Archives: 07/2009

One Web Site: $18,000,000

A company called Smartronix will get $18,000,000 to redesign Recovery.gov, the federal Web site intended to track where federal Recovery Act spending goes.

The government purchased technology for a similar site (with a somewhat smaller scope), USASpending.gov, from the non-profit group OMB Watch for only $600,000. A private company already provides information on Recovery Act spending to the public for free.

[Update: A link formerly just above at “for free” has been removed. To learn the unusual circumstances of the removal, check out: Copyright Law’s Abuse.]

I wrote here enthusiastically about the plans of the Sunlight Foundation to go after this contract, saying “[T]he contract award will now be subject to public scrutiny. Value-for-dollar to the taxpayer will be easily discernible, and that will raise the political risks of awarding the contract based on cronyism or go-with-whatchya-knowism. Transparency in all things.”

Sunlight did not ultimately bid. Instead, it took some lessons about the government contracting business. The transparency I wrote about materialized, though, and we can take a lesson, too: The federal government will pay $18,000,000 for one freaking Web site.

Strike a Blow for Freedom: Don’t Buy GM

Time and again my colleagues and I have warned that the government’s takeover of GM would divorce business decisions from economics and wed them to politics ‘til death do they part. But I won’t gloat. Better to be right and satisfied that government is reasonably restrained than right and house hunting in Galt’s Gulch.

We’ve already seen the president insist on the firing of a CEO, design and negotiate a bankruptcy plan devoid of much economic merit, impose preferences about which models to produce, and assure the diabolical, undeserving management of the UAW that GM won’t import small cars from its foreign plants to make space for its U.S.-produced budget-busting green vessels.

Now Congress is attempting to legislate its way into the boardroom. Last month, GM/Obama announced plans to terminate 1,300 dealerships, as part of a larger effort to reduce costs and, ultimately, turn a “profit.” (The term “profit” is, shall we say, imprecise in this case given the amount of production subsidization, fuel taxation, and tax code inducements that will be necessary to sustain GM for the foreseeable future). But many in Congress don’t like the idea. As reported in the Detroit Free Press:

By a unanimous vote, a U.S. House committee has approved a measure that would restore 2,100 dealers either cut or scheduled to be closed by General Motors Corp. and Chrysler Group LLC.

…The bill would turn back the clock to before the companies filed for bankruptcy, restoring the 789 dealers cut by Chrysler and 1,300 dealers GM chose to wind down.

…Executives from GM and Chrysler have both told Congress that cutting dealers was essential to their survival outside of bankruptcy, saving each company billions of dollars a year and strengthen their remaining sales force.

“This legislation, if passed, would put our long-term viability at risk,” said GM spokesman Greg Martin.

I suppose you can’t really blame Congress for trying to impose its wishes on GM. After all, the Constitution is silent on the matter of which branch of government furnishes the CEO of nationalized companies.

But in all seriousness, this legislative effort is an affront to common sense and an insult to our heritage of free enterprise and capitalism. It is stunning enough to watch the slow-motion nationalization of an iconic behemoth like GM, but Congressional meddling at the operational level to stop the company from following through on an obviously wise cost-cutting measures should be a wake up call to all Americans that we are doomed to politically-driven micromanagement of the economy–into the ground no less–unless we register our disgust and dissent now!

What makes these actions evil, and not just stupid, is that Congress really does not care about whether GM is profitable or not. The Henry Waxmans of the Hill only care that GM produces green vehicles, regardless of their exorbitant costs of production and scant consumer demand. And the John Dingells (among whom are included the 200 sponsors of the bill to restore the dealerships) only want GM to provide jobs, regardless of the fact that GM needs to scale back its labor force substantially to even approach the realm of commercial viability. In other words, Congress demands that Americans subsidize GM because GM’s short-term viability is good for their political fortunes.

Enough. Show Congress that you won’t comply and that you won’t be pawns. Boycott GM. Boycott GM until the government relinquishes its grip on the company’s decision making process.

Jeff Flake vs. the Spending Robots

Rep. Jeff Flake of Arizona is one of the very few fiscal policy heroes in Congress. Last night, he was doing what he does best – offering amendments to cut funding from a wasteful appropriations bill moving through the House.

Flake tried to strike spending earmarks slipped into the bill by both Republicans and Democrats. Watching the action on C-SPAN, I was struck by what a bunch of robots the big spenders defending the bill were. They said things like “this project is very important,” “it will help people,” and “it has a rate of return of 30-to-1 for every tax dollar spent.”

Flake pointed out the simple logical flaws in the spenders’ arguments. If an earmarked project is so important, why doesn’t it get funding through the normal competitive process? If a project has such a high return, wouldn’t private investors swoop in to earn the big profits? The “high return” claim is a commonly used gambit by big-spending politicians. Economist Martin Sullivan calls it the “liberal Laffer curve.”

Anyway, the spending robots listened politely to Flake, then they focused back in on their staff-prepared bullet points and continued with their self-interested drivel about how the nation’s fate rested on federal aid for the Elvis museum back in their hometown, or whatever their particular project was.

Flake presented some interesting statistics on the earmarks in the agriculture appropriations bill being considered last night. As shown in the chart below, two-thirds of the earmarks go to a small, exclusive club within the House of those on the appropriations committee, committee chairs, and party leadership. He characterized the appropriations process as a “spoils system,” which is evocative of government corruption of the past, such as Tammany Hall.

But unlike the original Tammany Hall, today’s spoils system is not party-based. Instead, it’s run by an elite and bipartisan group of spending robots within Congress, who pose as representatives of the people when they travel outside the beltway. As Flake implied, it’s odd that the great majority of members and their constituents, who get the short end of the stick from the spoils system, don’t revolt.

TSA Search Overturned

A federal judge just threw out three fake passports discovered by a Transportation Security Agency (TSA) screener, holding that the search exceeded the TSA’s aviation security mission. (H/T Bruce Schneier)

This is long overdue; the TSA has moved beyond its original mandate and is now conducting searches for “contraband.” The search for anything that seems suspicious can quickly turn into an inquisition at the security checkpoint. Campaign for Liberty staffer Steven Bierfeldt experienced this at the St. Louis airport, and is now suing to prevent future searches beyond what is necessary for aviation security.

The invasive searches don’t add much to airline security anyway. Just as GAO investigators consistently defeat security at federal buildings, TSA screeners often fail to find fake explosives on security test teams.

As Bruce Schneier points out in his excellent book, Beyond Fear: Thinking Sensibly About Security in an Uncertain World, the two effective changes in airline security since September 11, 2001 have been (1) hardening of cockpit doors; and (2) airline passengers will resist because they know that their hijackers are playing for keeps.

Schneier spoke at Cato’s two-day conference on counterterrorism in January. Video at the link.

Debate over Duncan’s Record in Chicago

At The Quick and the Ed, Chad Aldeman disputes my assertion that Duncan’s impact on Chicago public school achievement was near zero.  To make his case, Aldeman cites the fact that scores rose during Duncan’s tenure on 3 out of the 4 available NAEP tests. While true, this evidence actually supports my assertion rather than either Aldeman’s or Duncan’s.

Chicago’s gains on the NAEP tests ranged from 0.3 to 7.2 points on the 500 point scale, averaging out to a 1% increase in scale scores. I think 1% is pretty darn close to zero, and that’s what I said.

What’s more, as I wrote yesterday, the minuscule 1% improvement in Chicago NAEP scores was statistically identical to the improvement made by students in large central cities all over the country during the same period, so “The Duncan Effect” – his value-added over other large city superintendents – was precisely zero.

If there are other relevant data that I’m unaware of that paint a different picture, I’ll be happy to look at them. But the NAEP results flatly contradict Duncan’s own claims – routinely repeated in the media – that students made dramatic academic gains under his leadership.

Parties in Power Like National ID Systems

In a recent post, I noted how Department of Homeland Security secretary Janet Napolitano was “taking the national ID tar baby in a loving embrace.” Now the administration seems to be similarly embracing the E-Verify government background check system.

Starting September 8th, it will go forward with a Bush administration plan to require federal contractors to check their employees against federal databases. The E-Verify program is riddled with problems, and it will send many American workers and legal immigrants into Kafkaesque ordeals when they find they aren’t approved by the federal government to earn a living. Ultimately, “internal enforcement” of immigration law, which is what E-Verify is about, requires a biometric national identity system.

Wasn’t a Democratic administration going to be the antidote to the aggressive security-statism of the Bush administration? Well, no. Once in power, either political party will see merit in national ID systems. After all, a national ID gives the government direct regulatory control over individuals - and that’s a sweet sound to the powerful, regardless of political affiliation. This is why it was so interesting to see the left begin to embrace a national ID as it anticipated an Obama victory in November.

Parties in power like national ID systems.

STEM Sky Not Falling?

Education policy is far too rarely driven by facts or logic – they’re just too inconvenient, mucking up both uber-hyped “crises” and warm-and-fuzzy myths.

Recently, the big scare has been that the United States is on its way to a desperate shortage of scientists and engineers, a message that has, of course, been heartily embraced by politicians determined to push more kids into science, technology, engineering, and mathematics (STEM) fields.

Well, it seems that once again the crisis du jour has been well overstated. USA Today has a great new story demonstrating that we actually have more than enough scientists and engineers. (Not that this hasn’t been pointed out before.) Most telling is the content in the article’s  sidebar, which includes some real crisis-deflating stuff:

Detailed findings issued last year by the federally funded RAND National Defense Research Institute found “no evidence of a current shortage” of science and engineering workers. It said National Science Foundation predictions of shortages so far have proved “inaccurate.”

RAND… recommended a permanent commitment to monitoring the USA’s science and technology performance, but said the slow growth of U.S.-born technical workers “will change when the earnings and attractiveness of S&E (science and engineering) careers improve.”

So we actually have plenty of scientists and engineers, and the market appears to be working just as it should?  I hope someone tells our leaders! Otherwise, they’ll almost certainly push even more kids into jobs that, it turns out, will probably only exist in the land of imaginary crises.