Topic: Government and Politics

Bipartisan Agreement against the Taxpayers

The Washington Post reports on strong disagreements in consecutive appearances by Virginia Senate candidates Mark Warner and Ed Gillespie. Obamacare, terrorism, lobbying, partisanship – lots of arguments. But take heart, the Post advises us: “Despite the positioning, both candidates agreed on a few topics.” As usual, as I’ve written before, when you hear about bipartisanship, watch your wallet. Here’s what Warner and Gillespie agree on:

For example, they each called federal sequestration cuts devastating to the Northern Virginia economy.

Gillespie said Warner was in support of sequestration, while Warner blamed Republicans for allowing the automatic spending cuts to go through after Congress failed last year to resolve the debt-ceiling crisis.

“Sequestration is stupidity on steroids,” Warner said, promising to look for places to cut spending in other areas. “You have to take on entitlement reform and tax reform.”

Both also agreed that there is an urgent need to improve Virginia’s transportation infrastructure, though Gillespie said the solution lies in bringing in more revenue through deep-sea oil drilling and Warner argued for privatizing portions of transportation improvements.

On national security, Gillespie and Warner agreed on a need to spend more on the U.S. military in the face of the threat posed by the Islamic State.
Once again, what the candidates agree on is spending the taxpayers’ money.

A Tip o’ the Hat to the United Kingdom

As an eighth-generation Scottish-American, I’m disappointed that my ancestral homeland has chosen not to be A Nation Once Again. But at the Daily Caller I do note one remarkable and positive aspect of the referendum:

The leaders of the United Kingdom allowed this referendum to take place, allowed the Scots to peacefully decide their own fate. Just think how remarkable that is. We Americans weren’t allowed to peacefully leave the United Kingdom….

A few secession efforts in the United States also demonstrate the remarkable nature of the Scottish independence referendum. The San Fernando Valley region wanted to secede from the city of Los Angeles in the 1970s, and eventually a vote on secession was held in 2002. But the entire city of Los Angeles got to vote on whether the Valley could leave, and the effort was defeated. Today there are counties in both California and Colorado that have discussed secession, but in both cases the state law says that the legislature would have to approve. Few central governments look kindly on the loss of any portion of their taxpayers.

And that’s why I offer a tip o’ the hat today to the Parliament and the governments of the United Kingdom. They allowed the people of Scotland to decide their own fate. They did not insist that any secession had to get the approval of the government from which the dissident region wanted to secede. They did campaign hard to persuade Scottish voters to stick with the UK. But they let the Scots decide. May the road rise up to meet them, and may the sun shine warm upon their faces. And may other central governments learn from their example.

Government Failure: More from Paul Light

NYU’s Paul Light provides thoughts on government failure in the Wall Street Journal today.

Congress returned to its investigation of the General Motors faulty ignition switch Tuesday with a blistering Senate hearing on the National Highway Traffic Safety Administration’s failure to act. As the House Energy and Commerce Committee concluded on the same day, the agency had more than enough information in 2007 to prevent further tragedy, but gave GM a pass.

Lest anyone think that the neglect was an aberration in an otherwise invulnerable government, the cascade of highly visible failures has been accelerating since the mid-1980s. According to my list of management failures that made the national news over the past quarter-century, the federal government produced an average of 1.5 failures per year from 1986 to 1993, two per year from 1993 to 2001, and three per year from 2001 to today.

Light’s views build on his recent study on the subject, which I discussed in this blog. Light says some nice things about the bureaucracy, which I have not quoted here. But he has documented a long list of failures:

With more aggressive oversight and stronger policy, for example, the Occupational Health and Safety Administration could have prevented the fertilizer plant explosion in West, Texas, last year that killed 13 people. With more effective monitoring of at least two of its watchlists, the intelligence community could have warned the Boston police that there was a potential terrorist duo in the city before the Boston Marathon bombing. With a bit of late-night reading of its own internal reports, the Department of Veterans Affairs could have discovered the VA’s wait-list scandal well before it hit the news. And so it goes, from the flu-vaccine shortages, to the Columbia shuttle disaster, the financial meltdown, the Gulf of Mexico oil spill and the healthcare.gov disaster.

I think a key reason why the federal government is failing more than ever is because it is larger than ever. Light suggests other reasons for the government’s poor performance. Either way, this is an important discussion to have, and I am glad Light is out front documenting the failures and asking some fundamental questions.

Countries at Risk, not Fake U.S. Coalition, Should Stop the Islamic State

President Barack Obama is fighting the Islamic State with a coalition without members.  What are allies for?

Washington collects allies like most people collect Facebook friends.  It doesn’t matter if the new “friends” enhance America’s security.  Washington wants more allies.

Yet America’s allies do little for the U.S.  Their view is that Washington’s job is to defend them.  Their job is to be defended by Washington. 

For decades Washington faced down a nuclear-armed power—the Soviet Union and then Russia—to protect the Europeans.  The Europeans did essentially nothing for the U.S. 

After 9/11 several European states contributed to America’s efforts in Afghanistan and Iraq.  Neither invading the latter nor attempting to build a democratic central government in the former made policy sense, but some Europeans sacrificed on behalf of a professed U.S. interest. 

However, Washington quickly repaid the favor, underwriting Britain’s and France’s foolish war in Libya.  Now the Europeans want Washington to save Ukraine and “reassure” countries to the east.  Yet the EU has a larger GDP and population than America. 

With the U.S. now calling for assistance against ISIL, the continent has turned more frigid.  No one seems interested in joining Washington’s air war, even Great Britain.

Washington’s Asian friends are even less helpful.  For decades Japan wouldn’t help U.S. forces, even if they were defending Japan.  That is finally changing, but there still is no good reason Washington to stare down the People’s Republic of China to secure Tokyo’s disputed claim to the Senkaku Islands. 

Sweden’s Electoral Warning for David Cameron

Cato senior fellow Johan Norberg writes in The Spectator that David Cameron ought to ponder the electoral loss of his friend and fellow “modernizing conservative” Fredrik Reinfeldt in the Swedish election:

It was not that Swedish voters were not impressed with the economy. According to a recent European Commission survey, 97 per cent of Swedes were satisfied with their living standards, a number that would please Kim Jong-un. In the big exit poll, voters said that the Moderates handled the nation’s finances better than any other party. But this success, it seems, was self-defeating. The old law, ‘He who has slaked his thirst turns his back on the well’, seems to have applied. The Swedish Conservatives kindly tidied up the fiscal mess — but why keep the cleaners on after the job is done?

Any country that struggles with financial collapse (and lacklustre recovery) would love to recruit an Anders Borg. But Swedes think they are now out of the woods. They want to talk about other things: the climate, immigration, girl power (the feminist party’s share of the vote rose seven-fold) and the quality of public services.

Reinfelt’s big mistake was to look as if he had finished the job. His coalition seemed out of ideas, with no vision for the future. They had, of course, accomplished most of what they set out to achieve in the first, radical four years — and had also lost their majority in parliament. But the general impression was that they had run out of puff….

Once, it was Reinfeldt who won elections by capturing the imagination and daring to be different. Now, he has played it safe — and lost. Last time, Reinfeldt gave Cameron a masterclass in how to win an election. Now he has given a masterclass in how to lose one.

There’s more, on Sweden’s economic recovery, its remaining problems, the pathetically weak victory of the Social Democrats, and the rise of the populist Sweden Democrats.

Customs and Border Protection’s Extravagant Houses

U.S. Customs and Border Protection is the second largest agency within the Department of Homeland Security (DHS). The agency cost taxpayers $13 billion in fiscal year 2014, and its budget is growing quickly. Spending has increased 85 percent in the last ten years, after accounting for inflation.

This chart shows CBP spending since 1970, including its recent meteoric rise.

Regrettably for taxpayers, all of that money is not being spent wisely. The Washington Post recently highlighted one example of egregious CBP spending:

U.S. Customs and Border Protection “vastly overpaid” for an employee housing project near one of its checkpoints in rural Arizona, spending nearly eight times the average price of homes in the area to build each of the units, according to a federal audit.

The 21 agency homes in Ajo, Ariz, cost about $680,000 each, whereas the average price for a home in the city is $86,500, the Homeland Security Office of Inspector General said in a report on Thursday.

Auditors determined that CBP overpaid for the land, added “nonessential items” and ignored recommendations for the types of houses that should be built. A CBP study had called for one-bedroom homes, but the agency instead built two- and three-bedroom units with amenities such as quartz counter tops, three-car garages and stand-alone freezers.

The report concluded that the homes exceeded employee needs, noting that 80 percent of the agency’s field officers own permanent residences in other locations.

“CBP did not effectively plan and manage employee housing in Ajo, Arizona, and made decisions that resulted in additional costs to the federal government,” the report said.

All told, the auditors identified $4.6 million in expenses that “could have been put to better use.” They noted that CBP increased the cost of the project seven times without explaining how the extra funds would be spent.

Ajo, Arizona represents just one of six areas where CBP is building new homes for its agents. The Inspector General’s report calls on CBP to postpone further construction until it gets this wasteful spending under control.

This is one more example to add to the ever-growing list of wasteful federal spending.
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Curious how much other agencies spend? You can make your own spending charts here at www.DownsizingGovernment.org.

Prof. Krugman Snared By 364 Trap

In his New York Times column of September 15, 2014, How to Get It Wrong,Paul Krugman pleas for open-mindedness and reason. From whence did Prof. Krugman convert from his embrace of dogmatism?

Well, it’s clear that he has not converted. Indeed, the evidence resides about three quarters of the way through his column:

“The great majority of policy-oriented economists believe that increasing government spending in a depressed economy creates jobs, and that slashing it destroys jobs — but European leaders and U.S. Republicans decided to believe the handful of economists asserting the opposite. Neither theory nor history justifies panic over current levels of government debt, but politicians decided to panic anyway, citing unvetted (and, it turned out, flawed) research as justification.”

This passage brings back vivid memories of the 364. In 1981, Margaret Thatcher was prime minister and my friend and collaborator, the late Sir Alan Walters, was her economic guru. Britain’s fiscal deficit was relatively large, 5.6% of its gross domestic product, and the economy was in the middle of a nasty slump. To restart the economy, Thatcher instituted a fierce fiscal squeeze, coupled with an expansionary monetary policy. This was immediately condemned by 364 dyed-in-the-wool Keynesian economists - virtually all of the British establishment. In a letter to the Times, they wrote, “Present policies will deepen the depression, erode the industrial base of our economy and threaten its social and political stability.”

Thatcher and Walters were vindicated quickly. No sooner had the 364 affixed their signatures than the economy turned around and boomed for the next five years. That result provoked disbelief among the Keynesians. After all, according to their dogma, the relationship between the direction of a fiscal impulse and economic activity is supposed to be positive, not negative.

The 364’s dogma was proven wrong. Thatcher and Walters were right.

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