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James Kwak misfired. Blaming poor financial decision skills on lack of education, parenting, or peer inspiration, is beside the point. It is not required that the poor be congenitally worse at decision making for the question of whether cash is an optimal form of welfare to be relevant.
It’s easily imaginable that in some cases the decision-making of some group is so bad that even centralized life-planning by a government bureacracy results in better outcomes for them.
It's interesting that James Kwak's more liberal commenters failed to seize on this happy (for socialists) thought, but rather have focused on defending the poor from the insinuation that their own decisions could have anything whatever to do with their poverty. (Said with a minimum of snark; I don't think rational people would argue that poor decision-making is the sole cause of poverty, but I don't think they'd deny it plays a role, either).
You underachived, Bryan - let’s produce the graph which demonstrates at what level of decision-skills a population is better served by totalitarianism!
Kwak and his readers are missing another perhaps serendipitous (from their perspective) take on the paper: an in-kind welfare state is preferable to a cash welfare state.
I think this is probably wrong. But it seems to hold if they take behavioral conclusions seriously. So much for making lemonade and seeing silver linings!
In other words, the policy implication of the paper could be to weaken the case for vouchers. A real world test of this (as opposed to laboratory behavioral experiments), would be to see if educational vouchers improve outcomes for the poor.