John Edward teaches economics at Bentley and UMass Lowell. He’s a frequent contributor of columns on economic issues. Here is his latest:
There are three things certain in life. Benjamin Franklin identified death and taxes. The third certainty is that without taxes and government intervention, people will die.
Two years ago I discussed when we should apply the Supreme Court’s strict scrutiny standard to economic policies. Strict scrutiny requires a compelling state interest with an absolute focus on purpose. We should apply strict scrutiny to tax incentives. They are not very effective if the purpose is economic growth. The state does not have a compelling interest in giving money away to companies who lobby for the tax breaks.
Last year I explored examples when we should examine economic policies using the court’s mid-level scrutiny standard. Mid-level scrutiny requires an important state interest and a demonstrable and substantial connection to purpose. We should apply mid-level scrutiny to farm subsidies. Providing affordable food is an important state interest. However, there is not a substantial connection to purpose, unless the purpose of the subsidies is to fatten the profits of agribusiness conglomerates.
The third and final standard is minimal scrutiny. It sets the bar lower than strict and mid-level scrutiny. When the court applies minimal scrutiny they consider government action “nonsuspect” as long as it has a “rational” basis. Laws are ruled invalid only if “arbitrary or capricious.”
We should use minimal scrutiny when severe economic problems threaten lives or livelihood. Only minimal scrutiny is required in response to socio-economic crises.
Applying minimal scrutiny does not imply simply throwing money at problems. It does not automatically justify any program, any expense, or any means. Rather, in the face of economic crises, we should judge the necessity of government action to pursue critical ends with minimal scrutiny.
In 2009, I interviewed a community organizer in Lowell. We were in the middle of a financial crisis that had led to an economic crisis. The organizer asked: “what defines a crisis — is it not a crisis when large numbers of people are homeless?”
We should apply minimal scrutiny in reducing the number of homeless children in America. The crisis of ongoing homelessness in America presents a compelling and rational basis for government action.
An estimated 1.6 million children in the United States, or 1 out of every 46, were homeless at some point last year. A January 2013 count of homeless in Lowell reported 559 homeless people, 204 of them children. The U.S. Department of Education reports a record number of homeless children enrolled in school.
We should apply minimal scrutiny to reducing childhood hunger. Studies show that hungry children perform worse in school. The United States should be able to feed its children. The private sector is not going to make it happen.
One out of five children in the United States live in families that are “food insecure.” Food insecure means not having enough money to buy enough food for a household. In Massachusetts, one out of six children try to learn while malnourished.
We should subject the need for programs to protect abused or neglected children to minimal scrutiny. An organization that has been suspect lately is the Massachusetts Department of Children and Families (DCF). They have a tough job. Unfortunately, somebody has to do it.
In their most recent annual profile, DCF says it handled almost 84 thousand reports of child abuse or neglect in one year. DCF served over 67 thousand people, and placed over 6 thousand children in protective placement. They do all this on a budget that, even with proposed increases for next year, will be less than it was in 2009.
We should closely scrutinize DCF when bad things happen to children under their care. However, the need for the care they provide should be nonsuspect.
The city where I grew up, Fall River, is getting a lot of scrutiny for poor school performance. The numbers are shocking, yet not surprising. Economically disadvantaged children do not do as well in school, on the average. Reasons include, but are not limited to, unstable housing situations, hunger, and problems at home.
According to the U.S. Census Bureau, 30 percent of adults (age 25 or older) in Fall River have not earned a high school diploma, and only 14.5 percent have a Bachelor’s degree or higher. The numbers for Lowell are not much better, 22 percent without a high school diploma, and 22 percent with a Bachelor’s degree.
Fall River is receiving help from a National Resource Network as part of a pilot program set up by the Obama administration. Children are our greatest national resource. If this federal government network can help economically disadvantaged children learn, then we should consider it neither arbitrary nor capricious.
Market forces are not going to fix these problems. They all require government intervention – good government.
These problems are also opportunities. The best investment we can make toward a better economic future is in children. Children are the future. Making investments that will improve the ability of children to become healthy, happy, and productive adults, should be treated with minimal scrutiny.
In the text American Constitutional Law by Kommers and Finn, when describing minimal scrutiny the authors state: “the Court reviewed laws and administrative acts with minimal scrutiny of means and virtually no scrutiny of ends.”
No scrutiny of ends is unacceptable when it comes to public policy. There should be minimal scrutiny with respect to justifying government action in the face of urgent problems. However, if the problems are urgent, and if the government is going to be spending our tax dollars, we should closely scrutinize the results.
In Massachusetts, scrutinizing economic policy is a role the State Auditor can and should play. More on that topic in my next column.