Multiplication nation

By Ben Walsh
April 2, 2014

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“You can’t legislate demographics”, says Derek Thompson, surveying the economic drag of America’s low birthrate. Blame, in part, the world-record cost of giving birth in America, and the recession, for the decline of babies.

Reihan Salam and Matthew Klein don’t want to legislate for demographics, but they do want to tax incentivize for them. Here’s Salam’s solution:

Who should pay more? Nonparents who earn more than the median household income, just a shade above $51,000… We all benefit from the work of parents. Each new generation reinvigorates our society with its youthful vim and vigor. As my childless friends and I grow crankier and more decrepit, a steady stream of barely postpubescent brainiacs writes catchy tunes and invents breakthrough technologies that keep us entertained and make us more productive. The willingness of parents to bear and nurture children saves us from becoming an economically moribund nation of hateful curmudgeons.

Not everyone is ready to write a rejoinder to Rust Cohle-esque anti-natalism into the tax code. Matt Yglesias wrote in 2009 that a focus on the economic consequences of the birth rate is a vestigial agrarian impulse. His preferred policy is essentially fertility neutrality: “To deliberately constrain people from having large families would be abhorrent, but it’s not clear to me that we should be going out of our way to encourage them to do so”.

Choosing not to have a child has fairly straightforward economic benefits, beyond avoiding ten plus thousand dollars in medical costs. BuzzFeed’s Anna North says that there are economic benefits of birth control: “56% of women said contraception had allowed them to support themselves financially; 51% said it had helped them finish their education. And 50% said it had help them get or keep a job.” Part of America’s falling birth rate is the plummeting rate of teen pregnancy, which is an unalloyed good.

A very easy way to make more Americans is to let in more people into the country who want to be here. Overall US population growth was just 0.7% in 2007, so why not, Ezra Klein asked, pass immigration reform. “Immigration is essentially the importation of new workers. It’s akin to raising the birth rate, only easier, because most of the newcomers are old enough to work”.

Religious incentives can, in highly specific cases, work too. Georgia saw a 20% rise in births in 2008 after the head of the country’s Orthodox church promised to personally baptize any baby of parents with more than two kids. – Ben Walsh

On to today’s links:

Charts
The US shale boom is hurting Africa’s oil exports, not the Middle East - Izabella Kaminska

That’s Totally Reasonable
Frequent-trader Cliff Asness: HFT probably lowers costs, but “we can’t be 100% sure” - WSJ

Alpha
Working at the family office formerly known at the hedge fund SAC isn’t that attractive any more - Matthew Goldstein

Primary Sources
The McCutcheon v FEC decision: no caps on campaign contributions - Supreme Court

Data Points
The will be a projected $1 billion in additional “McCutcheon Money” between now and 2020 - Demos

Must Read
Everything about Choire Sicha’s review of Ariana Huffington’s new book is wonderful - Bookforum

Study Says
Does benign violation explain why “Cost of Living Now Outweighs Benefits” is funny? - NYer

Mt Dox
Chinese regulators are telegraphing a Bitcoin crackdown - FT

Busted Booms
The TXU buyout is not ending well for Goldman, KKR, and TPG - Bloomberg

Strange Bloomberg Headlines
Billy Salomon Turns 100 as Flash Trades Replace Handshake - Bloomberg

Oxpeckers
In defense of the paparazzi and gossip - Pacific Standard

Defenestrations
Blythe Masters quits after 27 years at JP Morgan - Reuters
Blythe Masters, roastmaster - Matthew Zeitlin

Dubious Data
Wall St analysts are finally saying the ADP jobs number is useless - Rob Wile

Takedowns
The Ryan budget is an exercise in obfuscation and hypocrisy: “no one should take seriously its claim to balance the budget” - Robert Greenstein

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