Tag: bureaucracy

Earmarkers vs. Bureaucrats: Taxpayers Lose Either Way

One of the justifications members of Congress offer for earmarking is that the Constitution gives the legislative branch the “power of the purse.” Congressional earmarkers often denigrate the executive branch’s inability to effectively allocate funds. But just because the federal bureaucracy does an abysmal job of spending taxpayer money, it doesn’t mean lawmakers would do any better.

The following example out of Florida illustrates why lawmakers are just as likely as bureaucrats to misspend taxpayer money. According to the St. Petersburg Times, a developer who has never had a successful project was able to convince four members of Florida’s congressional delegation into supporting a $500,000 earmark for a Tampa affordable housing project. The developer had already wasted $563,000 in federal and state taxpayer funds on housing projects that now “sit vacant and rotting.”

According to the article, suckering more money out of Congress was apparently pretty easy:

But the federal earmark process involves little vetting of recipients. So the four members of Congress didn’t know that Foster had never successfully completed a housing project. They didn’t know he exaggerated the involvement of his partners in the proposal he presented to them. They didn’t know he has a record of mishandling grants for much less ambitious projects. And they didn’t know his nonprofit has faced legal troubles, including IRS liens for unpaid payroll taxes.

The lawmakers, who represent Florida and the Tampa Bay area, say they made their decision based largely on information provided by Foster. Others say he never should have gotten a cent.

“I am flabbergasted that this guy’s getting another $500,000. That’s just insane,” said Craig Rothburd, an attorney working pro bono for the Hillsborough County Homeless Coalition. The coalition directed a $400,000 state grant to Foster to develop housing for homeless people. It is now suing Foster for fraud and breach of contract.

Might these lawmakers have put a wee bit more effort into scrutinizing the developer had the money been their own?

Regardless of whether federal funds are allocated by the bureaucracy or earmarked by politicians, both are spending other people’s money. Neither has the incentive to conduct the due diligence necessary to ensure that the money is properly spent. This is one reason why the federal government’s “affordable housing” efforts have been a failure.

Therefore, the question of whether the executive or legislative branch should have more control over spending is a secondary concern. The primary focus should be on efforts to restrict the government’s activities to the small number defined in the Constitution.

Washington Prospers While America Suffers

Unemployment in the heartland may be high and incomes may be stagnating in most of the nation, but Washington, DC, continues to be an oasis of prosperity as more of the nation’s resources get consumed by government. The latest evidence comes from the Washington Post, which reports on the federal government’s insatiable demand for more real estate.

Evidence of the federal government’s growing influence on Washington area commercial real estate is illustrated in big deals it is working on both sides of the table: auctioning a 127,000-square-foot Bethesda building previously occupied by the National Institutes of Health and moving to snatch up vast spaces in buildings on the private market that have been vacant for months. The General Services Administration is seeking to unload the 10-story building that the NIH vacated in 2002 when it consolidated offices into other buildings in Bethesda. The recommended opening bid for the online auction, which runs from April 30 to July 2, is $14 million. At the same time, federal leasing activity is expanding, according to Jones Lang LaSalle, the real estate firm representing the government. The government signed deals for 750,000 square feet of space in the District in the first quarter of 2010, compared with 670,000 square feet in the city for all of 2009.

It’s hard to pick out the most depressing part of the article. Signing leases for more space in the first quarter of 2010 than in all of 2009 might be at the top of the list. That is presumably a good (and discouraging) measure of the growth of government. But for those who enjoy reading about incompetence and inefficiency, the government’s eight-year (and counting) project to sell one office building may be at the top of the pile.

The GSA decided to sell the 46-year-old former NIH building at 7550 Wisconsin Ave. in Bethesda eight years ago. “We have a process we have to go through before we sell a building. We have to offer it to homeless housing, to local government,” said Bob Peck, commissioner for the GSA’s Public Buildings Service.

More discouraging factoids include a six-figure increase in the number of bureaucrats (just in the DC area), and the fact that the government is going to squander huge amounts of money on green renovations, which will require taxpayers to cough up lots of money for the contractors doing the work and for five-year leases (which probably means ten, knowing the sloth-like pace of government work) so the bureaucrats can be housed elsewhere during the work.

Expansion of the government’s role in the nation’s financial markets, increased defense spending and the new health-care law are driving its demand for more space. The government is expected to increase its Washington area payroll by as many as 100,000, according to Partnership for Public Service, a nonprofit group that helps the federal government find workers. “The government spent 2009 planning for the growth. We’re going to see the growth materialize in 2010,” said Scott Homa, research manager for Jones Lang LaSalle. The government also is overhauling many of its buildings, making them energy efficient. As a result, several agencies will need to lease space in the commercial market for five years or so during renovations.

Ireland Imposes Real Cuts on Bureaucrat Pay

Ireland may be in a recession (caused in large part by misguided housing subsidies), but there are two things worth admiring about the Emerald Isle’s public policy. Many wonks already know about the first policy, the 12.5 percent corporate tax rate that helped transform Ireland from the “sick man of Europe.” But it seems that Irish policymakers are reading Chris Edwards, because the second admirable policy is that lawmakers actually cut civil service compensation by 13.5 percent. And these are real cuts, not the type of phony gimmick you find in Washington, where something is called a “cut” simply because it didn’t increase as fast as previously planned.

A columnist writing in the UK-based Times wonders why Irish bureaucrats did not go nuts with public protests and speculates that maybe they actually understand that they have a sweetheart deal compared to their brethren in the productive sector of the economy:

Because of the budget deficit, shrinking economy and untenable level of national debt, all public service salaries will be cut by an average of 13.5 per cent, with immediate effect…and will apply to frontline public workers in health, education, transport and local services and also to MPs, Ministers of State and the Attorney-General. …Couldn’t happen, could it? Actually it has, and close to home. …public sector pay in the Republic has been cut. Not frozen, sharply cut. …although the payslips have been changed for many months now, the schools are open, the hospitals treat the sick, rubbish is collected and paper pushed around briskly enough in public organisations. Belts are tight all right and pips are squeaking; but the country whose public pay once led the EU league has not imploded into the chaos of suicidal strikes, unburied bodies, closed schools and garbage mountains, which the UK or France would expect as a matter of course if a government did any such thing. …Yet the pay cuts — I say again, 10 to 15 per cent cuts in pay, real and immediate holes in the family budget — have not caused the enraged citizenry to pull down the pillars of the temple around their own heads and everybody else’s. They just haven’t. Why? …unlike the self-righteous whiners who speak for British public service unions, middle-Ireland still knows that a secure and pensionable job is a privilege: that working in the public sector is not an altruistic gift to the nation, but a damn lucky break.

Since I have a multi-part series on “Bureaucrats vs. Taxpayers” at my International Liberty blog, I especially enjoyed this part of the column, which provides a real-world glimpse at the corrupting allure of cushy government employment:

I saw a spirited, self-mocking sketch performed by 12-year-olds in a village hall entertainment the other night about “Marty Matchmaker O’Donoghue, where every ould stocking will find an ould shoe”. The girl being advertised to the men is talked up by the matchmaker as having “a Government Job! A clerk at the council office — I tell ye, she’s a laying hen!” Friends confirm that it’s an old saying: “Marry a teacher or a nurse, you’ve got a laying hen.” It does not seem that way in boom times, but even in the UK it is becoming true.

Making Government Bigger Is Not Stimulus - and It Won’t Create Jobs

This new video from the Center for Freedom and Prosperity explains how last year’s so-called stimulus was a flop - and also reveals why politicians are pushing for another big-government spending bill.

Interestingly, since last year’s stimulus was such a disaster, the redistributionists in Washington are calling their new proposal a “jobs bill.” But as I say in the video, this is akin to putting perfume on a hog.

For further background, here is a video explaining why Keynesian economics is wrong and another predicting (in advance!) that last year’s stimulus would be a mistake. And just in case anyone actually wants the economy to grow faster, here’s one about policies that actually increase prosperity.

Weekend Links

  • The G.O.P.’s next move on health care: “The challenge for Republicans is not to try to ‘do’ things just like the Democrats but a little less expensively or with a little less bureaucracy, but to present an agenda of personal and economic liberty as a positive alternative… [Republicans] will have to show that this time they are in favor of something positive. It’s called freedom.”

Thursday Links

  • Doug Bandow:  “Congress has spent the country blind, inflated a disastrous housing bubble, subsidized every special interest with a letterhead and lobbyist, and created a wasteful, incompetent bureaucracy that fills Washington. But now, legislators want to take a break from all their good work and save college football.”

Great Moments in Bureaucracy

The picture below, taken from a story in The Economist, shows that France, Germany, and Italy are among the nations with the most central bank employees (as a share of the population). In some sense, this is a dog-bites-man factoid. After all, is anyone surprised that Europe’s major welfare states have bloated public payrolls? But there’s more to this story. All three of these central banks ceased to have a monetary policy, starting back in 2002, when their nations adopted the euro. The mission is gone, but the bureaucracy lives on.

Central bank bureaucrats

To be fair, the bureaucrats in these nations presumably are not sitting in quiet rooms playing minesweeper. Perhaps these central banks are responsible for other functions, such as financial regulation. Of course, given how governments around the world pursued policies that led to a financial crisis, perhaps all of us would be better off if bureaucrats did play computer games all day.