If I was Captain Ahab in a Herman Melville novel, my Moby Dick would be the Organization for Economic Cooperation and Development. I have spent more than 15 years fighting that Paris-based bureaucracy. Even to the point that the OECD threatened to throw me in a Mexican jail.
- My main gripe is that the OECD, in hopes of propping up the European welfare states that dominate its membership, tries to enable big tax increases by undermining tax competition.
- It also galls me that the bureaucracy reflexively embraces just about every kind of tax hike,
including class-warfare taxes on income, big new energy taxes, business taxes, and money-vacuuming value-added taxes.
- Additionally, I get irked when the OECD advocates other big-government policies such as Keynesian spending, green energy, and government-run healthcare.
- I also don't like the OECD's dodgy, dishonest, and misleading use of data on issues such as poverty, pay equity, inequality, and comparative economics.
- And, to add insult to injury, the bureaucrats at the OECD get a special exemption so their gold-plated salaries are tax free, even though they spend so much time trying to impose higher taxes on the rest of us.
So when I had a chance earlier today to comment on the OECD's statist agenda, I could barely contain myself
Notwithstanding the glitch at the beginning (the perils of a producer talking in my ear), I greatly enjoyed the opportunity to castigate the OECD.
That is the question asked by Scott Alexander and John Cochrane in discussing high school education, college and infrastructure spending. Despite rising funding, it is not clear outcomes are improving.
Scott highlights the example of K-through-12 public education where spending has increased substantially since 1970 but test scores have remained stagnant. He asks:
Which would you prefer? Sending your child to a 2016 school? Or sending your child to a 1975 school, and getting a check for $5,000 every year?
On college he presents a similar counterfactual:
Would you rather graduate from a modern college, or graduate from a college more like the one your parents went to, plus get a check for $72,000? (or, more realistically, have $72,000 less in student loans to pay off)
He also highlights the rising cost of infrastructure spending through the example of a New York City subway:
1900...it’s about the inflation-adjusted equivalent of $100 million/kilometer today... In contrast…a new New York subway line being opened this year costs about $2.2 billion per kilometer
As Scott outlines, the underlying crisis here is made all the worse by the fact that new technologies and globalization should have put downward pressure on the costs of provision.
Two questions arise: why is this happening and what can be done about it?
This requires a huge amount of research. Certainly it cannot be answered in a blog post. But I want to suggest an analytical framework for thinking about these examples that can be applied in each case to work out what is going wrong. This is all the more necessary because the absence of meaningful prices in the public sector makes measuring productivity much more difficult than in the full market sector of the economy.
Rather than merely comparing money spent to outcomes, we can break things down as follows:
Taxpayer dollars -> Inputs -> Production process -> Outputs -> Outcomes (quality-adjusted outputs)
Take schooling. We pay money in through taxes. These are used to fund the labor (teachers, administrators etc), to build schools, and to pay for the goods and services used within schools. The schools then operate. And those inputs work to produce measurable outputs in terms of number of children being taught, hours of teaching, exams prepared for etc. But what we really care about is outcomes, which are linked to but not quite the same thing (think test scores). This is best thought of as a measure of quality-adjusted output. Productivity (to the extent we can measure it) can be thought of as the ratio of outputs to inputs, whereas what we ultimately care about here is improving the effectiveness of money spent (outcomes over taxpayer dollars).
Sen. Jeff Flake (R-Ariz.) follows retired Tom Coburn in reporting on the ludicrous waste of taxpayer dollars in Washington with “Wastebook 2015: The Farce Awakens.” Alas, the waste never sleeps, despite the supposed austerity that we hear so much about.
For instance, the National Institutes of Health spent about $10 million on studies of monkeys on treadmills. The results are to help “address physiological responses of exercise in a marmoset model.”
The Agency for International Development dropped $2.1 million on tourism promotion for Lebanon. Last May the State Department issued a travel advisory urging Americans to avoid this neighbor of Syria “because of ongoing safety and security concerns.”
The National Institutes of Health used $5 million to convince “hipsters” to stop smoking. Parties were organized for and payments were made to persuade Hipsters to quit tobacco.
The National Science Foundation provided $5 million to figure out how long a “koozie” would keep a beer cold. Researchers instructed drinkers not to wipe off condensation drops, which would warm the drink.
The National Institute of Drug Abuse spent almost $1 million to learn that pizza may be as addictive as crack cocaine. At least to college students. Perhaps the Obama administration plans a War on Pizza?
The Department of Agriculture (known as USDA) devoted $119 million in 2015 to underwrite the tobacco industry. Whose prime product the government is paying Hipsters not to use.
Back in 2011 I wrote several times about the failure of Solyndra, the solar panel company that was well connected to the Obama administration. Then, as with so many stories, the topic passed out of the headlines and I lost touch with it. Today, the Washington Post and other papers bring news of a newly released federal investigative report:
Top leaders of a troubled solar panel company that cost taxpayers a half-billion dollars repeatedly misled federal officials and omitted information about the firm’s financial prospects as they sought to win a major government loan, according to a newly-released federal investigative report.
Solyndra’s leaders engaged in a “pattern of false and misleading assertions” that drew a rosy picture of their company enjoying robust sales while they lobbied to win the first clean energy loan the new administration awarded in 2009, a lengthy investigation uncovered. The Silicon Valley start-up’s dramatic rise and then collapse into bankruptcy two years later became a rallying cry for critics of President Obama’s signature program to create jobs by injecting billions of dollars into clean energy firms.
And why would it become such a rallying cry for critics? Well, consider the hyperlink the Post inserted at that point in the article: "[Past coverage: Solyndra: Politics infused Obama energy programs]" And what did that article report?Read the rest of this post »
Two years after whistleblowers submitted tips to the Commerce Department Inspector General’s office, the United States Patent and Trademark Office (USPTO) is acknowledging extensive timekeeping fraud among its employees. Many employees have reported working more hours and achieving higher levels of production than they actually did in order to secure overtime pay and bonuses.
The Washington Post has the details:
For example, patent examiners are allowed to submit incomplete reviews in order to meet productivity deadlines that ensure their work will be rewarded with bonuses. But the work is not always completed, the officials told congressional investigators.
They also said they believe they have adequate tools to allow managers to make sure the examiners they supervise are working, primarily through e‑mail and phone calls. The 32‐page review had concluded that many managers feel they have little authority to oversee their employees’ work; examiners have a full day to respond to calls and are not required to log into the agency’s internal Web site, so their bosses do not know if they are at their desks at a given time…
More than 70 percent of the 80 managers interviewed told the internal review team that a “significant” number of examiners did not work for long periods, then rushed to get their reviews done at the end of each quarter. The supervisors were concerned that the practice negatively affected the quality of the work.
After the tips were received, USPTO assigned an internal team to investigate. The team produced a 32 page report detailing the abuse. However, the agency scrubbed the report before submitting it to the inspector general. According to the Washington Post, “top patent officials removed the most damaging revelations from the report, providing the agency’s inspector general with an account half the length and with many potentially embarrassing findings removed.”
The agency now claims that the issue is under control. Workers are required to log into the agency’s remote server while teleworking. Unlike many federal agencies, the USPTO is specifically authorized by the U.S. Constitution, but it still has a duty to spend money wisely.
The Associated Press reports:
For a growing number of children in Rhode Island, Iowa and other states, the school day starts and ends in the same way — they walk with their classmates and an adult volunteer to and from school. Walking school buses are catching on in school districts nationwide because they are seen as a way to fight childhood obesity, improve attendance rates and ensure that kids get to school safely.…
Many programs across the country are funded by the federal Safe Routes to School program, which pays for infrastructure improvements and initiatives to enable children to walk and bike to school.
Some people say innovation is dead in America, but NASA is always looking for innovative ways to extract more money from the taxpayers. The Wall Street Journal reports on some of their innovations in using our tax dollars to persuade us to give them even more of those tax dollars:
In William Forstchen’s new science fiction novel, “Pillar to the Sky,” there are no evil cyborgs, alien invasions or time travel calamities. The threat to humanity is far more pedestrian: tightfisted bureaucrats who have slashed NASA’s budget.
The novel is the first in a new series of “NASA‐Inspired Works of Fiction,” which grew out of a collaboration between the National Aeronautics and Space Administration and science fiction publisher Tor. The partnership pairs up novelists with NASA scientists and engineers, who help writers develop scientifically plausible story lines and spot‐check manuscripts for technical errors.
The plot of Mr. Forstchen’s novel hinges on a multibillion‐dollar effort to build a 23,000-mile-high space elevator—a quest threatened by budget cuts and stingy congressmen.…
It isn’t the first time NASA has ventured into pop culture. NASA has commissioned art work celebrating its accomplishments from luminaries like Norman Rockwell and Andy Warhol. …
Some see NASA’s involvement in movies, music and books as an attempt to subtly shape public opinion about its programs.
“Getting a message across embedded in a narrative rather than as an overt ad or press release is a subtle way of trying to influence people’s minds,” says Charles Seife, author of “Decoding the Universe,” who has written about NASA’s efforts to rebrand itself. “It makes me worry about propaganda.”
Lobbying with taxpayers’ money isn’t new. But as Thomas Jefferson wrote in the Virginia Statute of Religious Liberty: “To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical.” To compel him to furnish contributions of money to petition his elected officials to demand more contributions from him just adds insult to injury.