The only valid explanation I can think of for our obsession with babies is evolutionary - you need some overkill hormonal persuasion to bond with babies. So every individual who has gone through such a period has some understanding of other individuals' love for babies - they're being empathetic when they hear someone say "I love my baby more than anything".
People at large want to have kids, they want to not die from treatable illnesses. Even when those two goals are at odds with optimal economic realities societies will still try to attain them, because we build societies and economies as a means to an end to attain our goals, we don't live our lives purely to satisfy economic efficiencies.
We're an organism that's the product of billions of years of evolution, all organisms try to spread their genes to the next generation. To say that you're better off with one child who's a collage graduate than two who aren't might be true economically, but ignores what's fundamentally driving us all forward as an organism.
Does anyone really think the primacy of reproduction can be superseded by some clever economic theories?
But society, luckily, isn't some autonomous macro-organism that can treat people like individual cells in your body. So when we say that we value babies above all else that's a projection of the individual aspirations of the members of that society.
An average member of society will care much more about the health of their family and children than maximizing the GDP of their country, and government policy and rhetoric luckily at least partially reflects this.