Tag: public choice

Stopping the ‘Culture of Spending’

Sen. Mitch McConnell’s quick reversal on the subject of earmarks was a surprise, but that quick, largely symbolic win against profligate spending certainly won’t translate into a more permanent movement without sustained effort. Shortly after McConnell made his speech supporting a “moratorium” on earmarks, I spoke with Matt Kibbe of Freedomworks about turning the enthusiasm for smaller government into that enduring force. He said understanding public choice gives lawmakers a better shot at turning popular anger at government into reductions in its size and scope. Freedomworks recently held orientation sessions for freshmen members of Congress. A primer in public choice was on the agenda.

Cato’s Government Failure: A Primer in Public Choice is a good place to start to understand the mechanics of government dealmaking.

Bending the Cost Curve: Ryan’s Roadmap Would Succeed Where ObamaCare Fails

From my oped in today’s Investors Business Daily:

Rep. Paul Ryan’s (R-Wis.) “Roadmap for America’s Future” proposes even tighter limits on Medicare’s growth, leading columnist Bruce Bartlett to opine, “the Medicare actuaries have shown the absurdity of the Ryan plan by denying that Medicare cuts already enacted into law are even worthy of projecting into the future.”

On the contrary, experience and public choice theory suggest that the Ryan plan has a better shot at reducing future Medicare outlays than past efforts, because the Roadmap would change the lobbying game that fuels Medicare’s growth.

For more on Ryan’s Roadmap, click here.  For more on Medicare, read David Hyman’s Medicare Meets Mephistopheles.  For more on public choice economics, click here.

Would the Schools Work Better If They Outlawed All Competitors?

In the Washington Post, columnist Courtland Milloy praises the “profound egalitarian insights” and “radical oneness” of D.C. Schools Chancellor Michelle Rhee (and billionaire Warren Buffett):

“I believe we can solve the problems of urban education in our lifetimes and actualize education’s power to reverse generational poverty,” Rhee wrote. “But I am learning that it is a radical concept to even suggest this. Warren Buffett [the billionaire investor] framed the problem for me once in a way that clarified how basic our most stubborn obstacles are. He said it would be easy to solve today’s problems in urban education. ‘Make private schools illegal,’ he said, ‘and assign every child to a public school by random lottery.’ “

Milloy’s not satisfied that Rhee is taking on entrenched interests, firing principals and teachers who aren’t doing a good job, and apparently actually improving the schools in the District of Columbia. No, he’s attracted to the “radical concept” of outlawing private schools and forcing everyone in the District into the same schools, with no hope of escape. There would be one method of escape, of course: moving to the suburbs.  And you can bet that lots more people would do that if Milloy and Rhee got their way.

I wonder what a total government monopoly on education would look like. Are Buffett and Rhee right that a government monopoly forced on every citizen would work well? Would work so well that it would “solve the problems of urban education … and reverse generational poverty”?

Well, one answer might be glimpsed on the same page B3 where part of Milloy’s column appeared. In an adjacent column, columnist John Kelly discussed his “Kafkaesque” five-hour visit to the state of Maryland’s Motor Vehicle Administration:

I was at the MVA. I was in Hell.

I know that complaining about the MVA or the DMV is the last refuge of a scoundrel columnist, but I don’t care. You don’t know what it was like. You weren’t there, man. I spent five hours at the Beltsville MVA on Thursday. Five hours. I could have driven to New York in that time….

I thought: Can this really be happening? Can I really have stepped into a Kafka story? Shouldn’t every counter be filled with employees working as fast as possible? Shouldn’t management be out there helping, and Maryland state troopers, too? This is the Katrina of waiting, people.

The MVA, of course, is a monopoly government bureaucracy. Everyone must go there – CEOs, diplomats, even Washington Post columnists. And yet, somehow, that has not led to the MVA equivalent of solving problems and reversing poverty. Five hours to get a drivers’ license just might be worse performance than that of the public schools.

It’s the system, Mr. Milloy and Ms. Rhee. Monopolies don’t have much incentive to improve. Give everyone the chance to go to a different supplier, and then you’ll see improvement. Giant Food wouldn’t last long if it took five hours to buy your groceries – because it has competitors. But as long as the schools are a near-monopoly, and the MVA or DMV is a total monopoly, don’t expect real improvement.

Baptists and Pot-Growers

The L.A. Times reports that the city of Oakland has approved an ordinance paving the way for the industrial production of marijuana. There is more to this than simply a victory for liberty in the drug war.  As the story describes and Josh Blackman analyzes, the episode demonstrates “Baptists and Bootleggers”-style public choice economics in action: existing small-time growers are displeased at the competition, barriers to entry are high, the approved pot factories engaged in serious rent-seeking, and the city profits from a new stream of tax revenue.

And so, as liberty expands, government reserves the power to decide who gets to benefit most – after taking a slice for itself off the top.

Robert Gates, Meet Robert Gates

“If the Department of Defense can’t figure out a way to defend the United States on a budget of more than half a trillion dollars a year, then our problems are much bigger than anything that can be cured by buying a few more ships and planes.”
- Defense Secretary Robert Gates, Speech to Economic Club of Chicago, July 16, 2009

“The situation out there in the world doesn’t change and the world is getting more dangerous rather than less so.  The Defense Department certainly spends a lot of money but if you look at where the Defense Department is today it certainly is within historical norms.”

- Defense Secretary Robert Gates, responding to suggestions that his new $741 billion budget should be cut, February 2, 2010

Health Care Bill Improves Lawyers’ Financial Health

The great thing for legislators about a nearly 2000 page bill – such as, oh, the House’s latest health care salvo – is that very few people bother to read the whole thing.  So it’s easy to bury little gifts to favored supporters.  Or big ones. 

For example, check out section 2531  – that’s pages 1431-33 for those following along at home – which has gone largely unnoticed in the major news cycle.  These three pages of the bill reward states that refrain from setting (or repeal) any caps on medical malpractice rewards – and the accompanying lawyers’ fees! – by requiring the Secretary of Health and Human Services to provide them a bribe an “incentive payment.”

As Hans von Spakovsky notes at NRO’s Corner, this “alternative medical liability law” aims to eviscerate cost-saving measures that protect doctors from frivolous lawsuits that increase the cost of health care to the consumer.  So this has nothing to do with providing better or cheaper care, covering the uninsured, or even eliminating waste and fraud.  Instead, it’s a pure sop to one of the Congressional Democrats’ key constituencies: trial lawyers.

For more information on free market health care reform alternatives, please visit Cato’s Health Care website here.

How Government Really Works

In a profile of Virginia Democratic gubernatorial hopeful Creigh Deeds, the Washington Post tells us about the grandfather from whom he got his unusual first name – and his interest in political power:

Creigh Tyree mattered. While serving as chairman of the Bath County Democrats, during the Depression, Tyree’s house was the first private home in the county to receive electricity from the federal Rural Electrification Act, proof of the power of government, he told his grandson.

Or at least proof of the practice of government. And that is in fact the lesson that young Creigh learned:

Watching the elderly man work the circuit of county shops and farms, the boy saw the power of political maneuvering, the influence it brought a man, the way it enabled the well-connected to pick up a phone and get something previously ungettable. Young Deeds started telling elementary school teachers that he wanted to be, would be, governor someday, and then president.

Using political connections to get things other people can’t get – that’s the lesson young Creigh Deeds learned from his granddad’s experience with the New Deal.

In a story earlier this week, the Post made it clear that that’s still the way politics works:

Sen. Thad Cochran’s most recent reelection campaign collected more than $10,000 from University of Southern Mississippi professors and staff members, including three who work at the school’s center for research on polymers. To a defense spending bill slated to be on the Senate floor Tuesday, the Mississippi Republican has added $10.8 million in military grants earmarked for the school’s polymer research.

Cochran, the ranking Republican on the Appropriations subcommittee on defense, also added $12 million in earmarked spending for Raytheon Corp., whose officials have contributed $10,000 to his campaign since 2007. He earmarked nearly $6 million in military funding for Circadence Corp., whose officers – including a former Cochran campaign aide – contributed $10,000 in the same period.

In total, the spending bill for 2010 includes $132 million for Cochran’s campaign donors, helping to make him the sponsor of more earmarked military spending than any other senator this year, according to an analysis by the nonprofit group Taxpayers for Common Sense.

Cochran says his proposals are based only on “national security interests,” not campaign cash. But in providing money for projects that the Defense Department says it did not request and does not want, he has joined a host of other senators on both sides of the aisle. The proposed $636 billion Senate bill includes $2.65 billion in earmarks….

The bill, however, would add $1.7 billion for an extra destroyer the Defense Department did not request and $2.5 billion for 10 C-17 cargo planes it did not want, at the behest of lawmakers representing the states where those items would be built. Although the White House said the administration “strongly objects” to the extra C-17s and to the Senate’s proposed shift of more than $3 billion from operations and maintenance accounts to projects the Pentagon did not request, no veto was threatened over those provisions….

Sen. Daniel K. Inouye (D-Hawaii), chairman of the Senate Appropriations Committee, ran a close second to Cochran’s $212 million in earmarks this year, having added 37 earmarks of his own worth $208 million, according to the tally by Taxpayers for Common Sense.

Almost all of Inouye’s earmarks are for programs in his home state, and 18 of the provisions – totaling $68 million – are for entities that have donated $340,000 to his campaign since 2007. His earmarks included $24 million for a Hawaiian health-care network, $20 million for Boeing’s operation of the Maui Space Surveillance System and $20 million for a civic education center named after the late senator Edward M. Kennedy….

In Cochran’s case, the proposed earmarks would benefit at least two entities that hired his former aides.

Folks, this is the way government works. If you think the programs of the New Deal or the stimulus bill or federal highway programs are necessary, fine – and certainly a defense bill is necessary – but understand that all such government programs involve taking money by force from people who didn’t offer it up voluntarily and then distributing it to others, in many cases to people with more political clout. People in the reality-based community should recognize this reality.

For more on this, see chapter 9 of Libertarianism: A Primer, “What Big Government Is All About.”