Topic: Government and Politics

Fool Me Twice, Shame on Me

The Washington Post decided to bury a story on page A17 today on how the IAEA responded to a House Intelligence Committee report on Iran (.pdf).  The report, which came out to media fanfare a few weeks ago, was drafted by John Bolton’s hyper-hawkish lieutenant Fred Fleitz, who’s reportedly currently drafting a report on North Korea’s capabilities.

Anyway, the IAEA was none too happy with Mr. Fleitz’s handiwork, calling attention to several unsupported claims, among them that Iran is producing weapons-grade uranium at Natanz, noting that the 3.5 percent to which Iran has enriched is a far cry from the roughly 90 percent that is needed for a weapon.

The IAEA was similarly displeased with Mr. Fleitz’s accusation that Mohamed el Baradei kicked an inspector off the Iran project for worrying that Iran was deceiving inspectors.  The IAEA responded by calling this allegation “outrageous and dishonest,” pointing out that the inspector in question was still working on Iran.

More alarming by far, though, is David Albright’s* characterization of what’s been going on:

This is like prewar Iraq all over again.  You have an Iranian nuclear threat that is spun up, using bad information that’s cherry-picked and a report that trashes the inspectors.

*Albright’s outfit, the Institute for Science and International Security, really has been doing yeoman’s work on the Iran question, including its analysis (and posting) of Iran’s August 22 response to the EU3+US proposal.  If you want as dispassionate an analysis as you can get of the issue, go to ISIS.  Good stuff.

Borrow and Spend, Spend and Elect

As chairman of the National Republican Congressional Committee, Rep. Tom Reynolds (R-NY) is charged with helping House Republicans get elected and re-elected. In this difficult year for Republicans he’s facing a tough race at home in the Buffalo area. According to the Wall Street Journal (paid reg. required), he’s using today’s standard Republican formula: promise to cut taxes and spend, spend, spend:

Mr. Reynolds, with about $3 million in campaign contributions, has run ads on local television for more than a month, earlier than in past campaigns. The first emphasized his support for low taxes and few business regulations, ending, “Tom Reynolds – Fighting to save New York jobs.” Another had two retired military officers hailing his role in saving the Niagara Falls Air Reserve Station from shutdown. The third featured a mother holding her toddler while recalling the congressman’s help in forcing Blue Cross/Blue Shield to cover surgeries for the child’s cleft palate. “Tom Reynolds has a big heart,” she says into the camera.

Ouch.

I’m anything but an expert on British politics, but if the head of the Conservatives is making noises like this, we’ve got a serious image problem abroad:

“I and my party are instinctive friends of America and passionate supporters of the Atlantic alliance,” [Conservatives chief David Cameron] said, warning against the “intellectual and moral surrender” of anti-Americanism. But he added that being an uncritical ally was dangerous for Britain: “I fear that if we continue at present we may combine the maximum of exposure with the minimum of real influence over decisions.”

Risking a rift with the Republicans and his own traditionalists, he attacked the “unrealistic and simplistic” neoconservative philosophy of Mr Bush’s closest colleagues and advisers, calling it “a view which sees only light and darkness in the world – and which believes that one can be turned to the other as quickly as flicking a switch”.

Goldwater on Goldwater on HBO

Next Monday, September 18, HBO will broadcast a new documentary, “Mr. Conservative: Goldwater on Goldwater.” The film was made by Barry Goldwater’s granddaughter, CC Goldwater. The Los Angeles Times calls it “an unabashedly admiring — though not wide-eyed — attempt to reclaim her grandfather’s legacy, and to reconcile the man she adored — the avid gadgeteer, ham-radio operator, aviator, and truly talented photographer of American Indians — with the controversial political figure, often heralded as the father of the American conservative movement.”

There are three kinds of people these days who like to call themselves “Goldwater Republicans”:

* libertarians, who tend to ignore the social conservatism of the senator’s 1964 presidential campaign, focusing on his rugged-individualist opposition to the federal leviathan and his later opposition to the religious right;

* liberals, who would perhaps have been Rockefeller Republicans in 1964, when they denounced Goldwater as literally insane; and

* limited-government conservatives, who still believe in the ideals of Goldwater’s book The Conscience of a Conservative and regret the big-government conservatism that now dominates the Republican party.

My guess is that “Goldwater on Goldwater” is going to appeal more to the first two groups than to the actual Goldwaterites. It interviews people from across the political spectrum, but George Will appears to be the only Goldwaterite interviewed, while it also features Hillary Rodham Clinton, Teddy Kennedy, Ben Bradlee, Walter Cronkite, Al Franken, and James Carville. Interviews with the daughter who had an abortion and the gay grandson also indicate a strong emphasis on the later Goldwater.

Either way, spending 90 minutes with Barry Goldwater has got to be a welcome respite from the world of George W. Bush.

A Compelling State Interest in… Fabulous Decor?

I know, this one’s outside my bailiwick, but can you blame me? Apparently New Mexico has forbidden interior designers from calling themselves “interior designers” unless they are officially certified by the government.

What, exactly, is the compelling state interest for such a ban? Are New Mexico legislators fearful that citizens will suffer irreversible harm from bad Feng Shui? “You’ve lined up your dining room table with your couch?!? Are you mad!?!”

Or have they developed such a keenly felt artisitic sensibility that they must spare New Mexicans from a return to the “Interior Desecrations” of the 1970s?

As a forthcoming Cato Institute paper reveals, state licensure of professionals is a bad idea even in important areas like teaching (“Giving Kids the Chaff: How to Find and Keep the Teachers We Need”). That it is even contemplated in interior design is, at the very least, decidedly tacky.

Hat tip, Jacob Sullum.

Pork or Bags of Cash?

I’ve been noodling through a government reform thought experiment, but can’t seem to reach a conclusion. See what you think…

The reform would address that most nefarious dynamic: When the benefits of government spending are concentrated and the costs are dispersed, government will grow and spending will increase.

Mancur Olson described this dynamic more than 40 years ago in The Logic of Collective Action. Steve Slivinski, in his new book Buck Wild, summarizes Olson’s idea as follows:

Olson pointed out that the disparity in incentives between taxpayers and what we now call “special interests” results from an inherent disadvantage of the larger group (i.e., taxpayers) compared to the smaller group (i.e., recipients of public dollars) in its ability to organize to defend its interests. It is this inherent bias in favor of the small special interest groups that provides a very robust explanation of why we still have Big Government, even though many taxpayers would prefer smaller government. “It would be in the best interest of those groups who are organizing to increase their own gains by whatever means possible,” writes Olson. “This would include choosing policies that, though inefficient for the society as a whole, were advantageous for the organized groups because the costs of the policies fell disproportionately on the unorganized.”

To borrow an example from Steve’s book, the National Endowment for the Arts had a 2004 grant budget of $47.4 million — equal to about 0.01% of income taxes. The NEA awarded 1,970 grants that year, so the average grant amount was $24,000. Grant recipients would thus have considerably more financial incentive to lobby for continuing the NEA than individual taxpayers, who on average contribute less than a buck per year to the program, would have to lobby for discontinuing it.

This dynamic is made worse by the common belief that if a government program is cut, its money will be rerouted to some other program instead of returned to taxpayers. Consider, for instance, the lightly-trafficked regional airport in my hometown, which is using a forthcoming, large federal grant to finance a major expansion of its runway. When local residents complained that the expansion was a waste of taxpayers’ money, project defenders responded that the federal government would spend it in some wasteful fashion anyway, so why not do so locally?

The “organized group” that gains the most from Olson’s dynamic is politicians. Because they control the public fisc, they receive the entreaties and gratitude of special interests, and they parlay that gratitude into campaign contributions and electoral support. The result is that politicians and special interests mutually benefit from this dynamic while taxpayers are stuck with the bill.

Nor does the dynamic require bad actors. Special interests can act on the sincere belief that their causes benefit society, and politicians can share that belief or else be brought to embrace it by the quasi-Darwinian forces of elections. In short, Olson’s dynamic appears to be a natural part of the political system.

Unfortunately, it’s a very costly part, as Duke University’s Mike Munger described earlier this summer in an essay on econlib.org. (Will Wilkinson discusses Munger’s essay here, and Munger chats about it on Russ Roberts’ EconTalk here.) Special interests — whether units of government or private entities — will invest resources in lobbying and other efforts to gain the government money. Those investments, in aggregate, may pay off for the special interest (because the government money received offsets the cost of the successful and unsuccessful lobbying efforts), but significant resources are wasted from the perspective of society.

To understand this, suppose a special interest spends L dollars a year on lobbying, and that lobbying yields G dollars in government money. If L < G, the special interest will continue its lobbying, because the cost is offset by the government money received. But the cost to society for the special interest obtaining G is G + L (because society ultimately funds the special interest) + various deadweight losses D from taxation.

 Hopefully, the benefit purchased by the grant will outweigh G + L + D. But there are many cases where that appears not to be the case — consider Ted Stevens’ $231 million “Bridge to Nowhere” for the 50 people of Gravina Island, Alaska. So, society is stuck with paying G + L + D for a benefit that sometimes isn’t even worth G.

Government spending, in theory, is supposed to be for public goods — goods for the benefit of the general public that are not sufficiently provided through private markets because they are neither rivalrous nor exclusive. (There are all sorts of fights over how to understand “sufficiently,” but we need not worry with that here.) However, projects like the Bridge to Nowhere and other instances of pork-barrel spending are better understood as either club goods (goods that are exclusive) or private goods (goods that are rivalrous and exclusive).Neither of those latter two categories of goods seems an appropriate candidate for government provision — or, at least, for federal government provision. Yet it is those two groups of goods for which special interests are willing to spend L in order to gain G.

Can we somehow break up this dynamic, reduce L, and increase the likelihood that public spending goes to true public goods instead of dubious club and private goods?

To do so, we would have to overcome Olson’s dynamic. That would require:

  1. assuring that the money saved from foregone spending is returned to taxpayers (or, at least, to the public),
  2. reshaping the budget system so that politicians are politically rewarded for the money they save, and
  3. aggregating special interest “pork” spending so that taxpayers will have greater incentive to organize.

Hence, my thought experiment: What if individual politicians were given the choice between spending the money allocated to pork barrel spending on actual projects, or handing that money directly to their constituents?

Think about this on the federal level. In essence, each congressional district has its own pork fund (funded in accordance with the congressman seniority, party affiliation, political favors, etc.) that it divvies up among local and national special interests. What would happen if each congressman were given the choice of, instead of simply funding pork, handing out some or all of the money to his constituents?

Public choice analysis asserts that the congressman would follow whichever course of action is most likely to get him reelected. If the politician’s laundry list includes some meritorious public goods that would benefit his community (and thus earn his constituents’ gratitude), he would direct some of the money to those goods. He may also continue to fund some of the club and private goods, if he believes enough voters have a strong-enough preference for them.

But, I suspect, the congressman would detect a strong voter preference for receiving bags of cash instead of dubious-value government goods and services. And that intense preference, I think, would reduce pork barrel spending. That, in turn, would reduce special interests’ incentives to pursue that money, which would reduce L.

But is my suspicion wrong? Would politicians prefer to hand out cash to large numbers of constituents or cut the ribbon for Bridges to Nowhere (after handing out cash to construction companies)?

Moreover, if I am right that handing out cash to constituents is more appealing, would the unintended consequences of this reform (e.g., politicians using the handouts to redistribute wealth to the median voter) be worse than its benefits?

Thoughts?

Divided Government May Help Restore the Republican Party

For the moment, the Democrats are expected to win control of one or both houses of Congress in the congressional election this fall.  That may have two strongly beneficial effects on the Republican Party:

  1. More congressional Republicans will rediscover their commitment to fiscal responsibility when most of the proposals for increased spending originate in a house of Congress controlled by the Democrats.  For the past five years, in contrast, congressional Republicans approved almost all proposals for increased spending by the Republican president or their party colleagues. 
  2. More social conservatives will rediscover their commitment to federalism in order to protect the authority to address value issues by state governments when it becomes clear that there is no political opportunity for federal decisions on these issues.  With the first unified Republican federal government in 50 years, in contrast, social conservatives have been motivated to propose federal political decisions on these issues for which there is no national consensus.

The combination of a long unnecessary war, the fiscal excesses disguised as compassionate conservatism, and an intolerant social agenda has almost destroyed the traditional Republican political coalition, leaving many of us without any enthusiasm for the candidates and policies of either party.  The first step to restoring the Republican Party, ironically, may be a Democratic victory in the congressional election this fall.

Several years in the political wilderness may do much to clear the mind.