Is raising a child poorly the ultimate externality?

Lisa Belkin at the New York Times reports on paternalism aimed at making parents more paternalistic:

…other states have already enacted laws aimed at improving parenting. Alaska fines parents for a child’s truancy. In California, a misdemeanor charge can be brought against a parent if the truancy is flagrant enough. California is also the first state to allow judges to order parents to attend parenting classes if their child belongs to a gang.

I’m going to take the lazy route and sidestep the whole issue of whether these types of policy are a worth trying, and just say that probabilistically, I think Belkin is correct:

In the end, then, all these “punish the parents” paradigms will probably take their historical place as just one more shift of the pendulum in the sweep that already includes contradictory certainties like “children are being allowed to grow up too quickly” and “children are being infantilized too long.” Like every other new way of thinking, it will eventually be looked on as a well-intentioned but flawed reflection of a moment in time.

Paternalism watch: is there too much food coloring in our lives?

I confess, I did not see this one coming: the Center for Science in the Public Interest has asked the government to ban food coloring. They argue that the coloring worsens hyperactivity in some children. Marion Nestle recently provided a rundown of the science behind food coloring and hyperactivity, and I think you’ll agree with me that the evidence is less than overwhelming. She only discusses two studies in detail. The first had problems, and the second found that 1 out of 23 kids showed a reaction. She links to another, more recent study but doesn’t discuss it. You would think we would need clear and strong evidence of a serious affect before we talked about banning a product.

Nevertheless, whether or not food coloring causes hyperactivity in some children is absolutely besides the point. Surely a cup of black coffee would cause hyperactivity in children, and yet we haven’t banned it. The absolute most this implies is for a clear labeling of products that include food coloring. I say a “clear labeling”, because I was under the impression that product packages already had to list their ingredients, including food coloring. Am I mistaken?

Food paternalists may find this unimaginably barbaric, but some people like a little color on their cakes, and prefer their cheese curls orange. In fact, given the prevalence of orange cheese curls, colored cakes, and a million other uses for food coloring it would appear that lots of people really do like them. But the fact that people prefer them is exactly why food paternalists are targeting them, and the hyperactivity claim is really just an excuse. You can see this in the quote from Marion Nestle:

“These dyes have no purpose whatsoever other than to sell junk food,” Marion Nestle, a professor of nutrition, food studies and public health at New York University.

This issue isn’t really about hyperactivity, it’s about another cudgel with which to try and get people to eat healthier foods. This is an invasive, overreaching, and dishonest attempt at regulating food. I hope that the more extreme the proposals get the more people will hesitate to support the groups like CSPI when they call for bans on stuff they don’t like. Because today they may be coming for a product or ingredient you don’t value, but rest assured, tomorrow they’ll be after something you do.

Slippery slope watch: sometimes paternalists make it too easy

Recently the FDA banned Four Loko, which was silly because I can still go into a bar and order a Red Bull and vodka to satisfy my caffeinated alcohol needs. Of course the slipper slope being what it is, some lawmaker somewhere was sure to step and draw the logical conclusion that these drinks too should be banned. And right on cue, Iowa state senator Brian Schoenjahn has proposed a bill to outlaw any caffeinated alcoholic beverages from being sold, including mixed drinks from your neighborhood bartender. I’ve argued before that paternalists are wrong to scoff at the notion that a slippery slope exists, but sometimes lawmakers make it way to easy to prove them wrong.

H/T @jbarro

The Happy Meal Slippery Slope

Well that was fast! A few weeks ago I was wondering where we would land next down the slippery slope of paternalism after San Francisco moved to ban toys from Happy meals with more than 600 calories and 35% of the calories from fat. I’ll confess that I did not predict that the next step would be the State of California banning all happy meal toys, widening the ban in both geography and scope. Via Megan McArdle, here is the scoop:

With perfect Grinch timing, a consumer group has sued McDonald’s demanding that it take the toys out of its Happy Meals.

The Center for Science in the Public Interest, an advocacy group, claims it violates California law for the hamburger chain to make its meals too appealing to kids, thus launching them on a lifelong course to overeating and other health horrors. It’s representing an allegedly typical mother of two from Sacramento named Monet Parham. What’s Parham’s (so to speak) beef? “Because of McDonald’s marketing, [her daughter] Maya has frequently pestered Parham into purchasing Happy Meals, thereby spending money on a product she would not otherwise have purchased.”

….she’s suing because when she said no, her kids became disagreeable and “pouted” – for which she wants class action status.

As the New York Daily News reports, the “allegedly typical mother of two” who is bringing the suit, Monet Parham, is actually not a typical mother of two:

…she is in fact the same person as Monet Parham-Lee, who is a “regional program manager” on the state of California payroll for child nutrition matters.

Specifically, she works on a federally funded program that campaigns to exhort people to eat their vegetables and that sort of thing.

My question is this: is someone who admits she is unable stop herself from buying McDonalds for her children really the kind of person we want as regional program manager for child nutritional matters? Isn’t this a little like putting an admitted drunk driver in charge of a states anti-drunk driving program? Or a gambling addict in charge of gaming laws?

It sounds like the lawsuit is in early stages right now, here’s to hoping the good people of California come to there senses and trim down the insane consumer laws they must have that make this lawsuit even thinkable.

We’re always at the bottom of the slippery slope

I have argued that the slippery slope of paternalism is real, and we are sliding down it. Defenders of paternalism argue there is no slippery slope because a) where would we fall from here? and b) why haven’t we begun sliding yet? I rush to point out paternalism that targets sugar and salt, and the defenders argue “Well, that’s just good policy. Let me know when we’ve actually started sliding down the slippery slope”. What happens is paternalists are forever moving the goalposts, and declaring the newest ban or tax just reasonable policy. Their burden of proof demands that that we slide two, three, or four steps down the slope at once instead of one step at at time, since the one step we’re taking now is just reasonable. We’re always seemingly at the bottom of the slope, and things aren’t so bad from here are they?

Well folks, we’ve reached a new slope bottom: San Francisco has banned the McDonalds Happy Meal.

Since paternalism defenders will surely claim this is “just reasonable policy, and if there is a slippery slope then where could we possibly slide to next?”, let me repeat what I wrote awhile ago:

I think it would be useful to for critics of the slippery slope theory of paternalism to demarcate now what future policies would constitute evidence that they are wrong, because my guess is the point of demarcation will move right along down the slope with policy. Several years ago many of todays critics of slippery slope theory would have said that an attempt to regulate salt would constitute evidence. But now, farther down the slope, salt regulation is just sensible policy.

Scientists against salt regulation

When the Institute of Medicine recommended broad, draconian regulation of salt last year, I pushed back against the idea, one might say, obsessively. Now, via Marion Nestle, comes a new paper in The American Journal of Clinical Nutrition arguing that the current level of sodium intake is not a problem for the population. The article comes with an accompanying editorial titled  “Science trumps politics: urinary sodium data challenge US dietary sodium guideline” that closes with this appeal:

The analyses of extensive measurements of 24-h UNaV, which these 2 reports have collected from the medical literature over the past 5 decades, are compelling. They provide plausible, scientific evidence of a “normal” range of dietary sodium intake in humans that is consistent with our understanding of the established physiology of sodium regulation in humans. This scientific evidence, not political expediency, should be the foundation of future government policies, thus respecting the known and unknown scientific complexities surrounding sodium’s role in health and disease. Guidance for sodium intake should target specific populations for whom a lower sodium intake is possibly beneficial. Such an approach would avoid broad proscriptive guidelines for the general population for whom the safety and efficacy are not yet defined. An appropriate next step is not to lower the sodium guideline further.

You can find my previous coverage of salt regulation here, here, here, here, here, and here.

Food Stamps and the Excess Cash Balance Mechanism

Riffing off of Adam’s post on the NYC food stamp decision, I have found it useful to think of the issue through the lens of the excess cash balance mechanism (or in this case, excess stamp balance mechanism).

For those who may not be familiar, this is a concept in which adding to the supply of money causes investment/spending to increase due to individuals and firms having cash that is sitting idle, earning no return. It is a fundamental concept in “monetary disequilibrium”, and I think that it applies here.

First, let me state that regardless of the particulars of the issue, my position is that this is well outside of my comfortable level of paternalism. I had a Twitter conversation with (I believe) Adam last night about the issue, in which he brought up the fact that this could be a cheap way to buy health, and thus is comparatively libertarian at the margin, but it still doesn’t inspire me. That is why comments like this from Melanie B strike me as odd:

If you provide low-income individuals and families with vouchers to purchase foods, especially if those individuals also receive Medicaid or other gov’t-subsidized medical care, it is totally counter-intuitive to allow the use of such vouchers on items that do not assist with nutrition (as the mission-in-the-name clearly states).

In any case, on to a quick note about how I’m currently thinking about the issue. Suppose you have $100, which you consume completely in each period. You average 10% a period on foods that are now banned, thus giving you an “excess stamp balance” each period of $10. In the cash economy, people rid themselves of excess cash balances in three ways; increasing their stock of wealth by saving (by hoarding dollars or buying antiques, etc. [in a Nick Rowe economy]), engaging in higher current consumption, or delaying current consumption by loaning the cash out (i.e. buying stocks/bonds).

Unfortunately, in the food stamp economy, it is only possible save in a roundabout way (not in currency)*, as I don’t think that food stamp accounts accumulate interest (but correct me if I’m wrong!). People could definitely consume more (different) foodstuffs, or they could loan out the funds. I’m using loan here very loosely to describe the act of barter exchange. It seems to be fairly common for people to organize trades in which they purchase food items for other people, who then pay cash for the items that the person using food stamps wants…and then they trade the items.

I think the most likely set of substitute transactions is the barter situation, but even if increased consumption is the result of having an excess stamp balance, that of course doesn’t guarantee a healthy diet. However, it is possible that for some people the extra stamps will be enough to push them out of inferior good territory, which would actually be a Pareto superior outcome, which would come at very little cost.

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*As Rebecca Burlingame points out in the comments:

Temporary savings = frozen dinners, which can be eaten next week or month. Long term savings = honey or something sugar preserved like syrup or jam, can be eaten next year!

Soda, food stamps, and paternalism

Michael Bloomberg and David Paterson announced a proposal yesterday to ban the purchase of soda with food stamps. It is sure to be controversial, but is it a good thing?

At the very least, if the government is determined to try and reduce decrease public expenditures on health care by reducing soda consumption, than this is a preferrable approach to a soda or sugar tax. A first best approach would be to tax individuals who a) are drinking enough soda that it increases their risk of illness, and b) with some probability part of their health care costs will be born by public.

Since foods stamp recipients seem like a likely target for b), this at least meets one criteria. In contrast a general soda tax falls on everyone, and meet neither criteria. Even with the more targeted food stamp approach, people whose soda consumption is at safe levels or who have private insurance will be inefficiently restricted by this.

I have not looked at the data myself, but the conventional wisdom and the contention of the proposed law is that a) is very much true.

The whole discussion of course presumes that the law actually reduces soda consumption. For one thing, if individuals are paying some non-soda food costs with cash they can just shift to spending that cash on soda. There are also ways to trade around this: I buy $10 worth of soda with cash, you buy $8 worth of food with food stamps, and we trade. In either case though, transaction costs have been raised, although in the former the amount may be very slight.

Another problem is that individuals may respond to the lower calories by simply consuming more calories. While researching the health effects of soda for my recent defense of diet soda, the literature appeared mixed as to whether switching from regular to diet soda caused weight loss because of the calorie substitution problem. Perhaps Karl will chime in on this; he is much more knowledgeable about all things obesity.

The final question to ask is whether this policy is simply too paternalistic? I have to say I don’t think it is. Food stamps by themselves are already highly paternalistic. Essentially they tell low-income people that on average they will not spend cash in a way that best benefits them and their family. The government defines a subset of goods and tells them “you will be better off if you stick to these goods instead of buying what you want”. The marginal paternalism of reducing the size of the goods the government allows is slight compared to the paternalism food stamp recipients are already enduring. If your significant other tells you that you have to go to bed between 9:30 and 10 that is highly paternalistic. If they further refine that and decide it has to be between 9:40 and 10 it’s not that much more paternalistic. Perhaps this graph will help:

Another issue that you are free to reject, as it just reflects my diet soda bias and my love of delicious aspartame, is that I suspect much of the continued preference for regular soda over diet soda despite the health advantages is motivated by a lack of understanding of the safety of diet soda. Fear not New Yorkers, despite the email chain letters and urban legends, diet soda is not bad for you.

Overall though we should be weary of this kind of paternalism, and the desirability depends on how effective it would actually be. However, given the high level of paternalism in food stamps already I don’t consider this marginal paternalism to be that troubling.