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Published: January 24, 2004 Publication: Connecticut Post By: Frank Keegan Click here for the original article So what does that have to do with poor children falling into the social abyss? Cutting to the pith, its unwritten slogan is simple: Protecting American Wealth for Over 90 Years. There is no colder, harder, bottom-line dedicated institution in the world than the Federal Reserve Bank. He is senior vice president and director of research for the Federal Reserve Bank of Minneapolis. But what makes us different is we need proof. What makes Rolnick different is that he's no bleeding heart liberal whiner. Rolnick was preaching to the converted with this crowd. Most there have stated on faith for decades that a society taking care of its children is a good thing. Other species know that instinctively. They gathered in Fairfield University's Dolan School of Business to hear a panel discussion on that complicated subject. He had just finished firing up about 100 true believers on the economic development value of early childhood investment. "We're bringing some of the rich guys to the table in Minnesota," Arthur J. Rolnick said Friday morning in response to that premise. "Eight CEOs." What it all boils down to, as it always does in the short run, is this: The politicians will do whatever the rich guys tell them to do. According to Rolnick, everything. And he can prove it. With real numbers. Economic development is a core value of the Fed. Government sinks billions into economic development schemes. A growing number of experts, including Rolnick, think most of the investment nets out to zero or less. In a recent paper for the Minneapolis Fed he argued "the case for these subsidies is short-sighted and fundamentally flawed. . . . From a national perspective, jobs are not created they are only relocated." A study he and analyst Rob Grunewald conducted found that money invested in early childhood development yields a real, inflation -adjusted internal rate of return of 16 percent a year. Good investment. Their cost/benefit analysis showed every dollar invested yields $7.16 in tangible, spendable, taxable public good. Calling himself a laissez-faire conservative, Rolnick admitted "there are some areas where the free market fails. "The market on its own is not going to worry about early childhood education and development. Business must worry about the bottom line." True enough. But there is a real, long-term bottom line that says social decay and eventual collapse is not particularly good for business. That is what we face if millions of Americans are stunted by recent powerful social and economic forces from early childhood on. We see now that many of our fellow citizens are uneducable, unemployable, prone to crime and dependent upon massive social services because traditional enculturating and educational mechanisms have collapsed. Your average baboon troop invests more time, energy and resources into its infants than modern humans do. We all can sit around wringing our hands and decrying social, moral and economic decay if we want to, but that is not going to turn back time or solve the problem. Actually, we can't afford not to. We are throwing economic development subsidies into a sinkhole anyway. Why not try this? The problem with public policy is it doesn't necessarily respond to those who need it most. As panel member Diane Farrell, Westport First Selectwoman, pointed out, "Five-year-olds can't vote." And unfortunately, mothers and fathers of the children most at risk generally don't vote. These children and their parents have no clout, political or otherwise. Nobody needs them. Powerful men never listen to them. But they do listen to people like Rolnick. Rich guys pay attention to the Fed. Politicians pay attention to rich guys. We have plenty of both here in Connecticut. We can invest in children, not only because it is right, but because it's good business. We must deal with it. "This clearly is a matter of public policy," Rolnick said. With an $11 trillion economy, "we can afford to invest in early childhood education."  |
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