurbations. Manchester, England grew from 135,000 to 399,000 souls between 1821 and 1861. Growth and urbanization are messy. But Inskeep is wrong that, as population increases, “some people, some cities, and some nations will surely come out winners” while others will be losers. That’s just so much neo-Malthusian claptrap.

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Categories:  Foreign and Defense, South Asia   |   Tags:

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