Subsidizing Incompetence

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“Government’s view of the economy could be summed up in a few short phrases,” said President Ronald Reagan. “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Republicans can take unpopular stands in defense of sound economic principles. For example, more than 60 percent of all Americans favor minimum wage increases. However, about three-quarters of Republicans oppose them. Politically, this is probably foolish. However, there are sound economic principles behind their opposition.

Raising the minimum wage creates perverse incentives to raise prices or avoid hiring workers. The genius of free markets is the pricing system. No central authority can match the market’s ability to process information and reconcile supply and demand. If you meddle with that, you get horrific inefficiencies, as in America’s higher education and health care industries. Conservatives, for all their faults, get this and act on it.

Yet they refuse to do the same when it comes to racial questions. We’ve just seen a particularly pathetic example in New York City. The city will pay about $1.8 billion to around 5,200 black and Hispanic teachers and aspiring teachers. One single black man will get about two million dollars, much to his relief because he says he’s “racked up serious debt on his Queens home and credit cards.” About 225 people will get settlements of at least one million dollars each. This is probably just the beginning of the payouts that will ensue. The city is also paying millions of dollars in legal fees, an important reason why lawyers and advocacy groups are eager to pursue more cases of this kind.

The teachers and would-be teachers are receiving these payouts because they couldn’t pass the Liberal Arts and Sciences test used from 1994 until 2014 to screen for teachers. More whites were able to pass than blacks and Hispanics. Under current law, that’s all it takes. Neither proof of racism nor even its allegation is required. The mere fact that more whites were able to pass the test violates civil rights law under the doctrine of “disparate impact.” The ramifications are practically unlimited, because the same kind of results are going to emerge in any legitimate screening process.

The settlement was negotiated under former mayor Bill de Blasio, who put black issues at the heart of his political career and is married to a black lesbian. The New York Times recently noted that his supporters called his marriage “a living testament . . . to the breadth and promise of New York” because they were “black and white, short and tall, inclined to dance in public.” They are now separated. There might be a metaphor here.

Racial differences in IQ are among the most empirically supported facts in social science. IQ correlates with important life outcomes such as future earnings and crime, as well as objective measurements like reaction times. Though intellectuals entertain themselves with sophomoric theories about our supposed inability to predict intelligence, in the real world, for all practical purposes, we can predict intelligence. And intelligence has important consequences for every job and just about every situation.

The disparate impact doctrine is nothing less than a denial of reality itself, the assertion that political power can change facts for egalitarian ends. Conservatives get this when it comes to purely economic issues. A central planning board that simply asserts phony production figures for shoes or refrigerators is easy to mock — President Ronald Reagan made it a staple of his political career. However, conservatives find it more difficult to push back against the absurdity of disparate impact. The best they can do is say that the true victims are blacks and Hispanics.

In Dem NYC, failing is profitable.

(And really, who cares about the kids—mostly minority—who’ll pay the price for teachers who can’t meet even basic proficiency?) https://t.co/PMhsFy8PeL

— Ted Cruz (@tedcruz) July 15, 2023

New York spends more on education than any other state in the country. It spends more even though public-school enrollment is falling. Despite this, or perhaps because of it, students score below average on standardized tests. In New York City, scores for 13-year-olds are lower than they have been in decades. Mayor Eric Adams blames racism. “All of our children are hurting, but black and brown children are disproportionately impacted by this,” he said last month. “I just think that people think black and brown children are dispensable.”

The truth is that American law forces us to pretend that “blacks” and “browns,” both as teachers and as students, will generally perform up to the standards of whites and Asians. That isn’t true. It hasn’t happened and it will never happen on a national scale, because race is a biological reality, not just a social construct. However, so long as the law mandates phony egalitarianism and conservatives continue to go along with this moral blackmail, nothing will change.

It’s tempting to say conservatives are just too cowardly to act on this matter. Yet given their willingness to go to the mattresses on issues like upper-class tax cuts, budget cuts, and the minimum wage, we can’t just blame election jitters. They probably really believe what they are saying about all groups being equal. Until that changes, New Yorkers, and all Americans, will continue to subsidize incompetence, and we will get more of it.