Tag Archive for: JanetYellon

Treasury Secretary Janet Yellen Says Abortion Restriction is Bad For the Economy

Estimated Reading Time: 6 minutes

Usually, the abortion issue is so difficult, because at least one side of the argument contends a baby is being killed. One side sees a human that has value and standing, while the other side tries to argue it is not human life independent of the mother. A pregnancy becomes sort of like a mole to be removed at the discretion solely of the mother, even though a man is not involved in forming a mole and the mole can never live an independent life.

One side says the living thing must be “viable”, although that is not defined. Those of us who have been parents might contend that would be around the age of 25.

If the standing of the baby is put on an equal legal and moral footing with the mother, the argument devolves to the discussion of whether new human life is worth the inconvenience to the mother. Oh, we all know that some contend the baby in early stages are a clump of cells. But these cell clumps cannot become asparagus, they are human cells that form a baby much earlier in pregnancy than was thought back in 1973.

Janet Yellen, Secretary of the Treasury has decided to wade into the emotionally tangled abortion argument with a novel moral free view. According to her, abortion is good for the economy

A prominent economist in her own right, and the wife of a Nobel Prize-winning economist, and former Chairman of the Federal Reserve, she said this before Congress with the obvious timing of trying to urge the Senate to pass Federal abortion legislation, which it failed to do.

What triggered her remarks, besides the question asked, is her belief that the recently illegally obtained leaked opinion means the end of abortion, and that therefore the Federal government should act.

It doesn’t. It means it will be decided democratically by the states. Thus, some states may have no restrictions, some states might have some restrictions, and some states may outlaw it.  She does not know how this will turn out any more than anyone else. So, her first assumption is wrong.  But what about her economic argument?

She tacitly admits that we are talking about is a baby because she goes on to argue that women, having to take care of a baby, have to modify their educational and professional choices and that these decisions could reduce female productivity and potential, and hence economic growth

Data on abortions often comes from the Guttmacher Institute, which is part of the abortion industry, so should be suspect. They suggest that 1 in 4 women have abortionsWhat they don’t say is that they are highly concentrated in the Black community. Thus, abortion is among a minority of women, therefore an even smaller portion of the entire population, and concentrated among the poor. Abortion is not ongoing but rather concentrated among women in their 20s. Pregnancy itself only affects a portion of a woman’s life. Assuming the validity of the argument, that seems unlikely to move a $20 Trillion economy.

Notice the implicit argument that abortion is birth control. It isn’t. It results from a lack of birth control. Birth control today is reliable, available, and very inexpensive. Birth control allows women to be sexually active and allows them to complete their education.

Before birth control, most people knew not to engage in sex until they were ready emotionally and financially. Often that meant, waiting for a good life partner. So, between birth control, and self-control, women will have a wide latitude to acquire skills. Their opportunities will not disappear because some restrictions might be placed on abortion.

It is pretty clear the economy grew quite rapidly after the industrial revolution and the standard of living climbed higher and higher, from roughly $2 a day in 1750 to about $300 dollars a day today. During most of that period, there was no state-subsidized unrestricted abortion. How did the economy manage to grow before Roe if most women were being inconvenienced by children?

Oh, because children were needed for agriculture. Really? After World War II, the global economy boomed despite a gigantic baby boom that did not go into agriculture. How come all those kids did not slow down the economy? There is a better case to be made, that they helped the economic boom, with all the cars and furniture, housing developments, and schools that needed to be built. Exactly how does a shrinking population stimulate demand?

Economic growth, boiled down to its essence, is productivity plus population growth. Rampant abortion certainly reduces one part of the equation and it is not clear if it adds to the other.

There is also scant evidence that among poor blacks where abortion is most frequent, those special skills are acquired whereby productivity is increased.  Indeed, the skill that seems developed is generational welfare cases.

There is another obvious flaw in her argument. The dreaded tradeoff between economic conditions and raising children must be made by women who have children all the time. In fact, it is the story of most families.Most women manage to get educated and work and yet have children. We marvel at the tradeoffs most working mothers perform. Working mothers, and mothers that work after children, are among our most productive workers.

Some mothers even leave the workforce for a while, only to return later. Motherhood is not an economic ball and chain.

In many families today, the woman makes more money than does the man, and men are expected to participate in household activities far beyond what their grandfathers did. In short, most families with children work it out, with both parents working. Sometimes Dad has to alter his plans as well.

She seems to imply if you don’t abort the baby, the family, and the nation will be impoverished. That clearly is not the case. Abortion rates have continued to fall since 1973 and the economy grew pretty nicely. If what she alleges is true, how does she explain that?

Many women quite sensibly wish to have a male partner when having children. Studies show that married men with children work harder and are generally more successful than unmarried men. That would seem an economic offset. Therefore, it is hard to see her argument unless her view is narrowed to only the poorest women, who cannot, or will not pair with a man.

It is also interesting that Democrats make the argument that children from poor women are a burden to the economy and society when their immigration policies are geared towards importing as many poor women with children as possible. These female “migrants” don’t abort their babies, they have them at our expense in our hospitals.

Fewer children create a problem for the economy on a variety of levels. It means less demand, and fewer taxpayers to support our unfunded social entitlement system. This Ponzi-like system was never actuarily designed to support a large population on the back of a shrinking one. That is why Social Security and Medicare are going broke. Sure, there are other problems with those two gigantic programs, but the most severe problem is that in 1954 there were about 14 workers supporting one retired person. Today there are about 3 workers for each retired person, and even that low level is shrinking.

In the broader sense, Yellen misses another important economic principle. There are two kinds of capital: human capital and physical capital. Of the two, human capital is far more important as it is the grey matter between the ears that invent new machines, new technology, and new ways of doing things. Without human capital, there can’t be physical capital.

Even natural resources are not valuable without human capital. For example, Native Americans roamed over vast lands that had oil, gold, and copper. However, given their state of technology and nomadic lifestyle, it was completely worthless to them. It was not until human capital found ways to use those resources that they became valuable.

The trouble with Progressives is that they see people as mouths to feed in an economy that is a zero-sum game. More kids take resources from something else. Or as Paul Ehrlich and some environmentalists see it, more kids harm the earth.

Conservatives certainly see a mouth to feed, but they see two hands and a brain that can deal with the problem. The ultimate resource is the human brain, which if unleashed by freedom, can take sand and turn it into a semiconductor that can process more data than a stadium full of abacuses.

Human brains can only come from humans, new humans to replace those that die. When you abort a large segment of the future population, you produce less human capital, the basis for all wealth.

How many craftsmen, inventors, teachers, soldiers, statesmen, scientists, and musicians have we killed off? It is estimated more than 60 million. That is a lot of human capital to destroy.

Abortion is both a difficult legal and moral issue. But bottom line, the question is do you like people, and do you think humans are worthwhile? Progressives seem to hate people but love mankind.

It is clear that the party that says they support the aspirations of Black people doesn’t seem to mind if a Black mother is 8 times more likely to abort than and Caucasian mother. Black women account for 38% of all abortions, yet are only about 6% of the population. But reducing the Black population was always the aim of Margaret Sanger, the founder of Planned Parenthood. She wanted only the “right kind of people” to have babies. Yellen quite inadvertently gets uncomfortably close to the assumptions of Sanger.

Finally, if we want to discuss what harms the economy, it would be worthwhile to review how Yellen as Federal Reserve Chairman, and as Treasury Secretary, helped unleash the worst inflation in 40 years, distorted capital markets with huge Fed bond purchases, zero interest rates, and massive Covid relief with printed money.

Want to look for causes of economic malaise? The lady should look in the mirror.