Sunday, July 19, 2015

The real world evidence that a strong welfare state encourages entrepreneurship

Image: A job creator

Walter Frick has a must-read piece on the relationship between welfare and entrepreneurship. A taste:
Pundits and researchers often note the negative correlation between government spending and entrepreneurship, both within the U.S. and internationally, and conclude that growth requires trimming social welfare programs. Jim Manzi of the National Review, for example, a thoughtful commenter on economic policy, wrote last year that, “we must accept some amount of social dislocation in return for innovation.” But correlations can be misleading. A series of more recent studies challenge the view that larger or more activist government necessarily threatens entrepreneurship. In fact, that may get the relationship precisely backwards...
In another paper, Olds looked at the creation of the Children’s Health Insurance Program (CHIP), which offers publicly funded health insurance for kids whose families don’t qualify for Medicaid. By comparing the rate of entrepreneurship of those who just barely qualified for CHIP to those whose incomes just barely exceeded the cutoff, he was able to estimate the program’s impact on new business creation. The rate of incorporated business ownership for those eligible households just below the cutoff was 31 percent greater than for similarly situated families that could not rely on CHIP to care for their children if they needed it... 
A 2010 study by RAND found a similar effect with Medicare. American men were more likely to start a business just after turning 65 and qualifying for Medicare than just before. Here again, government can make entrepreneurship more appealing by making it less risky.

Links worth reading

David Minzer pens an absolutely must-read piece on the military intervention in Libya

Top military brass claims that drones create more terrorists than they kill

And here are a bunch of links I assembled back in December but forgot to publish:
Amanda Gailey on how gun enthusiasts believe government has run amok with power, then support the government in killing unarmed black men.

Marcy Wheeler makes the case that the CIA torture program successfully met all of its goals, none of which were creating accurate intelligence.

CIA was recently forced to declassify a large trove of documents; here is one detailing their involvement in starting a brutal 50-year-long civil war in Guatemala. (h/t Cora Currier) 

Connor Friedersdorf on epidemic rates of domestic violence in United States police officer families.

Over at Jacobin, Dylan Matthews makes the case for abolishing all immigration restrictions.

"Watch this video of an armed, drunk, disobedient white man -- and his encounter with the cops. Something seem odd?"

Financial criminals have been paid billions, but they rarely pay.

On the multi-billion dollar textbook and standardized test industry:
This is because standardized tests are not based on general knowledge. As I learned in the course of my investigation, they are based on specific knowledge contained in specific sets of books: the textbooks created by the test makers...Put simply, any teacher who wants his or her students to pass the tests has to give out books from the Big Three publishers.
And only wealthy schools can afford these textbooks