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Dispatches from a Small Business
Archive for the ‘Government’ Category.
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Every year I am required by law to fill out what is called the "Accommodation Report" by the Census Bureau. As a lodging company (we run campgrounds) I must reveal my revenues and some of my expenses. They ask for numbers aggregated differently from how we collect them for GAAP, so it is not a simple exercise. But I do it under protest, even though several of my competitors do not seem to be similarly punished with this requirement.
Well, I don't actually fully comply. We run over 150 small locations, and technically I am supposed to fill out an 8-page accommodation survey for every one of them. This would take a week of my time. So I pretend I have only one campground and report my summary revenue numbers for all our campgrounds as if they were for one location. Also, a year ago the Census folks began demanding the data quarterly, and I told them to pound sand, that I was on the verge of not doing the annual report and so I definitely was not going to do all that work quarterly.
Well, this year it got worse. For some reason, the survey this year had 3 extra pages asking me to break down my expenses in detail, in many categories that do not match those that I use in my bookkeeping. Here is an example page:
First, not only do I not have time to figure this out (who tracks software purchases as its own item in the accounting system?), but it is not the government's business, particularly given that I am a private company. Even the IRS is not this intrusive.
Further, at best the data I report will be used for nothing. More likely, it will be used to justify new taxes on me, new regulations on me, or new subsidies for my competitors. I have no desire to aid any of these activities.
Postscript: And you know what I have zero patience with? -- otherwise free market academic economists who support this kind of data gathering because it is critical. Yes, I am sure they much prefer to get free statistics for their work gathered via government coercion rather than have to pay for it, as one would have to do if we relied on private companies to gather this data rather than the government. There is absolutely no difference between an economist supporting government statistics gathering and any other company or individual asking that the government subsidize their inputs. But, but, we are critical to the country! Yeah, the sugar industry says the same thing.
After the new fee disclosure statements went out, roughly the same percentage—half!—of participants said that they still do not know how much they pay in plan annual fees and expenses, according to a recent survey by LIMRA, an association of insurance and financial services organizations.
....For those 401(k) participants who said they thought they knew how much they paid in fees, most of them were way off base. One out of four participants thought they paid 25% or more in fees, 16% thought they paid between 10% to 24% in fees, and 30% thought they paid between 2% and 9% in fees. Only 28% of participants thought their fees were less than 2%.
That group is the closest to reality. On average fees and expenses range between 1 to 2 percent, depending on the size of the plan (how many employees are covered) and the employees’ allocation choices (index funds versus actively managed funds), says LIMRA.
First, this is bizarre, as the indictment here of private fund management seems to be that people are *gasp* paying fees that are much lower than they think they are. Also, it may well be that these people are not mistaken, but just using a different mental definition for fee percentage. After all, why is total assets necessarily the best denominator for this calculation? Obviously the fund industry likes it that way because it gives the lowest number, but it could be that people are thinking about annual fees as a percentage of the annual income. Thus a fee of 1-2% of assets could well be 25% of annual income. Hell, since I invest for income growth, I could argue that this is a MORE rational way to think about fees. Obviously Drum and Yglesias are just captive mouthpieces of big Mutual Fund.
Second, and perhaps more importantly -- do you know what retirement fund has higher implicit fees and a lower lifetime total return than nearly any private fund in existence? Social Security. Read your statement you get and do the math. You will find that the total you will likely get out will be less than you put in, even BEFORE present value effects, even if you have put money in for 30 years. In other words, the internal rate of return on your and your employer's taxes is less than zero.
Ahh, but you say, that is because your Social Security taxes are going to subsidize people who don't work. Fine, but then don't be surprised if there is strong support for a retirement system that does not pass the money through government hands. Even getting a crappy rate of return from some hack investment manager is likely still better than putting your money in a government system where cash is skimmed off to feed whatever political constituency has the clout to grab it.
Postscript -- by the way, I leave aside the issue of whether it is a productive thing to tax-subsidize. I am generally against tax preference for selected behaviors, even relatively popular ones like savings. But Yglesias wants to replace 401-K's with some kind of coerced government system (the note about fees above is to make the case that the average person cannot be trusted and that our masters need to do the savings for us). Image one giant Calpers. Ugh.
When an election was in the offing and 60 Minutes was paying attention, Congress voted a couple of years ago to finally remove the exemption that protected Congress and its staff from insider trading laws that apply to everyone else.
Now that the election is over and no one is looking, Congress has reversed itself
So... with very little fanfare, Congress quietly rolled back a big part of the law late last week. Specifically the part that required staffers to post disclosures about their financial transactions, so that the public could make sure there was no insider trading going on. Congress tried to cover up this fairly significant change because they, themselves, claimed that it would pose a "national risk" to have this information public. A national risk to their bank accounts.
It was such a national risk that Congress did the whole thing quietly, with no debate. The bill was introduced in the Senate on Thursday and quickly voted on late that night when no one was paying attention. Friday afternoon (the best time to sneak through news), the House picked it up byunanimous consent. The House ignored its own promise to give Congress three days to read a bill before holding a vote, because this kind of thing is too important to let anyone read the bill before Congress had to pass it.
I have written before that the single best framework for explaining the actions of most government agencies is to assume they are run for the benefit of their employees. This certainly seems to be the case at the FAA, which can't over 10+ years complete a modernization of its computer system or match free, private Internet tools for flight tracking, but it was able to very quickly publish a web application to promote the danger of the sequester. Public service is not even on these guys radar screens, as they have shown themselves completely willing to screw the public in a game of chicken to get more funding back for their agency
But after Mr. Coburn published his letter on his website, FAA regional employees wrote to blow the whistle on their bosses. As one email put it, "the FAA management has stated in meetings that they need to make the furloughs as hard as possible for the public so that they understand how serious it is."
Strategies include encouraging union workers to take the same furlough day to increase congestion. "I am disgusted with everything that I see since the sequester took place," another FAA employee wrote. "Whether in HQ or at the field level it is clear that our management has no intention of managing anything. The only effort that I see is geared towards generating fear and demonstrating failure." Just so.
I think that I am just going to post this line from Kevin Drum largely without comment:
In particular—and please excuse the wild guess here—I imagine that most people who have a serious jones for cutting federal spending are really only interested in cutting spending on poor people. Cutting other services just isn't what they signed up for. It's the Obamaphones and the food stamps that are wasteful, not the Yellowstone snowplows and small town air traffic controllers.
One of the things I tell folks in the climate debate -- don't try to learn about the other side of the argument from yours by listening to your own folks' characterization of it, go actually listen to the other side. This is what comes of trying to understand people only by listening to their intellectual enemies. It is also why I read a lot of blogs (like Drum's) with which I disagree.
Has Drum seriously not ever heard the concentrated benefits, dispersed cost argument?
I love this little story of one of the richest men in the world being unable to complete a real estate parcel he wanted. Why? Because this would never happen today. The owners and tenants of the small properties Rockefeller wanted to acquire actually had strong property rights in the 1930's. Today, a rich real estate developer would just go to the city and have their property declared blighted, seized by eminent domain, and handed to them on a platter.
Zero Hedge pointed out this ad for California state bonds:
In light of the recent Stockton bankruptcy, this should carry a warning label: "California reserves the right to repudiate up to 100% of these bonds whenever payment of the interest or principle interferes with paying state employees the maximum possible pension benefits. These bonds are subordinated to any promises made at any time by any politician to state employees unions, past, present, or future."
Matt Welch has a good article here about a self-refuting NPR piece, which was obviously supposed to be a scare story about the loss of Sequestration money but turned out to be an illustration of just how stupid the sequestration panic was. It's funny listening to the podcast of this episode as the NPR hosts desperately try to support the Administration position.
But one thing I thought was funny was this bit illustrating pre-sequester government staffing prioritization:
NPR's David Greene brings on Yvette Aehle, director of the Southwest Georgia Regional Airport in Albany, Georgia, to talk about the terrible danger that passengers will face now that Aehle's airport stands to lose its air traffic controllers:
AEHLE: Well, I don't really want to say anything is less safe. It's just a better opportunity for people to listen and to be heard and to understand where they are. And also, I'd like to point out that we don't have 24-hour tower coverage here currently. Those air traffic controllers are only directing traffic between 8 am to 8 pm seven days a week. And most of our heavy traffic is outside of those hours.
So the government chooses to staff the control tower only half the day. But they choose to staff the tower during the 12 hours of lightest traffic, presumably because the employees wanted day jobs rather than night jobs.
As an aside, I will confess that my business of running public parks benefits from this. The biggest management load on parks is obviously on weekends and in the evenings (in campgrounds). Most employees of public agencies only work weekday days. Its incredibly typical that public parks employees will take their vacations in July and August, by far the busiest months. One advantage (other than the obvious cost advantage) we have over public operations is that public agencies can't or won't ask their employees to work weekends and defer their vacations out of the summer time. We are perfectly happy to hire people with very clear expectations that the job involves work on weekend and holidays.
I will give you my reminder of how to understand most government agencies: Ignore the agency's stated purpose, and assume that it is being operated primarily for the benefit of its employees. One will very often find that this simple heuristic is far better at explaining agency decisions than relying on the agency's mission statement (this does not mean that there are not dedicated individuals in the agency truly, even selflessly, dedicated to the stated mission -- these two notions are not at all mutually exclusive. Government agencies do not act badly because they are full of bad people, they act badly because their incentives cause good people to do stupid things).
First, I will say that I am perfectly happy for folks who are either good earners or good savers or both and who choose to use their accumulated wealth to stop working at some age.
However, I am completely lost as to how we have somehow decided that multi-decade end-of-life paid vacations, starting as early as age 50, is somehow an inalienable right that must be guaranteed by government. I suppose I can see a safety net for folks who, though age and disability, simply get too old to be productive (but remember that I have nearly 500 people mostly over 65 who work for me, mostly doing manual trades, so don't tell me older people can't be productive). And that was what Social Security initially was -- the age 65 was chosen as a retirement age not because it guaranteed 10-15 years of senior leisure but because it matched the life expectancy at the time. The equivalent age would be well into the 70's today.
Of course, others think differently. A group is now proposing an expanded Social Security program that would guarantee nearly 100% of earnings to low-income retirees (there are smaller increases for higher income workers but most all the change is for low-income folks).
While they are proposing higher taxes to support this, my guess is that it will not be long before a wealth tax is suggested. After all, they are hoping to replace 401K's as a savings vehicle. If so, why not seize those funds to help pay for the plan. The other day, Kevin Drum mocked those who fear a government seizure of 401K's as the tinfoil hat brigade. I would be willing to bet him that within the decade, it will become a mainstream idea in the progressive community to fund shortfalls in Social Security and Medicare with a full or partial seizure of 401K's.
Years ago I had an argument with my mother-in-law, who is a classic Massachusetts liberal (by the way, we get along fine -- I have no tolerance for the notion that one can't be friends with someone who has a different set of politics). The argument was very clarifying for me and centered around the notion of coercion.
I can't entirely remember what the argument was about, but I think it was over government-mandated retirement programs. Should the government be forcing one to save, and if so, should the government do the investment of those savings (ie as they do in Social Security) even if this means substantially lower returns on investment?
The interesting part was we both used the word "arrogant." I said it was arrogant for a few people in government to assume they could make better decisions for individuals. She said it was arrogant for me to assume that all those individuals out there had the same training and capability that I had to be able to make good decisions for themselves.
And at the end of the day, that is essentially the two sides of the argument over government paternalism boiled down to its core. I thought coercion was immoral, she thought letting unprepared people make sub-optimal decisions for themselves when other people know better is immoral. As with most of my one on one arguments I have with people, I left it at that. When I argue face to face with real people, I have long ago given up trying to change their minds and generally settle for being clear where our premises diverge.
I am reminded of all this reading Bruce McQuain's take on Sarah Conly's most recent attempt to justify coercive paternalism (the latter is not an unfair title I have saddled her with -- it's from her last book). Reading this I had a couple of other specific thoughts
I don't know how I got onto blogging all Steven Rattner, all the time, but here I go again. Mr. Rattner is complaining that the sequester is costing his son a chance at a government internship for which he had wanted to apply.
So perhaps Mr. Rattner's son could go work in a productive field instead? Oops, probably not, because rising minimum wages and Obama Administration crack-downs on unpaid private internships have made it harder for all the rest of us to get our little preciouses an internship. I will bet any amount of money that the number of internships killed by minimum wage laws is at least two orders of magnitude larger than the number of internships killed by the sequester.
And besides, we should be thrilled that one less young person is having their formative organizational experiences (from conflict resolution to productivity expectations) in government.
Oh, and by the way, that bit about the Obama Administration cracking down on unpaid internships? Well, that only applies to you private employers who are teaching useless skills like innovation and wealth creation. Jobs that teach Congress's organizational and productivity secrets don't have to be paid because of all the valuable lessons taught.
Last week, I noted a piece by Steve Rattner who was horrified that individual investors, empowered by companies like Kickstarter, might one day be able to invest in startups without paying a fee to Goldman Sachs.
I noted that Mr. Rattner's concern for investors seemed to be coming rather late, given that "he was the primary architect of the extra-legal screwing of GM and Chrysler secured creditors in favor of the UAW and other Obama supporters."
The administration has treated obstacles to its agenda with ruthless tactics. In April 2009, that agenda was to hand an outsized, 55 percent majority interest of embattled Chrysler to the United Auto Workers in a government-orchestrated bankruptcy. But by law secured creditors are first in line in bankruptcy, and bondholders — representing their working-class pension clients — refused to accept Obama's unfair deal for a measly 29 cents on their investment dollar.
Send in the muscle.
"One of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight," said Tom Lauria, lawyer for Perella Weinberg investment firm, on Frank Beckmann's Detroit radio program. Lauria later said the brass knuckles belonged to White House Auto Task Force leader Steve Rattner. Lauria's account was disturbing, too, in revealing the confidence that the White House has in its press allies to aid Obama's agenda. Sure enough, Washington reporters quickly attacked the messenger. "(Lauria's) charge is completely untrue," White House deputy press secretary Bill Burton told ABC News' Jake Tapper, "and there's obviously no evidence to suggest that this happened in any way." Actually, there was plenty of evidence. Jim Carney of Business Insider corroborated Lauria's account, reporting that "sources familiar with the matter say that other firms felt they were threatened as well." The White House escalated the threats when Obama himself singled out creditors for obstruction, accusing them of being "speculators" preying on an American auto icon — bullying words from a man with the IRS and SEC at his disposal.
"The sources, who represent creditors to Chrysler, say they were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler," continued the Insider. "One person described the administration as the most shocking 'end justifies the means' group they have ever encountered."...
"The president's attempted diktat takes money from bondholders and gives it to a labor union that delivers money and votes for him," wrote Cliff Asness, a managing partner at AQR Capital Management. "Shaking down lenders for the benefit of political donors is recycled corruption and abuse of power."
Courtesy of a reader, what happens when the sequester cuts maintenance funding for critical infrastructure?
This is an older video that someone has re-purposed, I think, to make fun of progressives but it is funny none-the-less. It reminds me of the movie Live Free or Die Hard, when the villain sent all of America into a panic because the government might not be immediately available to help with every little thing.
Kevin Drum quoted this from James Fallows in a post labelled "threat inflation"
As I think about it this war and others the U.S. has contemplated or entered during my conscious life, I realize how strong is the recurrent pattern of threat inflation. Exactly once in the post-WW II era has the real threat been more ominous than officially portrayed
I thought, "wow, someone from the Coke or the Pepsi party is finally going to call BS on all the apocalyptic forecasts from both parties over the sequester." But alas, he was just discussing foreign policy. That is not to say I don't agree with the basic point, that foreign policy prescriptions are often accompanied by exaggerated horror stories of imminent threats -- I just wish they would recognize the same dynamic on the domestic front, whenever the smallest cut in government spending growth rates suddenly mean we are are going to put grandma out on an ice flow to freeze.
The extent to which the media is aiding and abetting, with absolutely no skepticism, the sky-is-falling sequester reaction of pro-big-government forces is just sickening. I have never seen so many absurd numbers published so credulously by so much of the media. Reporters who are often completely unwilling to accept any complaints from corporations as valid when it comes to over-taxation or over-regulation are willing to print their sequester complaints without a whiff of challenge. Case in point, from here in AZ. This is a "news" article in our main Phoenix paper:
Arizona stands to lose nearly 49,200 jobs and as much as $4.9 billion in gross state product this year if deep automatic spending cuts go into effect Friday, and the bulk of the jobs and lost production would be carved from the defense industry.
Virtually all programs, training and building projects at the state’s military bases would be downgraded, weakening the armed forces’ defense capabilities, according to military spokesmen.
“It’s devastating and it’s outrageous and it’s shameful,” U.S. Sen. John McCain told about 200 people during a recent town-hall meeting in Phoenix.
“It’s disgraceful, and it’s going to happen. And it’s going to harm Arizona’s economy dramatically,” McCain said.
Estimates vary on the precise number of jobs at stake in Arizona, but there’s wide agreement that more than a year of political posturing on sequestration in Washington will leave deep economic ruts in Arizona.
Not a single person who is skeptical of these estimates is quoted in the entirety of the article. The entire incremental cut of the sequester in discretionary spending this year is, from page 11 of the most recent CBO report, about $35 billion (larger numbers you may have seen around 70-80 billion include dollars that were going away anyway, sequester or not, which just shows the corruption of this process and the reporting on it.)
Dividing this up based on GDP, about 1/18th of this cut would apply to Arizona, giving AZ a cut in Federal spending of around $2 billion. It takes a heroic multiplier to get from that to $4.9 billion in GDP loss. Its amazing to me that Republicans assume multipliers less than 1 for all government spending, except for defense (and sports stadiums) which magically take on multipliers of 2+.
Update: I wrote the following letter to the Editor today:
I was amazed that in Paul Giblin’s February 26 article on looming sequester cuts [“Arizona Defense Industry, Bases Would Bear Brunt Of Spending Cuts”], he was able to write 38 paragraphs and yet could not find space to hear from a single person exercising even a shred of skepticism about these doom and gloom forecasts.
The sequester rhetoric that Giblin credulously parrots is part of a game that has been played for decades, with government agencies and large corporations that supply them swearing that even trivial cuts will devastate the economy. They reinforce this sky-is-falling message by threatening to cut all the most, rather than least, visible and important tasks and programs in order to scare the public into reversing the cuts. The ugliness of this process is made worse by the hypocrisy of Republicans, who suddenly become hard core Keynesians when it comes to spending on military.
It is a corrupt, yet predictable, game, and it is disappointing to see the ArizonaRepublic playing along so eagerly.
WASHINGTON, D.C.///February 20, 2013///Sequestration will cut visitor access to the rim of the Grand Canyon, significantly delay the spring opening of key portions of Yellowstone and Yosemite, reduce emergency response help for drivers in the Great Smoky Mountains, limit access to the beach at the Cape Cod National Seashore, and impair the experiences in many other ways for millions of visitors at America’s national parks. In addition, local, regional and state economies that depend on national parks will take huge hits as visitors are either turned away or skip visits due to the impact of the mindless sequestration budget cuts.....
CNPSR Spokesperson, Joan Anzelmo, former Superintendent of Colorado National Monument said: “Congress might just as well put a big “Keep Out !” sign at the entrance to Yellowstone, Grand Canyon, Yosemite, the Cape Cod Seashore, and every other iconic national park in the U.S. This foolhardy path tarnishes America’s ‘crown jewels’ and is a repudiation of the nation’s national parks often touted as ‘America’s best idea’. Millions of Americans depend on national parks for their vacations and livelihood. Those Americans are being told that national parks don’t count … that people who use national parks don’t count … and that people who live and work near national parks don’t count.”
A few observations:
I am currently as depressed and cynical as I have ever been today due to this absurd reaction to a trivial spending cut. I have about zero hope that Federal spending will ever be reigned in. Politicians of both parties and the special interests that support them will spend and spend until we find ourselves calling Greece asking for a bailout.
If the Republicans are supposed to be the voice of fiscal responsibility in Washington, then we are doomed. They are absolutely as bad as Obama, running around in panic that the trivial cuts required by the sequester (not 8% this year or 5% or even 2% but 1% of Federal spending). I have never seen a private organization with a large administrative staff that could not take a 5% reduction and generally be better off for it. I absolutely guarantee that I could take 5% or more off the top of every agency's budget and you would never notice it.
This includes the military. In fact, this includes the military in particular. The military is never asked to prioritize. We still have armored divisions in Germany. It is always incredible to me that Republicans, who doubt that the government can ever manage or spend wisely, suddenly cast aside all these doubts when it comes to the military. I understand the honor that folks accord to front-line soldiers vs., say, DMV workers. But they are not the ones spending the money. I am tired of such honor for the troops being used to bait and switch me from a very reasonable focus on DOD spending and waste.
When it comes to the military, Republicans use the same "closing the Washington Monument" tactics that Democrats use for social programs, essentially claiming that a 5% (or 1%) spending cut will result in the cessation of whatever activity taxpayers most want to see continue. This process of offering up the most, rather than the least, important uses of money when spending cuts are proposed as a tactic to avoid spending cuts is one of the most corrupt practices imaginable. No corporate CEO would tolerate it of his managers for a micro-second.
About two years ago at Forbes I imagined a hypothetical budget discussion at a corporation that followed Congressional budgeting practices.
In today's history lesson, we have something called the "Addled Parliament." Surely that cannot be a good name to have, and in fact the name was given as a term of derision, very like how the Left describes the current Congress as obstructionist and ineffectual.
So why did it gain the name "addled"? It turns out, for about the same reasons the current Congress comes under derision from Obama: It did not give the King all the money he wanted. Via Wikipedia:
The Addled Parliament was the second Parliament of England of the reign of James I of England (following his 1604-11 Parliament), which sat between 5 April and 7 June 1614. Its name alludes to its ineffectiveness: it lasted no more than eight weeks and failed to resolve the conflict between the king, who wished to raise money in the form of a 'Benevolence', a grant of £65,000 and the House of Commons (who were resisting further taxation). It was dissolved by the king.
Parliament also saw no reason for a further grant. They had agreed to raise £200,000 per annum as part of the Great Contract and as the war with Spain had reached its resolution with the 1604 Treaty of London, they saw the King's continued financial deficit as a result of his extravagance (especially on Scottish favourites such as Robert Carr) and saw no justification for continued high spending.
Moreover there remained the continuing hostility as a result of the kings move of setting impositions without consulting Parliament.
Wow, none of that sounds familiar, huh? In fact, James was an awful spendthrift. Henry the VII was fiscally prudent. Henry the VIII was a train wreck. Elizabeth was a cheapskate but got into expensive wars, particularly in her declining years, and handed out too many government monopolies to court favorites. But James came in and bested the whole lot, tripling Elizabeth's war time spending in peace time, mainly to lavish wealth on family and court favorites, and running up debt over 3x annual government receipts. History, I think, pretty clearly tells us that Parliament was absolutely correct to challenge James on spending and taxes, and given that it took another century, a civil war, a Glorious Revolution, a regal head removal, and a lot of other light and noise to finally sort this issue out, it should not be surprising that this pioneering Parliament failed. Yet we call it "addled".
I am sick and tired of politicians impugning the ethics of private individuals engaged in commerce. There are certainly a small minority of fraudsters in the world of business, but there is a supermajority of unethical people in Congress, arguably approaching 100%.
My latest evidence for such is this article in the Washington Post about the ethical bankruptcy of the Federal budgeting process. It is impossible to excerpt, but here is a representative example:
At the Census Bureau, officials got credit for a whopping $6 billion cut, simply for obeying the calendar. They promised not to hold the expensive 2010 census again in 2011.
By law, the next census is not until 2020. There was never, ever going to be a census in 2011. But Congress claimed $6 billion in savings for not having one none-the-less. Here is more:
In the real world, in fact, many of their “cuts” cut nothing at all. The Transportation Department got credit for “cutting” a $280 million tunnel that had been canceled six months earlier. It also “cut” a $375,000 road project that had been created by a legislative typo, on a road that did not exist....
Today, an examination of 12 of the largest cuts shows that, thanks in part to these gimmicks, federal agencies absorbed $23 billion in reductions without losing a single employee.
You can impugn business ethics all you want, and I can add a few stories to yours, but I have worked at fairly senior positions in two Fortune 50 companies and as a worker bee in a third, and in all three it would be a firing offense to engage in this kind of Charlatanism.
Kevin Drum, looking at this chart...
Republicans like to say we have a spending problem, not a taxing problem, but the evidence doesn't back that up. Total government spending didn't go up much during the Clinton era, and it's actually declined during the Obama era. In the last two decades, it's only gone up significantly during the Bush era, the same era in which taxes were cut dramatically.
I have several comments about this craziness, but I need to preface it with an observation, an observation that I presume my readers have already figured out, unlike the willfully blind of the reality-based community. This is the total of all government spending at all levels, not just Federal. In fact, had he shown Federal spending (likely more appropriate given he is trying to draw conclusions about Presidents), the numbers would have continued up over the last few years. Only a substantial decline in state and local spending has offset the increase in Federal per capital spending. Which leads us to a few conclusions, starting with the most obvious:
Update: Drum responds to others making similar arguments here. He modifies the chart to include just federal per capital spending, and unsurprisingly, it is up steeply in the first year of Obama's Presidency but flatish (not down) after that. Drum draws the conclusion that Obama's spending is OK because Bush's was worse. Huh? This is the bizarre tu quoque team politics game that drives me insane. Bush sucked on spending. Bush with a Democratic Congress in his last years sucked worse. Obama has sucked. None of this somehow proves spending is not a problem.
His chart says this: Real (meaning adjusted for inflation) per capita (meaning adjusted for population growth) Federal spending is up something like 47% in the last 10 years. Anyone feel like they are getting 47% more value?
In this case, the USDA imposed on the [raisin farming] Hornes a “marketing order” demanding that they turn over 47% of their crop without compensation. The order—a much-criticized New Deal relic—forces raisin “handlers” to reserve a certain percentage of their crop “for the account” of the government-backed Raisin Administrative Committee, enabling the government to control the supply and price of raisins on the market. The RAC then either sells the raisins or simply gives them away to noncompetitive markets—such as federal agencies, charities, and foreign governments—with the proceeds going toward the RAC’s administration costs.
I have seen estimates that a Medieval serf had to pay between 30 and 70 percent of his crop to his master. The RAC seems to be right in line with these numbers.
Here is a recent example of the sorts of ways that this success has been enabled. Rather than entirely depending on the political process to get things done, environmental advocacy groups, recreation groups, conservation groups and private interests have frequently put their money where their mouths are and taken up the role of conservation themselves. Private landowners on a famous canoe carry to Raquette Lake around the Marion River rapids were planning on selling property for development purposes (why is another story). Rather than use the town zoning thugs or some obscure environmental law to prevent the sale and development, concerned groups who claimed the land was more valuable in recreation use took it upon themselves to purchase the land and keep it in its natural state:
The Open Space Institute has acquired the historic Marion River canoe carry and 295 surrounding acres in Hamilton County. There has been concern about preserving access to the canoe carry in recent years, after the owner announced plans to build several homes along Utowana Lake. The acquisition will ensure the carry remains open to the public.
“The potential for development made the Marion River Carry a higher, more immediate priority for conservation,” said Kim Elliman, president and CEO of the private non-profi t land preservation organization.
The OSI is paying $2 million for the land …
A couple of months ago a local resident was going to tear down a Frank Lloyd Wright house for development. Outrage poured from all quarters of this town that was once Wright's winter residence. We have got to stop this! So seemingly everyone in the area rushed to the city council to force this guy to keep his house intact.
I am a fan of the old master, though I also think (gasp!) he built a lot of crap, too. I personally would never live in one of his houses. Not even Falling Water, which is beautiful but not very liveable (and FLW definitely had a bias against tall people).
My argument all along was, well, if this house's continued existence is so valuable to so many people, why don't you buy it? After all, shouldn't the people who value the house pay for the cost, including the opportunity cost, of its preservation? Why should this guy who does not value the house be forced to bear a lot of the cost of its preservation? Most people looked at me as if I was from Mars.
Eventually, someone who wanted to preserve the house made an offer for $2 million. The buyer rejected it as less than what he would make from development. Everyone went nuts again - they said the $2 million was more than the owner paid for the house, he should accept it. Why? He's held this house through the downturn and born the holding costs to make a profit, not just get his money back. If supporters can't come up with another half million, is it really worth saving?
I actually missed the ultimate resolution. A few weeks ago the city council was gearing up to "protect" the house, meaning that supporters could have the house without actually paying for it, a sort of eminent domain seizure this guy likely will never be compensated for.
PS- I love FLW's theaters. He had a home theater in Taliesen West where all the chairs are skewed facing a bit right of the screen. He observed people like to put their legs off to the side when they face the screen and tilt at the waist a bit. He built the theater to match this position. It is a very comfortable way to watch a film. ASU's Gammage auditorium, originally designed for Bagdad I think, is not very attractive from the outside but is an incredibly comfortable place to see a show. It has the widest spacing between rows of seats I have ever seen in a theater. You do not have to stand up for people to move down the aisle. Acoustics there are not great, but a lot of auditoriums of that era screwed up their acoustics. LOL, until a recent renovation it had about 2 women's bathroom stalls for the whole place. The lines for the women's room were the worst I have ever seen. My son and I used to sing a song there (to the tune of the Village People's YMCA): "I'm glad I have a Y chromosome...." I wonder if this was due to the original specs being from Iran?
I couldn't resist clicking through to this article supposedly laying out a "trend" that increasing numbers of women were finding "sugar daddies" to pay for college. I was considering an article calling BS on the whole trend when my attention was diverted. I found the best single-statement illustration of the attitude that is bankrupting this nation. First, the basic story:
Nearly 300 NYU co-eds joined the site’s service last year seeking a “mutually beneficial” arrangement with rich older men — a 154 percent jump over 2011.
It was the second-highest number of new members for any college in the country.
Hundreds more young women from Columbia, Cornell and Syracuse universities also have recently signed up for the service, the site said.“I’ll admit that I’ve thought about doing something like that,” said a Columbia junior who gave only her first name, Karen.
“It would be easier in some ways than working, taking classes and then spending years paying back loans.”
The writer is obviously trying to get me to be outraged, but all I can do is shrug. There are a lot of worse things in the world to worry about than people entering into "mutually beneficial relationships." But this is the line that stopped me short:
“Clearly, we need more financial aid if those are the lengths people are going to pay for school,” sniffed Ashley Thaxton, 20, an NYU theater major.
God, is there ever going to be a non-problem that doesn't require more government spending. How about lowering tuition? Cutting back on bloated administrative staffs? Eliminating useless academic departments? Channeling less money to the football team? Or how about we just accept that some people make personal choices that might be distasteful to us, but are really their own god damned business.