Tag: Alaska

Federal Transportation Follies

The 2009 stimulus bill gave the U.S. Department of Transportation $50 billion to distribute to the states for highways, roads, and bridges. A House bill passed in December would add another $28 billion. According to Washington folklore, spending on infrastructure is always good because it’ll create jobs and spur economic growth. However, three recent examples are a reminder that the government often does a poor job of allocating resources.

First, an Alaska legislative audit concluded that the state should not have spent federal transportation money building a road to the site of the proposed “Bridge to Nowhere,” which was canceled after a national outcry. Alaska kept the federal money originally earmarked for the bridge, and then-Governor Sarah Palin agreed to spend $26 million of it on the road despite the fact there was no bridge.

Second, the Department of Transportation is supposed to exclude “unethical, dishonest, or otherwise irresponsible” parties from receiving federal funds. But according to a report from DOT’s inspector general, the average case took DOT officials “300 days to reach a suspension decision and over 400 days to reach a debarment decision.” For example, Kentucky awarded $24 million in transportation stimulus money to companies with officials under review by the Federal Highway Administration for bribery, theft, and obstruction of justice. The FHA took 10 months to review the companies before ultimately suspending them, but Kentucky had already given the companies the money.

Third, a Tennessee television station analyzed the state’s use of federal transportation stimulus money and found that it “spent an average of $161,500 per job created and that some paving jobs, which were temporary, cost taxpayers more than $1 million each.” The station interviewed a construction company that had been busy during the summer when it had federal money. Now its trucks are idle and the workers it hired have all been laid off.

Randal O’Toole says that “The best test of infrastructure value is whether users are willing to pay for it.” There’s almost no connection between infrastructure projects funded by federal taxpayers and the typically local users. Leaving infrastructure projects to state and local governments to fund would make more of a connection. Privatization, which would utilize tolling and other user fees, would be even better.

Week in Review: Stimulus, Sarah Palin and a Political Conflict in Honduras

Obama Considering Another Round of Stimulus

With unemployment continuing to climb and the economy struggling along, some lawmakers and pundits are raising the possibility of a second stimulus package at some point in the future. The Cato Institute was strongly opposed to the $787 billion package passed earlier this year, and would oppose additional stimulus packages on the same grounds.

“Once government expands beyond the level of providing core public goods such as the rule of law, there tends to be an inverse relationship between the size of government and economic growth,” argues Cato scholar Daniel J. Mitchell. “Doing more of a bad thing is not a recipe for growth.”

Mitchell narrated a video in January that punctures the myth that bigger government “stimulates” the economy. In short, the stimulus, and all big-spending programs are good for government, but will have negative effects on the economy.

Writing in Forbes, Cato scholar Alan Reynolds weighs in on the failures of stimulus packages at home and abroad:

In reality, the so-called stimulus package was actually just a deferred tax increase of $787 billion plus interest.

Whether we are talking about India, Japan or the U.S., all such unaffordable spending packages have repeatedly been shown to be effective only in severely depressing the value of stocks and bonds (private wealth). To call that result a “stimulus” is semantic double talk, and would be merely silly were it not so dangerous.

In case you’re keeping score, Cato scholars have opposed government spending to boost the economy without regard to the party in power.

For more of Cato’s research on government spending, visit Cato.org/FiscalReality.

Sarah Palin Resigns as Governor of Alaska

Alaska Governor Sarah Palin resigned from office last week with 18 months left in her term, setting off weeklong speculation by pundits.

Cato Vice President Gene Healy comments:

Palin’s future remains uncertain, but it’s hard to see how her cryptic and poorly drafted resignation speech positions her for a presidential run. Nonetheless, her departure presents a good opportunity to reflect on the Right’s affinity for presidential contenders who - how to put this? - don’t exactly overwhelm you with their intellectual depth.

It’s one thing to reject liberal elitism. It’s another thing to become so consumed with annoying liberals that you cleave to anyone they mock, and make presidential virtues out of shallow policy knowledge and lack of intellectual curiosity.

Writing at Politico, Cato scholars David Boaz and Roger Pilon weigh in on what her resignation means for the former Vice-Presidential candidate’s political future:


Will we one day say that her presidency was ‘born on the Fourth of July’? I doubt it. This appears to be just the latest evidence that Sarah Palin is not ready for prime time. The day McCain chose her, I compared her unfavorably to Mark Sanford. Despite everything, I’d still stand by that analysis. At the time I noted that devout conservative Ramesh Ponnuru said ‘Palin has been governor for about two minutes.’ Now it’s three minutes.

Running for president after a single term as governor is a gamble. Running after quitting in the middle of your first term is something else again. If this is indeed a political move to clear the decks for a national campaign, then she needs adult supervision soon. But I can’t really believe that’s what’s going on here. I suspect we’re going to hear soon about a yet-unknown scandal that was about to make continuing in office untenable.


It seems that since her return to the state following the campaign, activist opponents and bloggers have bombarded the governor’s office with endless document requests. And she’s faced 16 ethics inquiries, with no end in sight. All but one have since been resolved, but the politics of personal destruction has cost the state millions, as Palin noted. Add to that the unrelenting, often vicious and gratuitous attacks on her and even on her family, and it’s no wonder that she would say ‘Enough.’ It has nothing to do with ‘quitting’ or with being ‘unable to take the heat.’ It has everything to do with stepping back and saying you’re not willing to put your family and your state through any more. She seems confident that history will judge her more thoughtless critics for what they are. I hope she’s right.

Honduras’ President Is Removed from Office

In reaction to Honduran President Manuel Zelaya’s attempt to stay in power despite term limits set by the nation’s Constitution, armed forces removed him, sending the Latin American nation into political turmoil.

Juan Carlos Hidalgo, an expert on Latin American affairs, comments:

The removal from office of Zelaya on Sunday by the armed forces is the result of his continuous attempts to promote a referendum that would allow for his reelection, a move that had been declared illegal by the Supreme Court and the Electoral Tribunal and condemned by the Honduran Congress and the attorney general. Unfortunately, the Honduran constitution does not provide an effective civilian mechanism for removing a president from office after repeated violations of the law, such as impeachment in the U.S. Constitution. Nonetheless, the armed forces acted under the order of the country’s Supreme Court, and the presidency has been promptly bestowed on the civilian figure — the president of Congress — specified by the constitution.

To be sure, Hidalgo writes, the military action in Honduras was not a coup:

What happened in Honduras on June 28 was not a military coup. It was the constitutional removal of a president who abused his powers and tried to subvert the country’s democratic institutions in order to stay in office.

The extent to which this episode has been misreported is truly remarkable.

Get Back to Me When They’ve Got Something to Launch

Over the past few days, it seems like every major state newspaper ran a story on the state’s governor signing onto the Common Core State Standards Initiative, an effort to establish national standards in mathematics and reading curricula. The only holdouts are Alaska, Texas, Missouri, and South Carolina.

I should probably be more worried, because national standards are a terrible idea.

First, there is nothing inherently better about having a single standard agreed to by numerous states than having individual states set standards for themselves. Either way, politicians – people inherently most responsive to mobilized, highly motivated public school employees who want as little meaningful accountability as possible – will be setting the standards, and the standards will therefore either start low or end up there pretty fast.

Second, the notion that national standards adopted by even just a few states will remain both voluntary for all states and non-federal is pure fantasy, like unicorns, or selfless bureaucrats. Once some version of national standards exist, Washington will tie money to adopting them, which is how the feds force states to “volunteer” for all kinds of odious stuff.

“Oh, sure, feel free to turn down the money, Mr. Arizona” Uncle Sam says. “But your citizens? Well, I don’t think we’ll be taking any volunteers on paying federal taxes…”

The Obama Administration has already got this in the works, suggesting that adopting some sort of national standard could make a state eligible for a piece of the Secretary of Education’s so-called “Race to the Top Fund,” a $5 billion “stimulus” pot of gold controlled by the secretary.

Of course, the ultimate threat is that once standards go federal they never go back, and we’ll be stuck with one-size-fits-all standards for every state, district, and child in America, standards controlled by the National Education Association, Council of Chief State School Officers, and every other card-carrying member of the self-serving education establishment. And even though we’ll finally live in a utopia in which “the child in Mississippi is held to the same standards as the child in New York,” we won’t suddenly see test scores skyrocket or heretofore untapped genius spring forth across the land. We’ll just see an even worse version of the hopelessly moribund, socialist education system we have today.

So why, in light of all these dreadful threats, am I not too worried? Because what governors have agreed to so far is just to draft national standards, not to adopt them, and as I wrote last month, while the national standards crowd seems unanimously exuberant about having a single set of standards for every kid in America, they can’t even come close to agreeing on what those standards should be. And if they can’t agree on what the national standards should be, what are the odds that millions of other people will simply assent to having someone else’s standards foisted upon them?

Not very high. Indeed, when establishing national standards was attempted in the 1990s the real fireworks didn’t begin until proposed standards were published. Then, it seemed that everyone had a different reason they were outraged – outraged! – by the standards.  At best, there was only one point of broad consensus: that the wannabe national standards simply had to go.

So are national standards a serious threat? They sure are: Were they to be enacted, the educationally deadly government-schooling monopoly would be complete, with even the ability to escape to better districts or states cut off. But the news of states agreeing to develop shared standards doesn’t raise the threat level to DEFCON 1. It’s only if they complete the task – if they can somehow agree on how many fins to put on their missile, what range to shoot for, what color to paint it, where to target it, whose names to put on it, what fuel to use, and so on – that we should really become concerned. And making those decisions is, of course, the really tough part.

A Whale of a Disgraceful ED Budget

Tad DeHaven does a fine job of exposing the mere window dressing that are the cuts in President Obama’s FY 2010 budget proposal. I’ll not add much to that other than to say that while Tad gives Obama’s predecessor a deserved hard time for his own paltry efforts to rein in spending, President Bush’s Education Department  budgets looked downright Draconian compared to what the Obama team just produced.

Bush’s FY 2009 ED budget proposal included nearly $3.3 billion in cuts, generated by eliminating 47 programs. Given the dismal performance of all federal education efforts, this was obviously far too little, but compare it to Obama: His proposed budget would cut just twelve measly programs from ED’s budget, for a puny savings of about $551 million. And if that doesn’t give you a powerful feel for just how unserious this administration seems to be about saving taxpayers even a thin dime or two, look what program is not among those proposed to be cut:


The purpose of this program is to develop culturally based educational activities, internships, apprentice programs, and exchanges to assist Alaska Natives, native Hawaiians, and children and families living in Massachusetts linked by history and tradition to Alaska and Hawaii, and members of any federally recognized Indian tribe in Mississippi.

For this whale of a waste – and so many others in the ED budget – to have survived portends nothing but ill for the nation. Nothing but ill.

Corruption Rewarded in Government

In Downsizing the Federal Government, I discussed some of the corruption surrounding former Senator Ted Stevens:

Another example of abuse engineered by Senator Stevens involves Alaska Native Corporations. Because of rule changes slipped in by Stevens, these shadowy businesses based in his state are allowed to circumvent normal federal procurement rules and win no-bid contracts. The result of such loopholes is that taxpayers do not get value for their money. For example, in 2002 a half billion dollar contract for scanning machines at U.S. border crossings was given to a native corporation with little experience in the technology, instead of established leaders in the field who were not allowed to bid.

The Washington Post did a good job of bringing the scandal of ANCs to light a few years ago. Did the spotlight on ANCs and connections to disgraced Senator Stevens convince Congress to move ahead with reforms? Hardly. From Government Executive today:

In fiscal 2008, companies owned by Alaskan regional and tribal corporations earned a record $5 billion in federal contracts, nearly 10 times the $506 million they earned in fiscal 2000 … ANCs earned two-thirds of the $24 billion they accumulated in prime contracts since fiscal 2000 through the Small Business Administration’s 8(a) Business Development program … Federal acquisition specialists said the data shows that the program, which was designed to help small and disadvantaged companies, has been undermined by a system that rewards companies that earn hundreds of millions in annual revenue.

In the story, Steven Schooner, of George Washington University, summed up the scam well: “The ANC program, as currently implemented, is a blunt instrument that distorts the procurement system, injects well-founded cynicism into the process, and reinforces the belief that government procurement is more about allocating political spoils than ensuring that the government receives value for taxpayer money.”

President Obama has promised procurement reform. He could start be eliminating ANCs and other forms of procurement favoritism.