Most people are against earmarks, it seems, except those who dish them out.
The political logic of earmarks is impeccable. If you’re a Congressman or Senator, there’s this big pot of money on the table. If you don’t reach into it, others will, and will leave you with nothing. Do you want to be Congressman Can’t Bring Home the Bacon? Individually, congressmen may largely agree on the idea of getting rid of pork barrel spending. It would actually make their jobs easier, more ennobling even, to focus on the bigger issues of state than who should get what from the public trough. But the people with the power to change the system are the ones who benefit the most from it. They have the most control over the pork. They are the most adept at using that pork to maintain their power. They indeed grew up in this system of power for money, and frankly wouldn’t know what to do if it were drastically changed. So, earmarks are ingrained in our politics.
The economic logic against earmarks is just as impeccable. When a congress-critter proclaims that they secured $500,000 for a new Teapot Museum, their constituents may be thinking, “Do we really need this?” But what many of them are also asking is, “How much money did I send to Washington? If I’m getting this little part of it back, why didn’t they just let me keep it and spend it?” In other words, there is probably little to be gained from my congressman spending my tax dollars on some private benefit for me. I’m perfectly capable of paying museum admission, if I’m interested in patronizing. If I’m not, then why I am I being made to pay for it?
Some people are fooled into thinking that someone else is paying for the goodies that our congressmen “bring home.” But any reasonably educated person (as opposed to overeducated, perhaps) knows that it’s a little like the person who stole your silverware coming back for a visit bearing a nice gift of a serving fork. Gee, thanks.
Posted by Marc Hodak on February 3, 2008 under Invisible trade-offs | Comments are off for this article
The stimulus debate rages on. Here is the current level of the debate:
“Every economist will tell you that stimulus spending will get into the economy much quicker than a tax rebate,” says Sen. Charles Schumer, D-N.Y.
Mark Zandi, chief economist at Moody’s Economy, estimates that every dollar spent on extending jobless benefits will generate $1.64 in new economic activity. Income tax rebates, he said, generate $1.26 of economic activity for every dollar they cost the Treasury.
“It is hard to think of a group of Americans who are more likely to spend the marginal dollar than families that have been forced by job loss to scale back their normal standards of living,” said Alan S. Blinder, a Princeton University economics and public affairs professor.
The Republican opponents to the particular stimulus of extending unemployment benefits make a cogent point, but one hardly likely to convince the bleeding hearts:
“Most people find a job in the last two weeks of their unemployment,” Gregg said. “That’s human nature. They stay on unemployment almost until the end and then they find a job. If you extend it another year, those folks who could be productive, producing a job, creating economic activity by having a job will stay on unemployment even though there may be a job out there that they could take.”
I prefer the all-purpose argument against the effectiveness of “stimulus”–it’s like taking water from one end of the pool, pouring it into the other end, and hoping the overall level rises. For the animal lovers out there, “spurring” the economy should bring images of an unhealthy, short-term solution for a sick horse. It’s an appropriate image if you consider that the money taken by the government to spend on stimulus necessarily comes from the most productive part of our society, the part most likely to bring the economy back to health.
My older son sent this video clip to me as a homage, I suppose, to the philosophy of how he was raised (at least his dad’s contribution).
The advanced version of this lesson is to combine several of these things into a single activity, like model rocketry. Unfortunately, even that is threatened with being regulated into oblivion.
One of the great things about being super-famous is that you have access to certain consumption items not available to the rest of us. One of those cool items is an influential audience for fuzzy ideas that you’re still working through. The media will trumpet your ‘on-the-job’ learning about philosophical and policy issues as if you have something meaningful to add.
So, it turns out that Bill Gates has been engaging in DIY economics to develop an idea he’s calling “creative capitalism.” He introduced this term in a Harvard speech last June.
But at the time he had only a “fuzzy” sense of what he meant. To clarify his thinking, he decided to prepare the Davos speech.
On Jan. 1, following a family vacation, Mr. Gates boarded a commercial flight in Auckland, New Zealand, and during the 21-hour, two-layover journey back to Seattle he started writing his speech.
So, a couple of weeks later, after having read some books and had “a long talk with his wife, Melinda,” he is ready to change the way we approach development economics.
Gates’s business success speaks for itself, and he has had a very public life for nearly two decades. I’m sure it’s easy for him to see all the ad hominem attacks he’s exposing himself to by trying to trumpet a BIG IDEA that has nothing to do with exploiting a monopolistic software standard. He wants to help the world’s poor by tinkering with capitalism. Gates has no doubt seen the public eye-rolling every time some celebritard spouts off on policy issues. He knows, even though he’s infinitely smarter than your average stage monkey, that he will be called hypocritical, amateur, and naive. Well, I don’t have any problem with Bill Gates thinking out loud about global poverty, even if the naive part rings particularly true. I think that any fresh thinking about the problems of the poor should be welcome in light of decades of failure by various public and private groups to help the poor.
Kremlin officials argue that Russian voters are still too tainted by decades of communist rule to be relied on to make responsible choices in the voting booth. “We’re a very leftist country that’s not the least bit concerned with obeying the law,” said one.
At the meeting with foreign analysts in September, Mr. Putin said Russia would need “strong presidential power” for years to come. Parliamentary democracy — of the type tried in the early 1990s — would be “very dangerous” for Russia, he said, for at least another decade.
The heretical thought that rarely surfaces is that weakening democracy in favor of markets could be a good thing. No matter what you believe about how well markets work in absolute terms, if democracy starts to look worse, markets start to look better by comparison.
I think this picture presents a pretty compelling case for why spreading a little more civilization would be a good idea–for someone else to try.
These images will be impossible for the Muslim Council of Britain to overcome no matter what they say. The Sudanese ambassador is whistling in the wind by calling this affair a tempest in a teacup. Politicized Islam, however ugly, is not too different, of course, from politicized Christianity, except for a few centuries of civilization.
Hershey’s, the renown candy company, is controlled by the Hershey Trust, a school for disadvantaged kids. The Chairman of the Hershey Trust is former Pennsylvania Attorney General, LeRoy S. Zimmerman. Says Zimmerman:
The Hershey Trust, which is obligated to manage its assets solely for the benefit of Milton Hershey School, a school for children in need, has made clear it has not been satisfied with the Company’s recent results.
This comment is difficult to take seriously from a man who was swept in on a promise not to maximize the value of the company for the trust.
Zimmerman became chairman after a previous group of trustees in 2002 voted to sell the Hershey’s company to Wrigley’s for $12.5 billion. Local Pennsylvania politicians vehemently opposed that takeover, and successfully thwarted it. The trustees that had voted for the takeover were kicked off the board, leaving the trust firmly under the control of people with strong ties to the local community, but without any direct interest in the trust or the company. And now, Zimmerman insists that that trust’s “resolve to retain its controlling interest (is) an obligation both of our stewardship, and of Pennsylvania law.”
I would think that one’s stewardship might involve some concern about the 25 percent premium that Hershey’s shares commanded as a result of Wrigley’s takeover bid, then lost and never recovered after the bid was scuttled. That’s about $3 billion, about $1.2 billion of which is no longer available to those children in need.
Beyond that, Zimmerman’s comment is a lie. Trust experts say that Hershey’s documents do not stipulate how its assets are to be invested. Basic portfolio theory says that being invested in a single company is just about the least prudent management for the funds of any school. In fact, if they had sold out at any time during or after the Wrigley’s bid, for about the next year, and reinvested the proceeds in the S&P 500, the trust would today have been over 50 percentage points better off than with their investment concentrated in Hershey’s.
Even before the Wrigley’s bid, a Pennsylvania law exempted the Hershey Trust from any duty to diversify its investments. After the failure of that bid, the state passed additional legislation requiring a trust to take into account “the special relationship” and the “economic impact” of any business asset sale “on the community”.
Thus, Pennsylvania politicians who effectively control the Hershey trust have proven themselves willing to sacrifice the interests of needy children for the sake of local politics. And now, they get to act outraged about the poor performance of a company they can’t manage, but upon whom they all depend.
Posted by Marc Hodak on November 5, 2007 under Invisible trade-offs | Comments are off for this article
The big voucher vote in Utah is coming tomorrow. It doesn’t look good for the forces of choice–the betting is that the vote will be about 60% to 40% against vouchers.
I see this outcome as a consequence of path dependence. Public schooling still holds sway for the majority of Americans who went to perfectly good public schools. The only people who know how bad public schools can get are the inner city poor, who tend to support vouchers in large numbers. What does this have to do with path dependence? Consider this counter-factual: if we had all gone to private schools of varying quality, i.e., say schools in wealthier parts of town being much better than schools in poorer sections, as they are today, and the choice was vouchers as proposed (i.e., higher amounts for poorer people) or the creation of government-run schools, how much of the vote do you think would go for the voucher option? I think vouchers would win, and I don’t think it would be anywhere as close as 60-40.
The fact that we’re starting from a reality of public schools give unions huge financial power, of course, since the public sector is the only place a union can thrive. It also gives them the ability to say things like this:
Union members understand the idea of privatization. When you start to privatize anything, you lose the control of quality, such as highly qualified educators and how the money is spent.
For poor kids stuck in crappy public schools, the first part of that–“quality”–may seem like a sick joke. But most suburbanites got theirs, and they don’t want to risk losing it just so some poor (often read: minority) kids can get some, too. The second part–“how the money is spent”–is, of course, what the unions really understand.
From this story, we see where a good education can get you:
Karsnia, 29, joined the airport police department just out of college in 2000 and was promoted to sergeant in 2005. Last year, he earned a master’s degree in criminal justice, leadership and education.
He has arrested at least a dozen men in the airport’s bathroom for sending signals he believed were aimed at initiating sex.
So, a police sergeant with a master’s degree and five years experience is sitting in an airport john all day waiting for someone to tap his toe? Not exactly in the same league of boyhood dreams of being an astronaut, fireman, or cop…uh, at least not the kind of cop you see on TV.
Of course, with leadership training, one might decide it’s not enough to wait for the fly to come to the honey. If you’re after gay men, how much does it take to reel them in? I mean, if gay men are as promiscuous as hetero men (maybe a gay commenter can fill me in on this one), then entrapment can’t be very difficult. I know that if it were illegal to initiate a heterosexual encounter in a public place, it wouldn’t take much for a cute female cop with “leadership” training to quickly net a horde of defendants.
Couldn’t we have these people with master’s degrees selling hot dogs, or washing windows, or cleaning gum off the sidewalk, or anything that actually improves our quality of life rather than adds to a climate of fear and mistrust?
Posted by Marc Hodak on August 1, 2007 under Invisible trade-offs | Comments are off for this article
The U.S. Election Assistance Commission had $3 billion to spend on improved voting processes. They released a report detailing the amount of spending so far by each state. This is a pretty straightforward report dutifully produced by an bureaucracy whose name certainly evokes the “we’re here to help” joke. However, I think it’s very interesting how the news outlets picked it up.
The Wall Street Journal noted that that “just 60% of the $3 billion” had been spent. “Just” sounds like “not enough.” The AP, in a story picked up by the New York times and others, sported the headline, “Some States Slow to Spend Voting Aid.” There is no mistaking the connotation of being “slow.” This article‘s headline said that the states were “behind.” Who wants to be behind on something?
But is it bad that the states have not yet spent 100 percent of these funds allocated to them? The press is clearly implying that these underspending states may not be living up to their responsibility to provide secure voting, possibly forcing us to relive the Florida 2000 debacle. But is that what is really happening? Or might it, perhaps, be a sign that some states are less deliberate or more spendthrift than others? Or that some states are merely more bureaucratic and indecisive?
Or, is it possible that the federal government somehow, perhaps, misallocated $3 billion of funds to the states?
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