Tag: public good

We Don’t Need No Art in Kansas

At POLITICO this morning we find a long opinion piece by Matt Stoller, “Public Pays Price for Privatization,” summarized as “The real infrastructure trend in America today is privatizing what is left.” If that weren’t enough to give you the flavor of the piece, the bio line tells us that “Stoller worked on the Dodd-Frank financial reform law and Federal Reserve transparency issues as a staffer for Rep. Alan Grayson (D-Fla.). He is currently a fellow at the Roosevelt Institute.” Say no more – except, there’s more to say.

Stoller notes, among much else, that Kansas Gov. Sam Brownback just turned over arts funding to the private sector, making Kansas the only state without a publicly funded arts agency.” Don’t reel in horror; the cited Los Angeles Times article has already done it for you: “The governor erased state funding for arts programs, leaving the Kansas Arts Commission with no budget, no staff and no offices.” One imagines there will now be no art at all in Kansas.

Not surprisingly, Stoller extols the giant public works of the New Deal and after, which petered out in the 1970s, he says, after which “international competitiveness and environmental costs drove the logic of cost reductions into our political order. Today, we are still living in the Ronald Reagan-Paul Volcker era of low taxes, low regulations, low pay, low spending and high finance.” It seems not to have occurred to Stoller that perhaps the prior absence of “the logic of cost reductions” in our political order might have contributed to why, as he says, “the New Deal coalition melted in the 1970s.”

Art aside – that’s an easy case for defunding – Stoller does go on to criticize much of the “privatization” that’s taken place since – starting with Fannie Mae and Freddie Mac. He’s right there: These “private-public partnerships” are fraught with peril, not least by giving privatization a bad name, something he doesn’t consider. The idea of “public goods” is not meaningless, but the definition has to be strict, as economists know, and the means for privatizing ersatz “public goods” have to be clean. Given the vast public sector before us, we’ve got years of privatization ahead. Let’s hope it’s done right.

Hot Heads and Government Failure

The left-wing blogosphere and left-leaning newspapers have spent the past few days joyously incensed over the story of a Tennessee city fire department that allowed a home to burn because the homeowner hadn’t paid his annual fire fee.

AlterNet’s Jonathan Holland titled-and-teased his post on the fire:

Ayn Rand Conservatism at Work – Firefighters Let Family’s House Burn Down Because Owner Didn’t Pay $75 Fee

Talk of limited government is appealing until you see what it actually means in practice: a society in which it’s every man for himself.

ThinkProgress’s Zaid Jilani thundered that the fire demonstrates that there are two competing visions of American society:

One, the conservative vision, believes in the on-your-own society, and informs a policy agenda that primarily serves the well off and privileged sectors of the country. The other vision, the progressive one, believes in an American Dream that works for all people, regardless of their racial, religious, or economic background. The conservative vision was on full display last week in Obion County, Tennessee.

(An aside: ThinkProgress loves to throw in partisan barbs, so Jilani claims that “every seat” of the Obion County Commission is “filled by a Republican,” a claim that Holland echoes. Nope. But then, ThinkProgress recently harangued Michael Cannon for an opinion that isn’t his, so ya’ know…)

Finally, today the New York Times editorial page chimes in:

In any case, the founding fathers left no message that government can make an object lesson of a neglectful citizen by letting his house burn down. The [homeowners] deserve an apology, even if it won’t come from the candidates peddling dreams of constricted government.

It’s unfortunate that these writers didn’t pause from their fervor to consider the facts. In a nutshell: The firefighters involved were from a city government fire department following a city government policy concerning people who didn’t pay a city government fee for a 20-year-old city government program that was adopted in response to a county government decision.

John Galt in Nomex this ain’t.

Beyond the facts, these writers are confused about basic political theory.

All three writers argue that fire service is a public good that shouldn’t be left to private action. “Public good” is a technical term referring to a type of market failure in which (to over-simplify) it would be easy for some people to benefit from a good without paying their fair share for it. As a result, public goods are at risk of being under-provided because of all the free-riding. The classic (though flawed) example of a public good is a lighthouse: a ship can benefit from the safety of its beacon without contributing to the lighthouse’s construction and upkeep.

But it’s unclear how the Obion County fire would be an example of a public goods failure – obviously a homeowner who fails to contribute to fire service can be excluded from receiving the service. A better example in support of the public goods argument might be that fire service is publicly provided so as to protect the neighbors of a house that’s on fire – though again, if you read the details of the Obion County fire, you find that it provides an example that such neighbors can be protected.

Indeed, the Obion County fire seems a clear example of government failure, not market failure. Because city government provides the service (albeit through a voluntary fee system for people like the affected owner who live outside the city lines), people likely consider it a subsidized public service. As a result, there is strong disincentive for any private firm to enter the market and offer competing service. It’s not difficult to imagine what a private fire service would do in an event like the Obion fire: it likely would extinguish the blaze and then send the homeowner a bill. There are plenty of examples of this sort of practice in private marketplaces. And it’s what the government fire company in Obion should have done. Instead, the firefighters stood by and watched the house burn.

One can’t blame the NYT editorial page, ThinkProgress, and AlterNet for trying to spin an example of government failure into a tale of the horrors of limited government. Just a few weeks out from a national election in which progressive candidates appear poised for a major waxing, the last thing the progressive side needs is a heartrending example of government failure. And yet, the Obion County fire is an example of why that waxing is sorely needed — and justified.