Mayor Mike's Most Recent Folly

by Don Boudreaux on June 20, 2007

in Current Affairs

Here’s a letter that I sent today to the New York Post:

Dear Editor:

With
the creativity of a drunk sailor, Mayor Bloomberg proposes that poor
people be paid to care for themselves – given cash rewards to do things
such as stay in school, go to the dentist, and hold steady jobs ("
And Paying the Poor
," June 20).

Your criticisms of his plan are on target.

I
ask the Mayor if in running his private business he would seriously
consider hiring anyone so unmindful of his or her future that that
person would go through the motions of self-responsibility only if
bribed to do so?  Surely the answer is no.

Paying someone to
playact at self-responsibility no more creates a self-responsible
person than paying someone to playact as a lawyer creates a skilled
attorney.

Sincerely,
Donald J. Boudreaux

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{ 19 comments }

Kinney June 20, 2007 at 5:06 pm

Doesn't this basically ignore economic thinking? If you remove play acting from your last sentance does it make sense at all? Isn't the whole point of economics that people respond to variables like this? I understand that this occurs at the margin, and many people will not act differently, but your post doesn't even say that. It says that people are going to act the way they do no matter what. Maybe I am missing something.

Craig June 20, 2007 at 5:29 pm

British commentator Samuel Brittan of the Financial Times has made some interesting arguments in favor of a 'living wage.' He's no socialist either, despite being European ;) Though I'm not sure he would agree with this proposal.

Robert S. Porter June 20, 2007 at 6:25 pm

I think the problem comes from the fact that though people respond to incentives, there is no real way to ensure that there would be any real behavior modification.

Like his examples shows, incentives can't magically transform someone into a competent lawyer. Certarinly incentives could help someone on a path to self-responsibility but it can't instantly do so.

Mathieu Bédard June 20, 2007 at 7:22 pm

With the creativity of a drunk sailor

That was hilarious ;) .

Methinks June 20, 2007 at 8:47 pm

As a resident of the Soviet Socialist Republic of New York City, I'm fine with Mike paying for this crap out of his own pocket. I'm just hoping he's not planning to reach into mine.

The incentive is dubious. If $50 is what's keeping you in school, then you're not going to be very productive when you get out. Not to mention the fact that physically appearing for roll call accomplishes nothing. I can only imagine the elaborate bribes the students will come up with to be marked present when they are, in fact, absent. Mike isn't paying for good grades, mind!

If you're already on medicaid, getting free healthcare, what additional incentive would $200 provide? I can already imagine the not so elaborate bribing of doctors to sign off on check ups that never happen.

If the Mayor wants to incentivize kids to do well, he should do it in the form of scholarships for those kids who are motivated by such things as moving out of the ghetto. And then he should do it out of his personal bottomless bank account. The tax payers of New York should not become the unwilling prisoners of his drunken vision.

KingKull June 20, 2007 at 10:48 pm

I submit that the MSM's framing of Bloomberg is currently more important than his. The drunken MSM's main story is heralding this man's move from Republican to independent. What is happening in our country now?

When a life-long Democrat / Socialist becomes a RHINO to avoid the Democratic primary, raises taxes like a drunken sailor, legislates trans-fats??, and then the story spun in the media is all about Republican desertion, I mean, wow. What alternate universe are we living in?

From the outset of the 2004 election, I have never seen the MSM come out so aggressively to move the country and legislate its agenda and slant political discussion. Not that Bush understands economics either, but this is clearly out of control now.

The gloves of the media are off, and they've been off for awhile now. And yet I rarely see any reports about the drastic moves the MSM is making. Bloomberg is a good example; in a way, the real story is the MSM interpretation of him. But we don't hear anything about it.

The politics and MSM in this country have made a drastic economic move to the left in the last 4 years. As a hugely influential economics department, I implore you to help bring people's attention to it.

Will June 20, 2007 at 11:35 pm

Right you are.

Incentives are just like bribes. Oh wait. No they aren't. ;-)

Perhaps Mayor Bloomberg will decide not to run for President, and instead go back to investing…

Methinks June 21, 2007 at 7:44 am

"And yet I rarely see any reports about the drastic moves the MSM is making."

Sure you do, King. The ratings for Fox News are through the roof.

I stopped watching CNN when they started the "news" story about Circuit City with "Circuit City made an OUTRAGEOUS offer to its sales staff today…"

Jon June 21, 2007 at 10:36 am

More Bloomberg Baulderdash!

I think I should get paid by Virgnia to get better college grades … Hell while we're at it, let's pay people to drive the speed limit.

The Dirty Mac June 21, 2007 at 1:12 pm

I see, but don't hear, CNN when I am at the gym. In one segment (I believe calling for central planning over the enrgy supply) they showed a head shot of GW Bush with gathering strom clouds and a clock stiking midnight. Its hard to call that "reporting"

The Dirty Mac June 21, 2007 at 1:14 pm

Sorry. strom = storm, stiking – striking. Maybe Mayor Bloomberg could throw me a few bucks to take a typing class.

Brad June 21, 2007 at 3:42 pm

I don't know if you've noticed, but you have stumbled on an instance of how statist solutions will be presented to us for the next 10 years: "To save globalization, policymakers must spread its gains more widely. The best way to do that is by redistributing income."

The formula is: "To save {good freedom thing] we must [do statist thing]." I first noticed this on Free Exchange (The Economist Blog) when a recent guest blogger got into it with Kling over health care. One of Larry Summers' co-authors, but that blog is down and the name escapes me. Anyway, he said that to save capitalism, we need more progressivity in our tax system.

More solutions I predict we will hear:

"To save the First Amendment, we must not allow the depiction the prophet Mohammed in any disparaging way in our media."

"To save our right to travel freely, we must register when moving from state to state."

"To save our right to sell goods on the Internet, we must collect sales taxes for all 50 states."

etc.

Methinks June 21, 2007 at 5:20 pm

Brad,

You're right on. I've noticed it too.

In accepting his honourary degree from Harvard, Bill Gates said that "we must build a more creative capitalism". Apparently, the capitalism that allowed him and so many others to become so wealthy isn't creative enough. What can we expect from a guy who famously said "you can't eat GDP".

The UN Human Rights Council has already adopted a resolution curbing free speech. It says that speech must "be exercised with responsibility" and limited to protect "public order, public health or morals and respoect for religions and beliefs." The fact that Islam was the only religion mentioned was Islam is beside the point. To be good statists, we must buy into a single vision. I can't wait for the Europeans to start tossing that one about.

Of course, hijacking the language of freedom and liberty is a well-worn tactic of totalitarian scum.

Python June 21, 2007 at 7:24 pm

"Of course, hijacking the language of freedom and liberty is a well-worn tactic of totalitarian scum."

I couldn't agree more, but while working at a University I discussed the topic of Orwell/Huxley, and all others concluded that Big Brother was very similar to the Republican party and Religious Right.

Orwell used fear and brainwashing until all citizens fell in line. Huxley over-satisfied everyone until they didn't care what line they were in. The movie Brazil had such a bureaucracy that the only thing left was lines.

I believe "Brazil" is the one that the US is now closest to becoming. Bureaucracy and rules for your safety, health, equality, fairness, etc.

Give me liberty or give me a universal medical plan!

Brad June 22, 2007 at 2:19 am

Heh. That comment was meant for a different post… "A New Deal for Globalization". Doh!

eddie June 22, 2007 at 11:11 am

Paying someone to playact at self-responsibility no more creates a self-responsible person than paying someone to playact as a lawyer creates a skilled attorney.

I'm surprised this assessment comes from an economist. One of our key principles is that incentives matter, no?

If you pay people to stay in school, go to the dentist, and hold steady jobs… more people will stay in school, go to the dentist, and hold steady jobs. Calling this "play-acting at self-responsiblity" is ducking away from the basic fact that paying people to do things we want them to do will get them to do the things we want them to do.

Libertarians can argue that this shouldn't be funded by the government, but that wasn't your point. Imagine this was being done by a private charity. Would you criticize them for promoting "fake responsibility" rather than actually helping people? I hope not. If I took someone on as a charity case, and was willing to spend $X to produce the best outcome for them, I would rather pay them to go to the dentist for routine preventive care rather than hope that they developed enough "self-responsibility" on their own and then pay for expensive dental work later when it turns out they didn't.

Self-responsibility isn't something that people develop by other people wishing it. Self-responsibility is a learned trait. It comes through habits, and habits come through repeated behavior, and behavior comes through incentives. Paying people to go through the motions of responsible behavior, even if their hearts aren't in it and they're only doing it for the money, is an excellent way to produce the very self-responsibility you are wishing they had.

Don't believe me? Pick a habit you'd like to change. Make a bet with one of your colleagues – every month you succeed in the new behavior, they pay you $X; every month you show the old behavior, you pay them $X. Set the terms of the bet to last one year. See what your behavior is like after the year is up.

Tim H June 22, 2007 at 2:21 pm

Let's take Bloombergs proposal to the next step. Take all the people without the skills to get a job on there own and concentrate them near industrial parks. Instill self responsibility and good work habits by enforcing rigid work hours, perhaps by housing the people in barracks of some sort. Enforce work output by means of incentives (a little more gruel for lunch). Mandatory health care will be sure to reduce the long term health care costs. Arbeit macht frei.

Nick June 22, 2007 at 2:35 pm

Would you be in favor of it if we replaced the other welfare programs? For instance, Friedman advocated a consumption tax with a rebate for the poor (basically a negative income tax for the lowest 15% of earners.)

How would the Austrian school jive with the Chicago school in this instance?

Methinks June 22, 2007 at 4:40 pm

"If you pay people to stay in school, go to the dentist, and hold steady jobs… more people will stay in school, go to the dentist, and hold steady jobs."

That's not what Bloomberg is really paying for, though.

He's paying them to attend school but the only way to confirm that is through attendance records. Since there's no good way to prevent fraud in attendance taking, the fraud will be rampant. People who don't care enough about school to attend in the first place are unlikely to suddenly become conscientious students when offered $50. What the $50 does incentivize students to do is to create a fraudulent attendance record. I think that’s part of the criticism of the plan – it will provide incentives for the wrong things, despite it’s intention.

These people already get free health and dental. If these people’s demand for these services is zero when the price to them is zero, you have to wonder. What will happen is crooked dentists and doctors will sign the required paperwork vouching for the check-up they didn’t actually receive so that people will be paid and the doctors will get a cut. My bet is they’ll sign off on dead people. When we first moved to this country, we lived in a really tough ghetto in the Bronx. The elaborate scams to steel just that much more from the government were truly magnificent – and the government bought it because there was no real way to check if the conditions for payment were actually met!

My personal favourite is the $150 per month he’s planning to pay people to hold a steady job. Isn’t the job paying them already? Shouldn’t the fact that they already get paid be incentive enough to hold down said job?

Like I said, as long as Mike pays out of his own pocket, I don’t care. But if he thinks he should provide incentives for scams by reaching into my pocket, he’s got another think coming.

I hope Mike loses a lot of money down this black hole. He just raised my Bloomberg access fees, so he has more of it to lose.

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