Archive for the ‘Government’ Category.

I Still Don't Understand Why Progressives Blindly Support Public Employee Unions

I have asked this question before:

Taking the government's current size and tax base as a given, is there a segment of the progressive community that gets uncomfortable with the proportion of these resources that are channeled into government employee hands rather than into actual services for the public?

I don't think this is an unfair question.  People ask lots of unfair questions in politics that try to impose the questioner's assumptions and worldview on the respondent (You want open immigration?  Don't you care about terrorism?  You don't want a $15 minimum wage?  Don't you care about the poor?)  But I am honestly trying to ask this of Progressives from the Progressive worldview -- Increasingly privileged government workers, who typically make more in pay in benefits for less work than the rest of us, are claiming for themselves so many of the resources of the government that services and programs Progressives favor are being cut back.  In the Progressive oppressor-oppressed model, how does $100,000 pensions for government workers get prioritized over homeless shelters?

Here is another example:

We have written frequently over the past couple of weeks about the disastrous public pension funds in Kentucky that are anywhere from $42 - $84 billion underfunded, depending on which discount rate you feel inclined to use. As we've argued before, these pensions, like the ones in Illinois and other states, are so hopelessly underfunded that they haven't a prayer of ever again being made whole.

That said, logic and math have never before stopped pissed off teachers and/or clueless legislators from throwing good money after bad in an effort to 'kick the can down the road' on their pension crises. As such, it should come as no surprise at all that the Lexington Herald Leader reported today that Kentucky's 365,000 teachers and other public employees are now demanding that taxpayers contribute a staggering $5.4 billion to their insolvent ponzi schemes over the next two years alone. To put that number in perspective, $5.4 billion is roughly $3,200 for each household in the state of Kentucky and 25% of the state's entire budget over a two-year period.

I Was Not Happy About Trump's Pardon of Joe Arpaio, But This Court Challenge Seems Nuts

I can only guess that the article does a poor job of describing the plaintiffs' argument.  Because the argument that the pardon power impinges on the separation of powers, presumably because it voids a judicial ruling, would be true of any pardon in all of history.  The Constitution seems to be pretty open-ended in granting this power.  As much as it is heartening to see Democratic Congresspersons suddenly develop a concern about Constitutional limits on government power, this seems like a big waste of time and money.

A slate of congressional Democrats is asking a federal judge to invalidate former Sheriff Joe Arpaio's presidential pardon and move forward with sentencing.

Attorneys for 33 members of the U.S. House of Representatives aired their concerns in a "friend of the court" brief filed in federal court on Wednesday morning.

The brief argued that U.S. District Judge Susan Bolton should toss President Donald Trump's pardon of Arpaio, 85, in the interest of protecting the government's division of powers.

"The presidential pardon upon which that motion is based is an encroachment by the Executive on the independence of the Judiciary," the document stated. "The amici urge the Court to defend jealously against that encroachment as the framers intended."

Woah! You Mean Illegal Activity That We Never Punish is Still Occurring?

Democrats are having fun noting the hypocrisy (after all the focus in the last election on Hillary's email practices) of Trump Administration members doing official business via personal email.  I will leave them to their fun.**

But I will note that I am a huge supporter of FOIA and government transparency and from the very beginning I criticized Hillary Clinton's use of private email primarily because it was clearly done to evade government transparency laws.  We did not punish her for obvious violations, and we did not punish Gina McCarthy when she used private email as the head of the EPA to avoid public scrutiny of her contacts with environmental lobbying groups.  So we should not be surprised if lots of other people are doing the same thing.  Politicians would love to sweep all their private conversations under the rug if we let them.  We need to start charging people for this crime -- even one high-profile person to start pour encourager les autres would be a start.

 

** This is an example of the good side of partisanship -- someone is always in opposition.  Engadget never did a single article on Gina McCarthy or other Obama Administration officials evading FOIA through private email accounts, presumably because it was much more sympathetic to that administration.  But it does not like Trump so it is on the case.  Which is fine-- the watchdogs across administrations don't always have to be the same people, they just need to be there.

 

Cutting the Resources Without Cutting the Work

When I was at consultant McKinsey & Co, one of their philosophies in doing cost reduction studies was that you don't cut staffing without first cutting back the work.  Identify the activities that don't need to be done or can be streamlined, change the processes to match, and then cut staffing.

This, of course, is not the way it usually happens, even in good companies.  Most companies just whack staff counts by some percentage, perhaps across the board and perhaps weighted by intuitions as to where the company is fat.  In a good company with good managers and good incentives, the organization can generally be trusted to cut back on the least useful activities in response to the staff cuts.  But in bad organizations with poor incentives, one has no idea if high value or low value activities are being cut.  And in the government, you can almost be assured that when staff and budgets are cut, low-value activities are preserved while high-value core mission activities are cut.  In my world of public parks, staff cuts almost always lead to preservation of bloated headquarters staff while maintenance budgets and staff actually service visitors in parks is slashed.

And then there is this on new rules being imposed by the Trump Administration on NEPA.   If you want to know why infrastructure projects almost never get started and public lands are seldom improved, NEPA is a big part of the reason.  It is something that is desperately in need of reform.  But the Trump Administration appears to be making the same mistake I discussed above, cutting resources without cutting the work required:

Yesterday Greenwire ran a story about how one of the new political appointees at the Department of the Interior issued a memo requiring that National Environmental Policy Act (NEPA) studies (those Environmental Impact Statements you hear so much about) be completed in one year, and be no more than 150 pages long.

If there were ever any doubts that the Trump Administration minions have absolutely no idea what they’re doing, this should put them to rest. Ostensibly intended to “streamline the regulatory process”, blah, blah, blah, its effect will be precisely the opposite; this one memo will delay and stop more projects than anything the environmental community has ever come up with. The activists may be livid, but I promise you that their lawyers are going, “Yee-ha!” I certainly would be if I were still doing NEPA cases.

The NEPA and the hundreds of court decisions interpreting it are painfully clear on how detailed an EIS has to be. Putting artificial and arbitrary limits on an EIS will make it so much easier to show how the EIS does not “take a hard look at the environmental consequences,” contain “a detailed statement of any adverse environmental effects” of a proposed project, etc.

My Open Question to Progressives Is Still Open

A while back I asked progressives:

Taking the government's current size and tax base as a given, is there a segment of the progressive community that gets uncomfortable with the proportion of these resources that are channeled into government employee hands rather than into actual services for the public?

No response to date.  This is not a rhetorical question.  I am honestly curious if progressives worry about the percentage of government budgets that go to government workers, or if there is a progressive argument for this (despite the fact that it seems to be starving the actual programs progressives support).

I was reminded of this when I read this article from Steven Greenhut:  (hat tip maggies farm and their links roundup)

Municipal governments exist to provide essential services, such as law enforcement, firefighting, parks and recreation, street repairs and programs for the poor and homeless. But as pension, health-care and other compensation costs soar for workers and retirees alike, local governments are struggling to fulfill these basic functions.

There's even a term to describe that situation. "Service insolvency" is when localities have enough money to pay their bills, but not enough left over to provide adequate public service. These governments are not insolvent per se, but there's little they can afford beyond paying the salaries and benefits of their workers.

As a city manager quoted in a newspaper article once quipped, California cities have become pension providers that offer a few public services on the side. It's a sad state of affairs when local governments exist to do little more than pay the people who work for them.

Not surprisingly, the union-dominated California state legislature has been of little help to local officials dealing with such fiscal troubles. The state pension systems have run up unfunded liabilities, or debts, ranging from $374 billion to $1 trillion (depending on the financial assumptions one makes). But legislators have ignored meaningful pension reform. This has forced local governments to cut back services or raise taxes to meet their ever-increasing payments to California's pension funds.

It's one thing to ignore the plight of hard-pressed cities and counties, but now legislators are trying to make the problem a lot worse. Assembly Bill 1250 would essentially stop county governments from outsourcing personal services (financial, economic, accounting, engineering, legal, etc.), which is a prime way counties make ends meet these days.

 

Public Choice and "Privilege"

A key thrust of Nancy MacLean's book on the great Koch / Buchanan / libertarian conspiracy to destroy democracy is that public choice theory is all about protecting and cementing elite privilege under the law.  This is actually exactly opposite of how I have always viewed public choice theory -- public choice theory tends to show how well-intentioned "public service" programs tend to get co-opted by a few powerful people for their own benefit.  See "ethanol mandates" or "steel tariffs" or "beautician licensing" or any number of other programs.  But I am not conversant enough to really make this case well.  Fortunately, Steven Horwitz (pdf) has done it in his powerful critique of MacLean's book.

The intellectual error that is most frustrating, however, is her understanding of the relationship between public choice theory and questions of power and privilege. As Munger (2018) points out in his review, MacLean is an unreconstructed majoritarian. She genuinely believes, at least in this book, that the majority should always be able to enact its preferences and that constitutional constraints on majority rule are ways of protecting the power and privilege of wealthy white males. That’s the source of Democracy in Chains as her title and her argument that public choice theory is a tool of the powerful elite. As Munger also observes, normally such a view would be seen as a strawman as no serious political scientist believes it, not to mention that no democracy in the world lacks constitutional constraints on majorities. In addition, one must presume that a progressive like MacLean thinks Loving v. Virginia, Roe v. Wade, and  Obergefell v. Hodges, not to mention Brown, were all decided correctly, even though all of them put local democracies in chains, and in some cases, thwarted the expressed preferences of a majority of Americans.

For public choice theory, constitutions protect the citizens from two forms of tyranny: tyrannies of the majority when they wish to violate rights and tyrannies of coalitions of minorities who wish to use the state to redirect resources to themselves by taking advantage of the logic of concentrated benefits and diffuse costs. Buchanan’s political vision is, in Peter Boettke’s words, a world without discrimination and domination. Constitutional constraints, for Buchanan, are a central way of ensuring that democracy actually protects rights by preventing the powerful from exploiting the powerless and that political decisions involve the consent of all. Constitutional constraints make democracy work for all citizens – they do not put it in chains.

When MacLean argues that public choice is a tool to protect privilege, she gets it exactly backward. Public choice shows us how those with the power to influence the political process can use that power to create and protect privilege for themselves at the expense of the rest of the citizenry. Public choice’s analysis of rent-seeking and politics as exchange enables us to strip off the mask of bogus “public interest” explanations and see a great deal of political activity as socially destructive exploitation of the least well-off. To borrow a bit from the left’s rhetoric: public choice is better seen as a tool of resistance to oligarchy than a defense thereof. It helps us understand why corporate welfare remains so common even as so many see it as a problem. Public choice also helps to understand the growth of the military-industrial complex and challenges public interest explanations of that growth. One can tell similar stories about immigration policy and a number of other issues of that concern modern progressives. Public choice theory sees the battles over Uber and Lyft as the powerful government-licensed taxi companies fighting to protect their monopoly privileges and profits against upstart entrepreneurs better meeting the wants of the public. This provides an excellent illustration of how public choice theory can explain political outcomes, and why the theory is useful in understanding how the powerful can victimize the less powerful. Public choice theory, properly understood, is a tool of critical thinking that enables us to deconstruct political rhetoric to see the underlying forces at work that are allowing those with wealth and access to power to use politics to acquire and protect their privileges and profits

As Arnold Kling might say, and Horowitz himself posits in different words, libertarians spend so much time obsessing over the freedom-coercion political axis that they miss out on ways to engage those on the Oppressor-Oppressed axis.  Public choice theory has a lot to offer Progressives, as it explains a lot about how well-meaning legislation with progressive intent is often co-opted by powerful groups to enrich themselves.  Sure a lot of public choice theory is used by libertarians to say, essentially, burn the whole government to the ground; but there is a lot from my experience in public choice literature that should speak to good government progressives, academic work using public choice to think about better designing programs to more closely achieve their objectives.

Blue State Governance: Illinois Needs A Half Year of Taxes Just to Pay Late Bills

Per the WSJ:

This is what happens when a major American state lets its bills stack up for two years.

Hospitals, doctors and dentists don’t get paid for hundreds of millions of dollars of patient care. Social-service agencies help fewer people. Public universities and the towns that surround them suffer. The state’s bond rating falls to near junk status. People move out.

A standoff in Illinois between Republican Governor Bruce Rauner and Democratic Speaker of the House Michael Madigan over spending and term limits has left Illinois without a budget for two years. State workers and some others are still getting paid because of court orders and other stopgap measures, but bills for many others are piling up.

...Susana Mendoza, the state’s Democratic comptroller, is in charge of doling out limited funds to organizations demanding payment—a job she likens to handing out crumbs to starving children. She predicted unpaid bills will soon top $16 billion. “It is almost hard to say those numbers out loud because they seem so insane, but that’s where we are right now,” she says.

For reference, the entire tax revenue of the state of Illinois is just $32 billion a year, so even if the government were to close tomorrow and fire everyone, it would still take 6 months of taxes to just catch up on the bills.  And you can bet this does not include the most common form of borrowing done by most government agencies -- deferred maintenance.  Pretty much every government agency in the country at every level of government does not fully fund the maintenance of its capital assets (from parks to school buildings) preferring instead to fund the maximum salaries and retirement benefits for the maximum number of headquarters staff.

By the way, you may notice at the budget link that the proposed budget still calls for $6 to $7 billion a year in deficit spending, and does not include any provision for catching up on Illinois's sky-high $130 billion in unfunded retirement benefits (a number that represents a full 4 years of tax revenues).  Illinois is functionally bankrupt, and the only good news is that Illinois favorite son Barack Obama is no longer in the White House to bail them out.

Coke and Pepsi Healthcare Reform -- It's All About the Credit

Over the last several years, when the successes and failures of the PPACA/Obamacare/Health Care reform entirely accrued to Democrats, the Republicans fought against market stabilization funds as unwarranted subsidies for insurance companies.  My understanding is that the original PPACA included a market stabilization method, but it was written as being revenue neutral - ie funds from insurers who had healthier than average subscriber pools would be transferred to insurers who had sicker subscribers.  But soon, all insurers were losing money and premiums were rising and insurers were dropping out of the exchanges.  So President Obama transferred money from other sources to give extra market stabilization funds, e.g. subsidies, to insurers.  Republicans fought this action in the courts.  There was a principled position that Obama's actions were not legal, but Republicans were also happy to see the PPACA failing.  If Democrats in Congress could have made any one change to the PPACA last year, it likely would have been to increase these stabilization or subsidy funds, which I presume the Republicans would have fought.

Now, it is clear the public and the media is going to hang any future PPACA problems around Republican necks.  Whether this is fair or not is almost irrelevant -- one can see from Republican actions that they feel this to be true, at least in the Senate.  Because now Republicans are proposing market stabilization subsidies that are likely higher than Democrats would have even dreamed of asking for:

When the Congressional Budget Office (CBO) releases its estimate of Senate Republicans’ Obamacare discussion draft this week, it will undoubtedly state that the bill will lower health insurance premiums. A whopping $65 billion in payments to insurers over the next three years virtually guarantees this over the short-term.

Indeed, Senate Republican staff have reportedly been telling members of Congress that the bill is designed to lower premiums between now and the 2020 election—hence the massive amounts of money for plan years through 2021, whose premiums will be announced in the heat of the next presidential campaign....

Section 106 of the bill creates two separate “stability funds,” one giving payments directly to insurers to “stabilize” state insurance markets, and the second giving money to states to improve their insurance markets or health care systems. The insurer stability fund contains $50 billion—$15 billion for each of calendar years 2018 and 2019, and $10 billion for each of calendar years 2020 and 2021. The fund for state innovation contains $62 billion, covering calendar years 2019 through 2026.

This goes against pretty much all of the principled reasons Republicans opposed Obamacare in the first place, but given the choice of following principle or using our tax money to help buy another couple years in power, both parties will always make the second choice.  Of course, being given all that they would have wanted last year, the Democrats will likely not sign on for this as they don't want to bail Republicans out any more than Republicans wanted to bail Democrats out.

Examples of Why Government Infrastructure Projects Are So Hard To Get Done

As most of you know, my company operates public recreation facilities for a variety of public agencies under concession contracts.  These contracts are mostly similar to each other in their structure, but one key difference among them is the contract length -- we have both short-term contracts of say 5 years and long-term contracts up to 30 years.  When we have longer-term contracts, we are expected to do all the maintenance, even capital maintenance such as repaving roads and replacing roofs (more on that approach here).  The US Forest Service tends to prefer much shorter contracts where they retain responsibility for capital maintenance -- this tends to work out as we pay a higher concession fee on these (since we have fewer expenses) and the Forest Service has a process to use the concession fee to perform capital maintenance.  In fact, generally the FS asks us to do the maintenance because it is way easier for us to get it started (avoids the government contracting processes) and then we get credit for our costs against the fees we owe.

Anyway, I have a fair amount of experience with performing small to medium-sized infrastructure projects on public lands.  Here are a few examples, starting from the sublime and proceeding to the ridiculous, of projects we have not been able to proceed with and why.  In all these examples, my company was going to fund the project so availability of funds was not an issue.

  • In TN, we had already begun an expansion to add more campsites to an existing campground, a project already approved by our government landlord.  A disgruntled ex-employee, on his way out, claimed we had disturbed a rock pile and he thought the rock pile was some sort of Native American artifact.  Despite the fact there was no evidence for this, and that the construction was no where near the rock pile, construction was halted and my contractor had to go home while an investigation was begun.  As we speak, scores of acres surrounding the campground have been put off-limits to development until the rock pile is thoroughly studied, but of course no funding currently exists to study the rock pile so it is not clear how long this will take.  I am proceeding internally on the assumption that we will never be given permission and am cutting losses on materials bought for the project.
  • In AZ, we operated a snow play area in what was essentially a gravel pit.  The slopes we used were what was left from years of mining gravel, and essentially the whole area had been disturbed.  We wanted to add a real bathroom to replace scores of portable toilets and to bring power to the area rather than use generators.  All the work would be performed on already disturbed land in the gravel pit.  We were told we could not proceed without a NEPA (National Environmental Policy Act) study to assess environmental impacts of the work, which could easily take years or longer if its results got tied up in the courts, as they often do.  Since the government had no money or manpower to do the NEPA study, it was pointless to even try to proceed.  This year, without the ability to construct necessary facilities for visitors, we exited the concession contract and the Forest Service has not be successful yet in finding anyone else to reopen it.
  • In CA, just this week, I was discussing two maintenance projects with the government in a series of campgrounds we run near the Owens Valley.  In one, we wanted to dig up a water line that runs under a dirt road to repair a leak.  In the second, we desperately needed to replace some leaky roofs on bathrooms.  Both projects are now delayed.  In the case of the water line, digging up the road was going to require an archaeological study - yes, any digging basically requires such a study, and there is no exception for utterly absurd situations like this.  We eventually decided to open the campground without water this year, to the detriment of campers.  In the other case, the replacement of roofs on some old 1950's campground pit toilet buildings (think bathrooms at a highway rest area but not as nice) have to first be evaluated to make sure they are not historic buildings that should be protected.  Since this is a safety issue, I used up my favors on this one to try to get it to proceed.  In my experience, once a building in a park or campground has been labelled historic, that is pretty much its death sentence.  It becomes impossible to do any work on them and they simply fall apart.  For example, years ago there were some really neat old travel cabins in Slide Rock State Park in AZ.  I tried to get permission to fix them up and reopen them, but was told they were historic and they had to wait for special permissions and procedures and materials.  Today, the cabins are basically kindling, having fallen apart completely.

Recognize that these are projects entirely without NIMBY, funding, permitting, licensing, or procurement issues.  But they still face barriers from government rules.

Media Matters Provides A Great Reason to Defund Public Television

In response to PBS's airing of Andrew Coulson's pro-school-choice documentary, Brett Robertson of Media Matters writes:

Why would a public broadcast channel air a documentary that is produced by a right-wing think tank and funded by ultra-conservative donors, and that presents a single point of view without meaningful critique, all the while denigrating public education?

Well, if public funding means that PBS should not air anything critical of public institutions, its time to end the public funding.  Robertson simply confirms what critics have been saying for years, that public funding makes PBS an agent of the state, and there is not much we need less today than state-sponsored television**

 

** I will add that I watch way more PBS than the average person and donate to it every year.  I often don't agree with their editorial policy and if it really ticked me off enough I suppose I would stop donating.  My opposition to state funding of PBS has nothing to do with my enjoying its product.  Ironically, I actually think that it might be worse without state funding because I think the shaming about lack of balance that goes with the funding tends to put a small brake on its management's tendency to go hard Left.  But that is irrelevant to the principle that state-funded media is a bad idea.

Some Approaches to Reforming Congress and Its Budget Process

I thought this Megan McArdle interview of Yuval Levin explained a lot about how the Congressional budgeting process has gone off the rails.   It does not blame anyone as somehow guilty of being bad actors, but merely looks at shifting incentives for parties and legislators and how these have gotten us where we are.  One example:

The process began to decay in the mid-1990s, when something very important changed in Congress. After 40 years of Congress understanding itself as an institution run by Democrats, with Republicans exercising power by putting pressure on internal Democratic divisions (and making demands in return for giving votes to measures that couldn’t quite get enough Democrats), Republicans took control.

When Republicans took control, Congress didn’t settle into a new partisan pattern, but instead settled into a sense that control could switch with the next election -- always.

So it's not that Republicans failed to run the budget process, but that both parties started thinking very differently about Congress. Now, the minority party tends to think the imperative is to keep the majority from getting anything it wants, instead of making trades in order to get something from its own to-do list, because that list would be much easier to achieve after the next election if control changes hands. And the 1974 process is a poor fit for that set of incentives.

Evergreen Campaign Promises that are Always Broken

Some Conservatives are miffed that Trump is apparently not going to move the US Embassy in Israel to Tel Aviv

In March 2016, addressing the American Israel Public Affairs Committee conference, Donald Trump said that, as president, he would move the U.S. embassy in Israel to Jerusalem. Trump called that city “the eternal capital of the Jewish people.”

Now, however, President Trump has decided to keep our embassy in Tel Aviv. A senior White House official explained: “We don’t think it would be wise to [move] it at this time” because “we’re not looking to provoke anyone when everyone’s playing really nice.”

This promise to move the US Embassy in Israel is evergreen, and is always broken.  A similar promise by candidates such as Barack Obama to declare the Ottoman treatment of the Armenians to be genocide is another promise of symbolic action that is never actually implemented in office.  These mostly symbolic gestures are really powerful in campaigns, because they will tend to energize certain groups and make them more likely to vote for you.  But it turns out that each of these actions would tend to tick off unpredictable, scary, violent parties, the negative consequences of which might well outweigh the benefits of the gesture.  Even ignoring violence and irrationality, these actions impose an opportunity cost, likely limiting progress on other diplomatic fronts with these same parties.

This is why the vast majority of actual government actions reside in the lower left square in the framework below -- don't believe me?  Look at the legislative output from any particular session of Congress.  The vast majority of the actions taken are to declare some special day, a low-cost symbolic action meant to make some group feel warm towards some politician.

 

An Honest Question to Progressives: When Does the Proportion of Tax Money Claimed By Government Workers Get Too Large?

I have sent the following question to a number of Progressives. I have yet to hear anything back.

I have been following the story about UC possibly hiding funds as a sort of rainy day fund in accounts because several years ago I worked with a lot of folks (e.g. Ruth Coleman) at California State Parks who lost their jobs when accused of the same thing.  But looking at the story, the part that really appalled me was this from the auditor's report:

​The last few years UC has been begging and pleading for $50 or $100 million extra so they could enroll more in-state students, when the office of the president, if this is presented correctly, seems to be bloated by perhaps $400 million.  God knows what the administrative staffs of the individual universities look like.It appears what we have here is a conflict between more output of government services to the public, which I might call an ideological imperative of the Progressive left, with protection of government workers and their pay and benefits, which I might call a political imperative.

I am wondering if the Left's near absolute political support for government workers is undermining what I might call the good government impulses on the Left.  My involvement with CA politics is mostly in parks, but I know that there are a number of fundamental reforms that could allow the parks agency to do a lot more with their current budget, in fact perhaps even start getting at working down deferred maintenance logs, but these were torpedoed as non-starters because they would involve job losses and changes in work rules.  I am not saying they were discussed and defeated, I am saying they were stopped immediately as pointless to even discuss.

I don't agree with Progressives on the size and scope of government, but leave that aside.  Taking the government's current size and tax base as a given, is there a segment of the progressive community that gets uncomfortable with the proportion of these resources that are channeled into government employee hands rather than into actual services for the public?  Or is there a progressive argument for larger-than-needed government staff and higher-than-necessary pay and benefits (e.g. a city on the hill argument where the government is setting a higher standard that perhaps the benighted private employers will someday more closely emulate)?

The Staggering Administrative Bloat of Universities

This chart is from a recent state audit report of Janet Napolitano's office at the University of California, an audit I already wrote about here.

Obviously Napolitano's office is particularly bad as compared to peers, but she has 1667 staff and spends over a half billion (billion with a B) just on the office of the President!  This is not in any way shape or form the total administrative size of the system - each university has its own administrative staff, for example.  This is just her central office.  This is a staggering number.  It equates to every student in the system paying over $2500 a year just for the central headquarters staff that they will never see, this is before the first dollar is spent on their individual campus -- or God forbid -- on teaching or academics.  To my mind this is way more of a scandal than her hiding a money reserve in various accounts.

This begins to get at a conflict I keep expecting to happen, but doesn't.  Time and time again, particularly in places like California, we find examples where agencies that are supposed to be serving the public are in fact diverting much of their resources to maintain the staffing levels, salaries, and rich benefits and pensions of their employees.  For years I have expected some sort of civil war on the Left, where Progressives figure out that providing things they care about (e.g. education, parks) is being limited by the huge resources that are being diverted to government employees.  Just look at the chart above -- California Democrats have twisted themselves into knots trying to find an incremental $50 or $100 million of funding for the California public university system, and here it is -- I can see an easy $400 million one could easily pull out of Napolitano's office.  Unfortunately, government employees and their unions are a big force in electing Democrats, and so they are reluctant to challenge these folks.  It is a classic example of "do you care about the things you say you value or do you care about power" and so far in places like California the answer has been "power."

Janet Napolitano Could Be In Big Trouble

Audit shows Napolitano's office hiding funds from the legislature

The University of California hid a stash of $175 million in secret funds while its leaders requested more money from the state, an audit released on Tuesday said.

The San Francisco Chronicle reported that the audit found that the secret fund ballooned due to UC Office of the President overestimating how much is needed to run the school system that includes 10 campuses in the state. Janet Napolitano, the former Department of Homeland Security chief, is in charge of the school system.

Napolitano denied the audit’s claim. She reportedly said the money was held for any unexpected expenses. Her office also denied the amount in the fund.

Pretty much the entire management team of California Sate Parks got fired for doing almost the exact same thing, with the exact same excuses

California state parks Director Ruth Coleman resigned and her second-in-command was fired Friday after officials discovered the department has been sitting on "hidden assets" totalling [sic] nearly $54 million.

The money accumulated over 12 years in two special funds the department uses to collect revenue and pay for operations: $20.4 million in the Parks and Recreation Fund, and $33.5 million in the Off Highway Vehicle Trust Fund.

The money accumulated, state officials said, because the parks department had a pattern of under-reporting the actual size of the funds in its regular dealings with the state Department of Finance.

Ms. Coleman (who I worked with a few times and liked) was frankly an easier "kill" because, while long tenured in the state parks job, she really did not have a lot of political muscle.  Napolitano does.  Relying on consistent standards would say Napolitano should go, but government has never been about applying consistent standards, only power.  So we shall see.

More Folks Climb Onto the US Royal Family Bandwagon

Back on Inauguration Day I wrote:

Wow, it sure does seem useful to have a single figurehead into which the public can pour all the sorts of adulation and voyeurism that they seem to crave.  That way, the people get folks who can look great at parties and make heart-felt speeches and be charismatic and set fashion trends and sound empathetic and even scold us on minor things.  All without giving up an ounce of liberty.  The problem in the US is we use the Presidency today to fulfill this societal need, but in the process can't help but imbue the office with more and more arbitrary power.  Let's split the two roles.

Last week, Andrew Heaton made a similar proposal in the Federalist, but explained the logic better than I did:

We threw the baby out with the bathwater when we kicked the monarchy out of America, and we ought to bring it back. To be clear, I do not mean the sort of hereditary tyrants who rule North Korea, Saudi Arabia, or the New York Yankees. Rather, I’d like for us to get one of those cute, ornamental throne warmers the Europeans trot around to cut ribbons at events.

In America we’ve combined power and reverence in the office of the presidency, but legal authority and veneration compliment each other about as well as Scotch and back pain medication. It’s safer to ingest them separately....

In America our head of government and head of state both problematically reside in the president. We can see that unholy union in full force during the spasm of pageantry which is the State of the Union address. President Jefferson rightly viewed the whole affair as pompous and monarchical, and sent Congress a letter instead.

Unfortunately the nimbus of deference surrounding the presidency has swelled with time. In 1956 a political scientist named Clinton Rossiter published “The American Presidency,” a tome sopping wet with sycophantic notions about the Oval Office. He described the commander-in-chief as “a combination of scoutmaster, Delphic oracle, hero of the silver screen, and father of the multitudes.”

Gag me. The president is the top bureaucrat, and there’s nothing more American than despising bureaucrats. The government is basically a giant Human Resources Department with tanks, and the president is in charge of it.

My only response to this is to quote from just about every comment section on the internet:  "first!"

Bureaucracy Creep

One of the irritating tasks I am required by law to perform for the government is fill in a bunch of detailed information about my business for the US Census Bureau.  This is one of a number of reports the government sends me each year to fill in.  The first thing I look at on these forms is whether they are required by law.  If they are not, they immediately go in the trash can.  In particular, I could spend 110% of my free time filling in Department of Labor surveys that seem to come for each state we operate in.  The only entertainment value I get associated with these many surveys is the calls I sometimes get from government workers asking me if I would please fill in the survey.  Generally I explain to them that 1.  My time is too valuable to waste on this stuff and 2.  There is no way in hell I am going to give them a bunch of data they will likely only use to justify new regulations that make my business life even harder.

The two reports that are required (this does not include of course the dozens of required tax forms, licensing forms, and corporate registration forms we fill out every year) are the annual Census report and the EEO-1 report.  I already discussed a while back the 15-20x increase in size and complexity of the EEO-1 report, where about 3600 new cells have been added that have to be filled in.  This year the Census Accommodations Industry Report had a huge increase in complexity -- last year's report had one cell for last years' total expenses (though the Census bureau's definition of total expenses was so arcane that it took an hour or so to calculate the number).  This year, instead of a single number for expenses there are 48 different cells to be filled in with detailed categories of expenses.  Here are just two of the many categories they demand:

d.  Purchased repairs and maintenance to machinery and equipment - Expensed repair and maintenance services to machinery, vehicles, equipment, and computer hardware. Exclude materials, parts, and supplies used for repairs and maintenance performed by this firm's employees

e.  Purchased repairs and maintenance to buildings, structures, and offices - Include repair and maintenance to integral parts of buildings (e.g., elevators, heating systems). Exclude materials, parts, and supplies used for repairs and maintenance performed by this firm's employees. Report janitorial and grounds maintenance services in line 4c

Perhaps I am a failure as a business person, but my company does not track expenses in this detail, or at least in these specific categories.   The exercise was not only absurdly time-consuming, it was impossible.  Depending on my mood, I might have just filled it all in with random guesses.   However, even though it is not supposed to be used this way, I couldn't shake the sense that someone someday might try to use it to compare against my tax returns (which are prepared quite carefully and accurately) and try to raise red flags.  So I left it all blank.  I will be interested to see how they respond.

The Terrorists Have Won

Security wall going up around the Eiffel Tower

The city of Paris is planning to build a permanent barrier around the Eiffel Tower and its two adjacent ponds in order to beef up security, replacing temporary protective structures that had been up as a result of recent terror attacks. It’s estimated that the structure, which will be bulletproof and able to stop vehicles, will cost the city 20 million euros (about $22 million). ...

Work on the perimeter is scheduled to start this fall, although plans are subject to approval. Once the project is complete, you’ll no longer be able to stroll leisurely under the massive steel tower, as you’ll first have to pass through a security checkpoint involving a metal detector and ID check before you can get up close to the base.

Nothing more romantic than a moonlight stroll under the Eiffel tower... and getting frisked by the French equivalent of the TSA.

By the way, if the Conservatives in this country need a better euphemism for their Mexican wall, here is a suggestion from the French:

While reports have said the wall be made of glass, Paris‘ deputy mayor Jean-François Martins wouldn’t confirm that to be true in a press conference last week — however, Martins did say, “It’s not a wall, it’s an aesthetic perimeter,”

If only the East Germans had been so clever with words, they might have won the Cold War.

Trump is Going to Destroy Economic Growth If We Don't Find Ways to Block Him -- We Need A Real Consumer Advocacy Organization

As an example, from the WSJ today:

Auto executives typically spend the end of the year prepping for product debuts and thinking up ways to spark sales.

This time around, Detroit’s chiefs devoted considerable time to trying to figure out how to deal with the nation’s new commander in chief. Union bosses are being called in to consult on how to reshuffle factory work, board members are trying to figure out who has friends in President Donald Trump ’s new administration, and task forces have been created to monitor his Twitter account.

At a dinner party during the Detroit auto show earlier this month, Ford Motor Co. Chief Executive Mark Fields said he reread Mr. Trump’s “The Art of the Deal” over the holidays. He first read it in the 1980s, but wants to better understand the new occupant of the Oval Office.

American companies, several of which have been scolded by Mr. Trump, often via Twitter, are suddenly grappling with a new, unpredictable force in their operations. Barbs have included the price the Pentagon pays for Lockheed Martin Corp. jets and whether Carrier Corp. assembles furnaces in Indiana. AT&T Inc. Chief Executive Randall Stephenson recently met with Mr. Trump, who had expressed concerns about the telecom giant’s proposed purchase of Time Warner Inc.

In other words, rather than worrying about pleasing consumers, auto companies are spending all their time figuring out how to please the occupant of the White House.  This sounds more like corporate life in Venezuela than the US.  It is absurd that Trump claims to be about reducing regulation, and then personally intervenes to micro-manage corporate division-of-labor and sourcing decision.

We need new consumer activist organizations.  The classic ones, like Nader's PIRG, are captured by progressives and economic illiterates.  Economic nationalism and tariffs and reduced immigration and border taxes and elimination of free trade treaties are all direct assaults on the American consumer.  Do all the Midwestern folks who voted for Trump ostensibly because they are struggling economically really want 20% higher prices in their Wal-Mart?

Postscript:  By the way, for a moment let's accept this awful situation.  Consider women's groups (as discussed here) and their response to Trump and Ford's response.  Which is more likely to succeed?  If abortion were my #1 issue (as it is for my wife), I would be seriously concerned that women's groups were using all the wrong tactics.  Trump is petulant.  He does not back down based on protests, he moves you up the target list.   This is a terrible, awful character flaw, but it is reality.  If women's groups had calmly sat down with Trump in a back room and worked out a deal (with a man who is a lifelong social liberal) they would probably be further ahead.

A Modest Proposal: Let's Adopt A Ceremonial Royal Family for the US To Safely Absorb People's Apparent Need for Powerful, Charismatic Presidents

I have been watching the Crown as well as the new PBS Victoria series, and it got me to thinking.  Wow, it sure does seem useful to have a single figurehead into which the public can pour all the sorts of adulation and voyeurism that they seem to crave.  That way, the people get folks who can look great at parties and make heart-felt speeches and be charismatic and set fashion trends and sound empathetic and even scold us on minor things.  All without giving up an ounce of liberty.  The problem in the US is we use the Presidency today to fulfill this societal need, but in the process can't help but imbue the office with more and more arbitrary power.  Let's split the two roles.

Update:  Don Boudreaux writes:

A Trump presidency comes along with awful risks for Americans.  Yet one very real silver-lining is that Trump’s over-the-top buffoonery and manic barking like a dog at every little thing that goes bump in his sight, along with his chronic inability even to appear to be thoughtful and philosophical and reflective and aware that he is not the center of the universe, might – just might – scrub off some of the ridiculous luster that has built up on on the U.S. Presidency over the course of the past 90 or so years.  Let us hope.

He also links a good article from Kevin Williamson on the cult of the Presidency

Conflict of Interest In Government

You want to raise a government ethics violation?  Here is one for you with which I absolutely agree:

I am not sure that this is a suitable subject for a blog post, probably more a project for an aspiring PhD student, but with all the discussion of conflicts of interest in the Trump cabinet, it strikes me that the most glaring conflict in the public sector is ignored: The CoI between state and local politicians elected with the support of public sector unions who then participate in compensation negotiations for the members of those unions.  Here the temptation of the politicians to buy the support of the unions with public money is overwhelming.  The impact of this is potentially trillions when public pension liabilities are included.

This is such an obvious conflict that I have looked to see if there are laws preventing this, but my initial research shows nothing.

Good God -- California Unfunded Pension Liabilities Estimated at Over $92,000 per State Household

2016-12-02-pension-chart-2

via here.

All that money you thought you were saving for retirement -- it may be you were really saving it for your friendly neighborhood DMV worker's retirement.

Federal Government Punishing Private Individuals for the Fraud and Mistakes of Government Workers

From the LA Times, the US Government is demanding that soldiers repay enlistment bonuses years after they were promised

Nearly 10,000 soldiers, many of whom served multiple combat tours, have been ordered to repay large enlistment bonuses — and slapped with interest charges, wage garnishments and tax liens if they refuse — after audits revealed widespread overpayments by the California Guard at the height of the wars last decade.

Investigations have determined that lack of oversight allowed for widespread fraud and mismanagement by California Guard officials under pressure to meet enlistment targets.

But soldiers say the military is reneging on 10-year-old agreements and imposing severe financial hardship on veterans whose only mistake was to accept bonuses offered when the Pentagon needed to fill the ranks.

Note that there is no implication that there was any fraud on the soldiers' part -- they were offered a fair exchange and they took it.  The Federal government is trying to punish soldiers for potentially illegal or fraudulent actions of government workers.  Now that the soldiers have provided the service they promised, the government is trying to take back the money it promised.  But the soldiers cannot in turn take back their service.

This sort of retroactive one-sided reneging on government contracts and promises is actually fairly common.  For example, I wrote about it here, where private creditors lost all the money they loaned to the government when it was determined that the government officials who approved the loans did not have the authority to do so.  The punishment for the government taking out loans it should not have was to allow the government to keep all the money and screw the  private parties who lent them money in good faith.

I actually have faced this same thing a number of times in my own business.  I pay the government concession fees for the public campgrounds we operate.  There is a process by which the government can ask us to pay these fees in kind by doing some of the government's capital maintenance for it.  The government likes this because we can spend the money more efficiently and get more done with it, and we (and our visitors) like it because the money gets spent right in the park where the customer fees were collected.  However, it has happened on a number of occasions that some internal audit has determined that some agency official approved an in-kind project they should not have. When this happens, the government often comes to me and tells me that they need the money back.  My response is consistently something like, "Bullsh*t!  I have your approval to spend the money and your promise to be reimbursed in writing -- I can't unspend the money you asked me to spend.  There is absolutely no way I am going to pay the financial cost of you violating your own rules."

Working With the Government

In my email today:

CDFW LICENSE PAPER STOCK NOTIFICATION

This email is to inform you that the California Department of Fish and Wildlife (CDFW) is discontinuing the BLUE license paper.  Effective November 1, all licenses must be printed on GREEN license paper.

Please check your license paper stock, if you do not have GREEN license paper, place an order through the CDFW terminal by following the directions below. Once you confirm and/or receive the GREEN license paper, please recycle the BLUE license paper.

 

It Turns Out That Firing Nobody and Giving the Agency More Money is a Really Poor Way to Fix Things

Working in the world of privatization, one objection I get all the time to privately operating in a here-to-for public space is that government officials are somehow more "accountable" to the public than are private companies.

This strikes me as an utter disconnect with reality.  If I screw up, I make less money or even go out of business.  When government agencies or officials screw up, they generally remain unchanged and unpunished forever.  There are no market competitive forces just waiting to shove a government agency aside -- they have a monopoly enforced at the point of government guns.  As I wrote a week ago about a conversation between myself and a government official about my operating public parks:

I understand that my margins are so narrow, if even 5% of those visitors don't come back next year -- because they had a bad time or they saw a bad review online -- I will make no money.  Those 2 million people vote with their feet every year on whether they think I am adequately serving the public, and their votes directly affect how much money I make.

Government agencies have nothing like this sort of accountability for public service.

One reason government agencies seldom change is that the typical response to even overt malfeasance is 1) to give the agency more money, as the agency will blame all incompetence on lack of budget (just think "public schools" and teachers unions) and 2) the agency will fire nobody.

Take the Phoenix VA.  Congress eventually rewarded the VA with more money, almost no one was fired, and the one of the worst managers in the VA system, a serial failure in multiple VA offices who would have been fired from any private company I can think of, was put in charge of the struggling Phoenix VA.

Well, it turns out that firing nobody and giving the agency more money is really a poor way to fix things.

Patients in the Phoenix VA Health Care System are still unable to get timely specialist appointments after massive reform efforts, and delayed care may be to blame for at least one more veteran's death, according to a new Office of the Inspector General probe.

The VA watchdog's latest report, issued Tuesday, says more than two years after Phoenix became the hub of a nationwide VA scandal, inspectors identified 215 deceased patients who were awaiting specialist consultations on the date of death. That included one veteran who "never received an appointment for a cardiology exam that could have prompted further definitive testing and interventions that could have forestalled his death."

The report portrays Phoenix VA clerks, clinicians and administrators as confused and in conflict about scheduling policies despite more than two years of reform and retraining.

"Unexpectedly" as a famous blogger would say.