Archive for the ‘Governance’ Category

In Defense of Big Government

Sunday, October 24th, 2010

I tend to like complexity for its own sake and, because human beings are complex, useful discussions of human activity are usually complex as well.

But sometimes a simple list will make the point just fine. Via Laurie Findrich:

 

Below is a list of ten good things we have because of our large federal government:

  1. The Internet. This was invented not by entrepreneurs, everybody, but by the United States military.
  2. The Apollo program, culminating in the most marvelous of modern moments, Neil Armstrong’s famous words, “That’s one small step for a man, one giant leap for mankind.” (Yes, I too had to learn after the event that the word “a” was in there.”)
  3. Interstate highways. Thank you, Eisenhower. True, the invention of the automobile was the work of that vicious genius Henry Ford. And many think the interstate highway system led us in the wrong direction, so to speak, by making us more dependent on automobiles and trucks instead of rail transportation. But imagine driving from New York to Florida without the interstate, and you instantly see the benefits.
  4. Social Security. A federal system of retirement payments for old people prevents those of us who are not yet old, or not poor, from having to step over old people while they lie dying in the streets.
  5. Medicare. Ditto the above.
  6. The National Weather Service. I leave it to your imagination if each state handled weather by itself, or worse, if weather reporting were in the hands of private entrepreneurs. You’d never know there were storms approaching if the paid advertisers included the tourist industry.
  7. National Parks. Without the federal government, there’d be no Yellowstone, no Bryce Canyon, no Washington Monument or Lincoln Memorial.
  8. Free museums in Washington, D.C., all paid for by the Feds. Washington is the only city in the country where you can take your family from one museum to another without paying any admission fees.
  9. The FBI.  Lefties may not like this choice, because the FBI has done some very bad things, and presumably is still doing them (J. Edgar Hoover, for example, was a tyrant, over and out), but should you get kidnapped and taken across state lines this happens), they’re there for you.
  10. Progressive Federal Income Tax. Without this, states would set up a race to the bottom in income tax, with the result that all the rich people and corporations would continuously be on the move. Meanwhile, everybody else would constantly be pulling up stakes to follow them. Normal citizens would be even more frazzled trying to chance jobs than they already are.

And here’s a list of ten things we don’t have because of our large federal government:

  1. Lots and lots of plane crashes. (This one I’ll be thinking about on my way to the airport Wednesday.)
  2. Thalidomide victims (thank you to the FDA, back in the 1960s, for this one).
  3. Segregation (it doesn’t take a big imagination to figure out what some states would have done without the intervention of the federal government).
  4. Runs on banks.
  5. Endless Love Canals, without anyone or any company ever being held accountable.
  6. Employees suffering work-related injuries and diseases without employers being held accountable.
  7. Fire fighters unwilling to cross state lines during forest fires.
  8. Easy transportation, without the need for passports, within the United States.
  9. No disaster relief save for what a particular neighborhood, area or state can muster.
  10. No food stamps to help out the one in five American families who live below the poverty line.

Tea partiers have no answer for this simple list. But it sure will make them angry.

More Public Opinion Fail

Thursday, October 7th, 2010

While I’m on the subject of stupid views widely held by the public, I might as well include attitudes toward the stimulus bill that Obama signed shortly after taking office.

Recently a government report concluded that money from the stimulus bill was well spent:

By the end of September, the administration had spent 70 percent of the act’s original $787 billion, which met a White House goal of quickly pumping money into the nation’s ravaged economy, the report says. The administration also met nearly a dozen deadlines set by Congress for getting money out the door…

Meanwhile, lower-than-anticipated costs for some projects have permitted the administration to stretch stimulus money further than expected, financing an additional 3,000 projects, according to the report…”Certainly, the fraud and waste element has been smaller than I think anything anybody anticipated,” said Steve Ellis, vice president of Taxpayers for Common Sense, a nonpartisan watchdog group.

…An independent board established to provide oversight has received just 3,806 complaints — less than 2 percent of more than 200,000 awards. Prosecutors have initiated 424 criminal investigations, representing 0.2 percent of all awards. Typically, 5 to 7 percent of government contracts attract complaints, [Jared] Bernstein said.

The Congressional Budget Office reports that the stimulus has created 3.5 million jobs and kept unemployment about 1 to 2 percent lower than it otherwise would have been with very little waste or excessive delay.

This is what well-managed government looks like. Of course it was too small to produce real growth but getting a larger bill through Congress would have been impossible.

But does the public care about well-managed government?

Apparently not. As Kevin Drum writes:

Unfortunately, it’s also a testament to how little most people care about good policy and competent execution. As near as I can tell, it’s practically conventional wisdom these days that the stimulus package was a complete bust—and all because the Obama administration initially made a lousy projection about the future course of the recession and suggested that the stimulus package would reduce unemployment to 8 percent. If their forecast of the depth of the recession had been correct and they’d predicted, say, 11.5 percent unemployment without a stimulus package and 10 percent with it—which is what happened—elite opinion about the stimulus would probably be completely different.

So there you have it. Good policy and good execution gets you bubkes. All it takes is one wrong forecast number to wipe it all out. Welcome to the real world.

A Good Idea, But…

Monday, August 30th, 2010

Democrats and Republicans have competing views on how to end this recession. Democrats want more stimulus and government spending to increase demand for goods and services; Republicans want to cut taxes to encourage more spending on consumer goods.

But there is reason to think neither strategy will work.

Over the past 30 years, consumers have been spending more by going into debt assuming that increased value of assets such as homes will keep them solvent. But that created artificially high prices, especially in real estate and real estate-backed securities, that collapsed when the financial crisis hit. Thus, there has been a massive loss of wealth since the beginning of the recession which makes it harder for people and businesses to borrow money and makes it harder to service the debt they have already incurred. Until the level of debt held by individuals is brought into line with current income levels, spending will be sluggish no matter what the government does. According to  some economists, it may take 10 years to work of the excess debt in the economy.

So what to do about the recession? William Galston has the right idea:

A different era … How long will it take our policy makers and political parties to absorb the implications of that stark, undeniable phrase? When they do, they will realize that we have only two strategic options: Either we accept years of sluggish growth and high unemployment, or we shift to a new model that mobilizes the record level of private capital now sitting on the sidelines for public investments that will boost economic activity and employment in the short term, and economic productivity and growth in the long term, while generating rates of return sufficient to interest investors.

This is why we need a national infrastructure bank as the linchpin of a public investment strategy driven by economic analysis rather than congressional politics. Rather than bridges to nowhere, we need a bridge to the future. It’s time for hide-bound appropriators to get out of the way.

Our nation’s infrastructure is old and deteriorating. Now is the time to mobilize capital to rebuild it and put people back to work as well.

But what Galston fails to mention is that conservatives are likely to see a government supported infrastructure bank as more “socialism” since the idea is coming from Democrats.

Why would they be more welcoming toward this idea that any of the others Democrats have floated?

The problem is not a lack of ideas; the problem is Republican intransigence fed by public ignorance.