Saturday, September 14, 2019

#257 / When It's Time To Make A Move

Raj Chetty
The Atlantic recently published an article titled, "The Economist Who Would Fix the American Dream."

Raj Chetty is the economist so identified, and according to The Atlantic, there is no question about whether or not Chetty will receive a Nobel Prize. The only question is when. The Atlantic article gives us the details of Chetty's formidable resume and lists his many accomplishments. He has already been awarded one of those MacArthur genius grants.

With respect to that "American Dream" deal, Chetty's research says that if you want to have the American Dream for your children, the best thing you can do is to move to an upper income area. "Moving" is the key thing. The article is worth reading, although the "insight" provided is certainly not going to be big news to any parent who cares about the future that his or her children will experience.

As it turns out, "moving" is exactly what my parents did, and to my benefit, when I was in first grade. 

At that time, my family lived in Redwood City, and I might well have been on my way to becoming a genuine juvenile delinquent. I had not yet attracted the official attention of law enforcement, but I was certainly heading in that direction. The Spanish word "travieso" means "naughty." I was definitely travieso! I can't remember all the incidents of shameful misbehavior in which I was involved, but there were a number of them. My parents must have been concerned. That might have been one of the reasons that they moved. 

At any rate, whether I was the cause or not, my parents did move from Redwood City to Palo Alto, a considerably more upscale environment, and while I continued to carry out minor depredations from my new home at 1201 Parkinson Avenue, adjacent to what was then the Palo Alto Military Academy, I ultimately shaped up and became a model citizen. Probably, my income-earning potential was improved, too, by my parents' move, and this is the main claim that Chetty makes. People should try to "move" to a better area as a way to "move up" to the American Dream. His statistics prove it works!

A nonprofit with which Chetty is associated, Opportunity Insights, is trying to develop programs to help families move to areas where their children will benefit from the increased opportunities found there. The group has "created a program with 'housing navigators,' who point participants toward areas with relatively high opportunity, help with credit-related issues, and even give neighborhood tours."

As I say, my personal experience convinces me that Chetty is definitely "on to something," but I doubt that the insight that underlies his efforts is any "news" to anyone. Moving to a better area, an area with more "social capital," as Chetty calls it, will definitely help the children of those able to make such moves. After the move, the children will advance more than they otherwise would. I have a hunch, though, that trying to do this in any large-scale way (and that is the ambition of Opportunity Insights) is not going to be easy. "Housing Navigators" won't be able to change the realities. In fact, it might be fair to question Chetty's probable eligibility for a Nobel Prize, if the award of that prize were to be based solely on his suggestion that the solution to poverty is for the family to move to a more upscale neighborhood. The problem, of course, isn't that parents don't ever think about "moving" as a worthwhile strategy for family success; the problem is that most families can't actually do it.

My advice to the Nobel Prize Committee is to keep looking, as the Committee considers upon whom to bestow its prize in economics. Speaking personally, I do want to give a shout out to my parents. They didn't have any "Housing Navigator" to help them find out where to move. They figured it out on their own. They didn't win the Nobel Prize, either. They were not awarded a MacArthur "Genius Grant." They were just really wonderful parents.

Luckily for me, my parents were in an economic position that allowed them to make that move. I think we need to consider the issue of income inequality as we think about that "just move" advice that Chetty is providing. As Bernie Sanders has been saying since 2016, and before, we need to rearrange our politics to redress that 1% / 99% imbalance that is the real cause of many of our problems.

There are a LOT of wonderful parents out there! Let's make sure our political decisions give them the economic wherewithal to "make the move" that can change their family's future!

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