Topic: Government and Politics

Behold Your Government in Action

The U.S. Senate is a busy place.  Lately it has been spending billions and billions over and above the trillions in unfunded liabilities.  Given all this activity, who would have imagined that the senators could find the time to pass a resolution about the emergency plane landing in the Hudson river in New York?

I’m not a historian or political science expert, but this Senate is clearly determined to be the very best we have ever had.  What a record pace they are setting!

Can We Afford All This Spending? No We Can’t.

President Obama says that “our economy is badly weakened,” partly because of “our collective failure to make hard choices.” And that when government programs don’t work, “programs will end.” Yet he continues to press for a spending program that apparently only begins at $825 billion.

In 1993 a Democratic Congress failed to pass President Clinton’s request for a $16.3 billion stimulus package. A year ago Congress passed a $150 billion stimulus bill proposed by President Bush, a fitting cap to Bush’s massive increase in federal spending.

It had no apparent effect.

And now, in a continuing ratcheting up of spending levels, President Obama and Congress propose to spend the not-very-long-ago unimaginable sum of roughly a trillion dollars. As Chris Edwards wrote recently, we’re already looking at deficits of two trillion dollars in fiscal years 2008 and 2009. If that much deficit spending doesn’t do the Keynesian trick, do we really expect that another trillion dollars will?

Political leaders talk about making the hard choices and laying the groundwork for the future, but their actions demonstrate a different approach. They try to solve problems – or at least to be seen to be solving problems – today without in fact thinking about the long term.

Where will this new spending come from? It could come from raising taxes; but even President Obama seems reluctant to raise taxes during a sharp economic slowdown, indicating that he does know that taxes reduce work, investment, and production. And would anyone propose to raise taxes by $825 billion? Or by the $3 trillion that it would take to cover the already-projected deficits and the current proposed spending? And of course money taxed away from those who earn it is taken out of the economy, only to be reinjected by politicians and planners rather than by consumers and investors. That means, as the Washington Post reported on Tuesday, “It will fall to Obama and his subordinates to decide winners and losers in the banking, financial services, automobile and other major industries, a span of control that dwarfs President Harry S. Truman’s attempt to seize control of steel production.” That’s not good for freedom or for economic growth.

If not taxes, of course we could borrow the money. Assuming a government plunging further in debt to the tune of a trillion dollars a year can still borrow. But again, borrowing just transfers money from private investment to political investment. What we’ll actually probably do is create the money out of thin air on the books of the Federal Reserve. More money injected into the economy surely means inflation, maybe a lot of inflation given the size of the spending already undertaken or now in the works.

Those are the costs. Now what are the benefits? Where will all this money go? I intended to list in this blog item all the programs that make up that $825 billion. But it turns out that even the summary list of the gravy runs 13 pages (and I’m sure the Democrats appreciate our having linked to their advertising flyer three times now). The Wall Street Journal printed a graphic on January 16 (apparently not online) showing the different programs piled up like boxes in a Hillary Clinton Christmas campaign ad: Hundreds of billions of dollars to state government, in a completely useless shuffling of taxpayers’ money. Plus more billions for education, which also means for state and local governments. Money for certain highways, favored kinds of energy projects, politically popular research, specific forms of technology. As the Post said, “Obama and his subordinates [will] decide winners and losers.” And just a bit – maybe not more than, you know, $100 billion – for welfare programs, which are hardly economic stimulus but will no doubt be popular with recipients. You can find the complete bill at http://readthestimulus.org/, where they encourage people to join the effort to comb through the 334 pages and report what’s in there.

Man, if you can’t get some of that boodle, you need a better lobbyist. Because of course, as James Q. Wilson noted in his review of a book on lobbying, that’s what lobbyists do: they get their clients a piece of government programs. And the more programs there are, and the more money is appropriated for them, the more work there is for lobbyists.

Once it’s allocated, how will the money be spent? Can the federal government, even with the assistance of a new Chief Performance Officer, promptly and effectively spend $825 billion? One of Greg Mankiw’s readers worked on the new Department of Homeland Security and reports:

you cannot juice up a government agency’s budget by tens of billions (or in the case of the stimulus package, hundreds of billions) and expect them to be able to process the paperwork to contract it out, much less oversee the projects or even choose them with any kind of hope for success. It’s like trying to feed a Pomeranian a 25 lb turkey. It’s madness. It was years before DHS got the situation under control and between the start and when they finally assembled a sufficiently capable team of lawyers, contracting officials, technical experts and resource managers, most of the money was totally wasted.

Linda Bilmes, coauthor with Joseph Stiglitz of The Three Trillion Dollar War: The True Cost of the Iraq Conflict, analyzes the massive problems in three somewhat smaller government projects – the Iraqi reconstruction effort, Hurricane Katrina reconstruction, and the Big Dig artery construction in Boston – and finds that “in any organization that starts to increase spending very rapidly there are risks of waste, fraud and inefficiency.”

Can we afford all this spending? Can we spend it effectively to create growth? No we can’t.

Is the New Obama Administration Walking Away from Transparency Already?

The new Whitehouse.gov went live shortly after Barack Obama became president yesterday. It has much of the look and feel of his transition Web site, Change.gov.

Among the featured items on the homepage today (they will change regularly, of course) is the site itself and the new administration’s commitment to transparency. However, the actual terms of that commitment come up pretty anemic.

In a post on the White House blog, Director of New Media Macon Phillips says:

President Obama has committed to making his administration the most open and transparent in history, and WhiteHouse.gov will play a major role in delivering on that promise. The President’s executive orders and proclamations will be published for everyone to review, and that’s just the beginning of our efforts to provide a window for all Americans into the business of the government. You can also learn about some of the senior leadership in the new administration and about the President’s policy priorities.

Executive orders and proclamations? Information about senior leadership and the president’s priorities? That’s not breaking any new ground on transparency.

The transition’s “Seat at the Table” program required “any documents from official meetings with outside organizations [to] be posted on our website for people to review and comment on.”

The decision to port this practice over to the White House has either not been made, or has been decided against. Given that meetings are already happening, it will be a tough policy to implement if it is not implemented right away.

There is an “Office of Public Liaison” (and intergovernmental affairs) on the Whitehouse.gov site, but it’s nothing more than an email submission form at this point. “More ways for you to interact” are promised.

Words aren’t deeds, and it’s already too late to demonstrate a day-one commitment to transparency. Let’s hope the first steps of the new administration are not steps away from the important transparency precedents set by the transition.

Update: As this post was being written and edited, news stories were coming out about new executive orders dealing with ethics and transparency. Though I haven’t been able to find them yet – hint hint, Whitehouse.gov – the change to the interpretation of FOIA sounds like a welcome, though modest, step in the right direction.

Responsibilities

President Obama delivered an interesting inaugural speech yesterday. His theme was responsibility, a theme that provides a useful frame for his administration.

The individual versus the collective: Americans generally affirm individual or personal responsibility for one’s life. To be an adult – to put aside childish things - means taking responsibility for one’s actions and outcomes. Yet language permits another possibility. “We” can take responsibility for this outcome or that injustice. Putting aside childish things means taking collective responsibility through government action. In this view, emphasizing the individual suggests a childish selfishness that should be overcome. Obama seems to be about both kinds of responsibility right now. But extending state control over society vitiates personal responsibility. The new president will have to choose between the two.

The rule of law versus charisma: In a free society, individuals associate together through consent within a set of impersonal rules enforced by an impartial judiciary. Societies may also be ruled by charismatic leaders who are thought to have special powers granted by divine favor or by other means. Charismatic authority undermines both individual and collective responsibility. No one need do anything: the special man will say the magic words and everything will change for the better. Moreover, charismatic men with special powers should not be restrained by mere laws. They are above such restraints and must be so to do their work.

Consequences versus absolute ends: In an ethic of responsibility, leaders and followers look to consequences in acting politically. President Obama alluded to an ethic of responsibility yesterday. We want a government that works; programs that do not work will be ended. The thought is admirable, the reality unpromising. Ronald Reagan eliminated two federal programs, one of which was a training program that worsened the lot of its clients. Reagan was thought to have a mandate to cut back government. Obama was elected for many reasons, none of which were constraining the federal government. More than a few of his followers expect he will, as he put it yesterday, “remake the world.” Those who set out to remake the world rarely notice the immediate consequences of their crusade. After all, the benefits of bringing heaven to earth will more than overcome the costs of the crusade.

Obama’s modest demeanor suggests an understanding of his own limitations.  If that is true, he may turn out to be more a politician and less a priest, a president content to live within the laws and achieve marginal changes in public policy.

But I wonder. Living in Washington, DC, I have recently had reason to recall Samuel Johnson’s remark about Shakespeare: “In his plays, there are no heroes, only men.” Obama seems to be telling a different story, a tale about charismatic heroes and utopian aspirations. When the talking stops and the doing begins, one question will be answered: Do Americans really want to live out a play where there are no men, only heroes?

Bush’s Gift to Obama: A More Powerful State

Friends of freedom, the Constitution, and limited government have plenty of reasons to deplore the past eight years. But in case you thought we might get some relief now, this Washington Post article from inauguration morning will change your mind. One of the points it makes – as some of us warned during the past few years – is that powers claimed by one president are left in the hands of the next, even though the first president’s supporters might have less confidence in his successor’s integrity and wisdom. So here’s the government that President Bush and the Republicans have turned over to President Obama and the Democrats:

Barack Obama takes office today with a realistic prospect of joining the ranks of history’s most powerful presidents….

Historians, recent White House officials and senior members of the incoming team expressed broad agreement that Obama begins his term in command of an office that is at or near its historic zenith….

The federal government itself is a far more potent instrument, in its breadth and depth of command over national life, than it has ever been before. Largely in response to the threat of terrorism, the Bush years and President Bill Clinton’s two terms saw “an incredible period of state-building that’s unrivaled in American history except by the creation of the national security state in the 1940s and ’50s,” said Jack Balkin, a professor of constitutional law at Yale whose blog, Balkinization, is often cited by members of the Obama team.

By necessity or design, and most often by passive acquiescence, Congress and the courts have let presidents do most of the steering of the new and expanded institutions that govern finance, commerce, communications, travel, energy production and especially intelligence gathering. When there were struggles for dominance among the three branches, most of them ended with lopsided victories for the executive.

The legislative power to declare war and ratify treaties, for example, has been deeply eroded by the practice of presidents to launch military operations on their own and to make major international commitments – such as December’s “status of forces” pact with Iraq – by “executive agreement” rather than by treaty requiring a two-thirds Senate vote. After lengthy controversy over warrantless domestic surveillance in the Bush administration, Congress authorized the program without obtaining any details about what, exactly, is collected and how it is used.

“Really, in the last 80 years we’ve seen a gradual, and at times not gradual, concentration of power in the executive office,” said William P. Marshall, who served as deputy White House counsel under Clinton….

Even in its first iteration, the government’s $700 billion expenditure to shore up U.S. financial systems will rival the roughly $1 trillion a year in “discretionary” federal spending – the portion of the budget, not including interest on loans and mandatory benefits such as Social Security, that is negotiated each year between the White House and Congress. Obama, who told The Post last week that he must “go big” in response to “the biggest emergency since World War II,” has spoken elliptically of the prospect that the cost could double.

Congress, the principal power of which is thought to be control of the national purse, has made little pretense of managing these vast expenditures. It will fall to Obama and his subordinates to decide winners and losers in the banking, financial services, automobile and other major industries, a span of control that dwarfs President Harry S. Truman’s attempt to seize control of steel production.

We don’t know yet whether President Obama will prove to be FDR or Jimmy Carter. But it’s clear that the freedom movement faces challenges that aren’t going away.

Dissident Notes on the Obama Coronation

It’s wall-to-wall Obama in the newspapers and on the airwaves, and I keep wondering, Was it quite so overwhelming in the run-up to previous inaugurations? I think not. Presumably the gushing media response is generated by some combination of Barack Obama’s being our first African-American president, his being the antidote to an epidemic of Bush Derangement Syndrome, and our growing cult of the presidency. I complained once about people who see the president as “a combination of Superman, Santa Claus, and Mother Teresa,” and this month journalists are leading the way. Even New York Times reporter Helene Cooper, writing the “pool report” for other journalists on Obama’s visit to the Washington Post, noted that “around 100 people–Post reporters perhaps?–awaited PEOTUS’s arrival, cheering and bobbing their coffee cups.” Post reporter Howard Kurtz assured readers that his fellow journalists did gawk, but they did not cheer or applaud.

The Washington Post banners Obama’s “centrist approach.” Even Blue Dog Democrat Jim Cooper says he’s showing “great centrism.” He’s promising to spend a trillion dollars more than the most spendthrift president in history. If he promised to spend two trillion dollars more, would the Post see his program as left-liberal?

For politicians everything is politics: “It has been more than three months since he sat through a Sunday church service and at least five years since he attended regularly, but during the transition, Obama has spoken to religious leaders almost daily. They said Obama calls to seek advice, but rarely is it spiritual. Instead, he asks how to mobilize faith-based communities behind his administration.”

Nation’s Hopes High for Obama,” says the Washington Post-ABC News poll. Those polled say that they have high expectations for his administration, they think he has a mandate for major new programs, and they like his promise to give virtually everyone some money. Indeed, according to a graphic in the paper but apparently not online, 79 percent of respondents have a favorable impression of Barack Obama, much higher than the numbers for Reagan, Bush I, Clinton, or Bush II as they prepared to take office. In fact, the only modern president whose favorable ratings on the eve of inauguration matched Obama’s was Jimmy Carter. Hmmmmm.

Bob Woodward offers 10 lessons Obama could learn from the mistakes of the Bush administration. One of them is “Righteous motives are not enough for effective policy.” Woodward directs all his lessons at foreign and defense policy, but that’s a good rule for domestic policy too. The fact that a policy sounds right-minded – create jobs, raise the minimum wage, ban sweatshop products, mandate energy efficiency – doesn’t mean that it will work. Economic processes are dynamic, not static. Benefits have costs. Another of Woodward’s rules is “A president must do the homework to master the fundamental ideas and concepts behind his policies.” Again, that applies to economic as well as to foreign policy. Has Obama read any thoughtful criticisms of Keynesian economics or of “job creation” schemes or of renewable-energy mandates? He met with conservative pundits, but has he sat down and listened to any of the many economists who oppose his stimulus plans?

On a lighter note, former “Saturday Night Live” writer and Will Ferrell collaborator Adam McKay discussed Ferrell’s Broadway show, “You’re Welcome America: A Final Night with George W. Bush” with the Washington Post. Asked how he might make Obama-related comedy, McKay said it would be tough because “Obama’s an actual adult who knows how to work.” Let’s see … four years ago Obama was voting “present” in the state senate, and now he’s going to be president. His supporters range from journalists who compared him to “the New Testament” to actual voters who exult, “I won’t have to worry about putting gas in my car. I won’t have to worry about paying my mortgage. You know. If I help [Obama], he’s gonna help me.” He himself said that his capture of the Democratic nomination “was the moment when the rise of the oceans began to slow.” If humorists can’t find some humor there, we need better humorists.

And maybe it’s appropriate that a singer known as “The Boss” headlined the inaugural concert for a candidate whose wife promised, “Barack Obama will require you to work… . Barack will never allow you to go back to your lives as usual, uninvolved, uninformed.”