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Archive for the ‘Government Inefficiency’ Category

Given the routine corruption and reckless spending in Washington, I frequently get asked how I keep my sanity.

It’s possible, as some of my friends argue, that I’m not actually sane. That would explain why I try to put my finger in the dyke of big government as more and more new leaks keep developing. Only a crazy person would fight against big government when politicians and bureaucrats have a “public choice” incentive to do the wrong thing.

Moreover, if “victory” is restoring the kind of limited government envisioned by the Founding Fathers, then there’s a 99.99 percent chance all my efforts will be wasted.

But allow me to offer a reason for optimism. What if we decide that “victory” is simply hindering the growth of government so that the private sector has enough “breathing room” to continue making our lives richer and better?

That’s the basic message of Human Progress, Marian Tupy’s website showing how the world is constantly improving. And we see good long-run developments from Economic Freedom of the World.

In other words, we don’t need to achieve Libertarian Nirvana. We just need to throw sand in the gears of government.

And that’s why I don’t think my life is pointless. To be sure, I haven’t given up on my dream of replacing the odious internal revenue code with a flat tax, but if the only thing I achieve is to protect America from a value-added tax, I’ll nonetheless go to my grave feeling like I did something very valuable for my country.

But there’s something else that keeps me sane. I also enjoy laughing at government. I regularly write about “great moments” in government and point out that incompetence and stupidity is a regular feature of the federal government, of state governments, and of local governments.

And I also enjoy mocking the spectacular screw-ups and bizarre blunders that are a feature of foreign governments as well.

And that’s our topic for today. So let’s start with this story from India about a very unusual example of vote buying.

A south Indian state has become possibly the first in the world to offer publicly-funded breast implants, its health minister arguing, “Why should beauty treatment not be available to the poor?” The Tamil Nadu state health department on Wednesday launched the free service at a clinic in the capital Chennai. …The clinic had already been providing breast reconstruction surgery for cancer patients, but was now extending the service for people who wished to alter the size of their breasts for other health or cosmetic reasons. The head of plastic surgery at the clinic, Dr V Ramadevi, said some of her patients…sought to augment or shrink their breasts for a boost in confidence. “There is a psychological benefit. Many girls who have larger breasts don’t like to go out. There is no reason this surgery should be restricted from the poor.” The procedure would also be available to men, she said. …Tamil Nadu’s government is known for its largesse, particularly under former chief minister Jayalalithaa, who pioneered free food canteens and doled out wedding jewellery and venues to the poor.

I’ve previously reported on crazy examples of government policy in India, so I suppose this story shouldn’t surprise me.

And since taxpayer-financed cosmetic surgery exists in the United Kingdom and the United States, Indian taxpayers can take solace that they’re not alone.

Now let’s go to Belgium, where there’s apparently a problem with rogue royalty.

Prince Laurent of Belgium has had his monthly allowance docked for a year, after a vote by the country’s federal parliament. The sanction was imposed after the prince attended a Chinese embassy reception last year without government permission, in full naval uniform. Lawmakers voted for a 15% cut to his €307,000 (£270,000; $378,000) annual allowance. …Prince Laurent, who is the younger brother of King Philippe, wrote a lengthy emotional letter to parliament before the vote on his endowment, arguing that, as a royal, he is unable to work for a living. He described the vote as “the trial of my life” and said it would “likely cause me serious prejudice” if MPs went against him. …The prince, 54, said the royal family had obstructed his attempts to be financially independent. …Lawmakers ultimately rejected his claim that no citizen of their country had been so exploited, voting to cut his stipend by 93 to 23 votes. …He had previously been criticised for attending meetings in Libya when the late Muammar Gaddafi was still in power, and making an unsanctioned 2011 trip to the Democratic Republic of Congo, a former Belgian colony.

I suppose this is a feel-good story in that politicians actually voted to cut spending.

Though we should never forget that this is the country where the public sector consumes half of economic output but officials actually complained that it’s hard to fight terrorism because of “the small size of the Belgian government.”

Now it’s time for ar stop in Malaysia, where corrupt politicians spent the country into debt and now they want taxpayers to voluntarily cough up extra money.

When Malaysian Prime Minister Mahathir Mohamad unexpectedly won his bid for office in May, he pledged to…get the country’s $250 billion worth of debt under control. And this week, he announced the government had found a way to at least get started: crowdfunding. Within 24 hours, the “Malaysia Hope Fund” raised almost $2 million, the BBC reported. “The rakyat (people) voluntarily want to share their earnings with the government to help ease the burden,” the finance ministry said in a statement, announcing that it would be accepting donations to a special fund set up to help relieve the country’s debt. …The crowdfunding idea started with a 27-year-old named Nik Shazarina Bakti, who recently launched a private crowdfunding initiative to help relieve Malaysia’s debt.  She raised around $3,500 before the government stepped in. In a sense, the effort is a version of what she said Malaysians did during their struggle for independence from Britain, when they donated jewelry, money and valuables. It’s also similar to what South Korea did as it attempted to pull itself out of economic crisis in the late 1990s, and regular citizens lined up to donate their most prized possessions to the government, including wedding rings and trophies.

Hmmm…, $2 million raised to pay off $250 billion of debt. Methinks they won’t meet their goal.

Though this story reminds me that politicians like Elizabeth Warren want the rest of us to pay more tax, yet she conveniently doesn’t participate in her state’s version of voluntary crowdfunding.

Here’s an amazing story from Romania.

He’s a dead man walking and the court ruling is final. A Romanian court has rejected a man’s claim that he is still very much alive, after he was officially registered as deceased, the Associated Press reports. Constantin Reliu, 63, lost his case in Vasului because he appealed too late on the ruling, a court spokeswoman said Friday. The story goes that Reliu had traveled to Turkey in 1992 for work and lost contact with his family. Since his wife had not heard from her husband in years, she acquired a death certificate for him in 2016, the AP reports. However, since Reliu was discovered by Turkish authorities this year with expired papers, he was deported back to Romania. That’s when he discovered he had been declared dead.

Wow. I thought American courts generated some outlandish decisions, but this belies belief.

Last but not least, here’s a report from Spain that should leave you skeptical about the efficacy of additional NATO spending.

An attempt to deploy a new submarine for Spain’s navy has run aground again, after it emerged it cannot fit in its dock, Spanish media report. The S-80 boat was redesigned at great expense after an earlier mistake meant it had problems floating, and it was lengthened to correct the issue. Spanish newspaper El País now reports that after the changes, the docks at Cartagena can no longer fit the vessel. The cost for each has almost doubled, the newspaper said. …The original problem with the submarine dates back to 2013, when it was discovered that it was about 100 tons heavier than it needed to be. That caused a problem for its buoyancy – so it could submerge, but might not come back up again. A former Spanish official told the Associated Press at the time that someone had put a decimal point in the wrong place, and “nobody paid attention to review the calculations”. …the base at Cartagena will have to be dredged and reshaped to accommodate the now-floating longer vessel, the El País report said. Spain’s Defence Minister Margarita Robles, speaking on Spanish radio, admitted that “there have been deficiencies in the project”.

Call me crazy, but “deficiencies” doesn’t really describe what happened. Almost makes the Pentagon look frugal. Almost makes the German intelligence service look competent.

For previous examples of great moments in foreign government, click here, here, here, here, here, here, here, here, here, and here.

P.S. In other words, my “government in cartoons” collection applies equally no matter where you travel.

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I try not to pay much attention to the staffing decisions of President Trump’s “Boston-phone-book presidency.” Yes, I realize those choices are important, but my focus is policy.

As such, I don’t have any strong opinions on the ouster of David Shulkin, the now-former Secretary at the Department of Veterans Affairs. But I definitely have something to say about whether America’s military vets should be consigned to an inefficient (at best) and costly form of government-run healthcare.

We should never forget that the VA put vets on secret – and sometimes fatal – waiting lists. And then the bureaucrats awarded themselves big bonuses. That is horribly disgusting.

By the way, the VA scandals haven’t stopped.

Here are some excerpts from a report in USA Today.

A USA TODAY investigation found the VA — the nation’s largest employer of health care workers — has for years concealed mistakes and misdeeds by staff members entrusted with the care of veterans. …In some cases, agency managers do not report troubled practitioners to the National Practitioner Data Bank, making it easier for them to keep working with patients elsewhere. The agency also failed to ensure VA hospitals reported disciplined providers to state licensing boards. In other cases, veterans’ hospitals signed secret settlement deals with dozens of doctors, nurses and health care workers that included promises to conceal serious mistakes — from inappropriate relationships and breakdowns in supervision to dangerous medical errors – even after forcing them out of the VA. …The VA has been under fire in recent years for serious problems, including revelations of life-threatening delays in treating veterans in 2014 and efforts to cover up shortfalls by falsifying records.

So what’s the answer? How can we fix a dysfunctional bureaucracy?

The honest answer is that we can’t. Inefficiency, sloth, and failure are inherent parts of government (yes, the free market also is far from perfect, but at least there’s a profit-and-loss incentive that rewards good firms and punishes bad ones).

So it’s time to get the private sector involved. Though I noted in the TV discussion that not all privatization is created equal. If the government simply contracts with selected healthcare providers, that could be a recipe for cronyism since politicians would try to help their campaign contributors.

I much prefer the advance-funding model developed by Chris Preble and Michael Cannon, which would give active-duty service members added money, up front, to purchase a benefits package to cover future costs related to their military service.

For what it’s worth, former VA Secretary Shulkin, in a recent column for the New York Times, was very critical of privatization. But it isn’t clear whether he was referring to the contracted-out version or the advance-funding version.

I am convinced that privatization is a political issue aimed at rewarding select people and companies with profits, even if it undermines care for veterans. …individuals, who seek to privatize veteran health care as an alternative to government-run V.A. care, unfortunately fail to engage in realistic plans regarding who will care for the more than 9 million veterans who rely on the department for life-sustaining care. …privatization leading to the dismantling of the department’s extensive health care system is a terrible idea.

But even if you accept that he’s criticizing the less-preferred from or privatization, he definitely likes throwing rocks in a giant glass house considering the VA received ever-larger amounts of money and generated a horrible track record.

As I said at the end of my interview, a private healthcare provider might get a contract via cronyism, but it still would be a better option for vets since that company presumably wouldn’t let them die on secret waiting lists.

And since the advance-funding option obviously would be for future veterans, we do need a better market-based approach for current veterans.

I’ll close by sharing a Politico article on the infamous boondoggle that got Shulkin in trouble.

Veterans Affairs Secretary David Shulkin’s chief of staff altered an email to create a pretext for taxpayers to pay for Shulkin’s wife to accompany him on a 10-day trip to Europe last summer, the agency’s inspector general reported… The report by Inspector General Michael Missal also claims that Shulkin improperly accepted a gift of Wimbledon tickets during the trip, and a VA employee’s time was misused planning tourist activities for Shulkin and his entourage. …the VA paid for Shulkin’s wife’s airfare, which cost more than $4,300.

This obviously does not reflect well on Shulkin. But the real scandal almost certainly is that the trip to Europe occurred. We don’t know how many bureaucrats participated and what supposedly was going to be achieved by this junked, but I’m guessing the total tab was enormous and the total value was zero. The fact that taxpayers also were saddled with the cost of Shulkin’s wife’s trip merely added insult to injury.

P.S. Since money isn’t unlimited, I think the focus should be on helping veterans injured in battle rather than providing lavish benefits to anyone and everyone who ever wore a uniform.

P.P.S. I mentioned in the interview that the VA is run for the benefit of its bureaucrats. If you doubt me, check out this double-dipping bureaucrat with the triple-dipping scam.

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The story of the private sector is that competition generates ever-more output in ways that bring ever-higher living standards to ever-greater numbers of people.

By contrast, the story of the government is inefficiency and waste as interest groups figure out how to grab ever-larger amounts of unmerited goodies, often while doing less and less.

In some cases, where government is doing bad things (stealing property, subsidizing big corporations, fleecing poor people, etc), I actually favor inefficiency.

Sadly, the government seems to be most inefficient in areas where we all hope for good results. Education is a powerful (and sad) example.

A story in the LA Weekly is a perfect illustration of this phenomenon.

A little more than a decade ago, something unexpected happened. The district’s enrollment, which peaked in 2004 at just under 750,000, began to drop. …Today, LAUSD’s enrollment is around 514,000, a number that the district estimates will fall below half a million by 2018.

Anyone want to guess whether this means less spending?

Of course not.

L.A. Unified’s costs have not gone down. They’ve gone up. This year’s $7.59 billion budget is half a billion dollars more than last year’s. …Today, the district has more than 60,000 employees, fewer than half of whom are teachers. …LAUSD’s administrative staff had grown 22 percent over the previous five years. Over that same period of time, the number of teachers had dropped by 9 percent.

If these trends continue, maybe we’ll get an example of “peak bureaucracy,” with a giant workforce that does absolutely nothing!

Based on his famous chart, the late Andrew Coulson probably wouldn’t be too surprised by that outcome.

There’s also lots of waste and inefficiency when Uncle Sam gets involved. With great fanfare, President Obama spent buckets of money to supposedly boost government schools. The results were predictably bad.

It was such a failure than even a story in the Washington Post admitted the money was wasted (in other words, there wasn’t enough lipstick to make the pig look attractive).

One of the Obama administration’s signature efforts in education, which pumped billions of federal dollars into overhauling the nation’s worst schools, failed to produce meaningful results, according to a federal analysis. Test scores, graduation rates and college enrollment were no different in schools that received money through the School Improvement Grants program — the largest federal investment ever targeted to failing schools — than in schools that did not. …The School Improvement Grants program…received an enormous boost under Obama. The administration funneled $7 billion into the program between 2010 and 2015… Arne Duncan, Obama’s education secretary from 2009 to 2016, said his aim was to turn around 1,000 schools every year for five years. ..The school turnaround effort, he told The Washington Post days before he left office in 2016, was arguably the administration’s “biggest bet.”

It was a “bet,” but he used our money. And he lost. Or, to be more accurate, taxpayers lost. And children lost.

Some education experts say that the administration closed its eyes to mounting evidence about the program’s problems in its own interim evaluations, which were released in the years after the first big infusion of cash. …Smarick said he had never seen such a huge investment produce zero results. …Results from the School Improvement Grants have shored up previous research showing that pouring money into dysfunctional schools and systems does not work.

Indeed, I’ve seen this movie before. Many times. Bush’s no-bureaucrat-left-behind initiative flopped. Obama’s latest initiative flopped. Common Core also failed. Various schemes at the state level to dump more money into government schools also lead to failure. Local initiative to spend more don’t lead to good results, either.

Gee, it’s almost as if a social scientist (or anybody with a greater-than-room-temperature IQ) could draw a logical conclusion from these repeated failures.

And, to be fair, some folks on the left have begun to wake up. Consider this recent study by Jonathan Rothwell, published by Brookings, which has some very sobering findings.

…the productivity of the education sector depends on the relationship between how much it generates in value—learning, in this case—relative to its costs. Unfortunately, productivity is way down. …This weak performance is even more disturbing given that the U.S. spends more on education, on a per student basis, than almost any other country. So what’s going wrong? …In primary and secondary public education, where price increases have been less dramatic, there has been a decline in bureaucratic efficiency. The number of students for every district-level administrator fell from 519 in 1980 to 365 in 2012. Principals and assistant principals managed 382 students in 1980 but only 294 in 2012.

The conclusion is stark.

Declining education productivity disproportionately harms the poor. …unlike their affluent peers, low-income parents lack the resources to overcome weak quality by home-schooling their children or hiring private tutors. Over the last 30 to 40 years, the United States has invested heavily in education, with little to show for it. The result is a society with more inequality and less economic growth; a high price.

Incidentally, even private money is largely wasted when it goes into government schools. Facebook’s founder famously donated $100 million to Newark’s schools back in 2010.

So how did that work out? As a Washington Post columnist explained, the funds that went to government schools was basically money down the toilet.

It is a story of the earnest young billionaire whose conviction that the key to fixing schools is paying the best teachers well collided with the reality of seniority protections not only written into teacher contracts but also embedded in state law.

But there is a bit of good news. Some of the money helped enable charter schools.

there is a more optimistic way to interpret the Newark experience, much of which has to do with the success of the city’s fast-growing charter schools. …The reasons are obvious. Unencumbered by bureaucracy and legacy labor costs, charters can devote far more resources to students, providing the kind of wraparound services that students like Beyah need. An analysis by Advocates for Children of New Jersey noted “a substantial and persistent achievement gap” between students at charter and traditional public schools: “For example, while 71 percent of charter school students in Newark passed third-grade language arts tests in 2013-14 — higher than the state average of 66 percent — only 41 percent of students in Newark traditional public schools passed those tests.”

The Wall Street Journal also opined about this topic.

‘What happened with the $100 million that Newark’s schools got from Facebook’s Mark Zuckerberg?” asks a recent headline. “Not much” is the short answer. …The Facebook founder negotiated his gift with New Jersey Gov. Chris Christie and then-Mayor Cory Booker in 2010, and it flowed into Newark’s public-school system shortly thereafter. The bulk of the funds supported consultants and the salaries and pensions of teachers and administrators, so the donation only reinforced the bureaucratic and political ills that have long plagued public education in the Garden State.

The editorial explains that this isn’t the first time a wealthy philanthropist squandered money on government schools.

In 1993, philanthropist Walter Annenberg sought to improve education by awarding $500 million to America’s public schools. …But the $1.1 billion in spending that resulted, thanks to matching grants, accomplished little. An assessment by the Consortium on Chicago School Research on the schools that received funds reached a dismal conclusion: “Findings from large-scale survey analyses, longitudinal field research, and student achievement test score analyses reveal that . . . there is little evidence of an overall Annenberg school improvement effect.” The report did not explain why the campaign failed, but the reason is fairly obvious: The funds wound up in the hands of the unions, administrators and political figures who created the problems in the first place.

Fortunately, not all rich people believe in wasting money. Some of them actually want to help kids succeed.

In 1998, John Walton and Ted Forstmann each gave $50 million to fund scholarships for low-income children to attend private schools. More than 140,000 students have attended schools with graduation and college matriculation rates that exceed 90% instead of going to the failing schools in their neighborhoods. Earlier this summer, hedge-fund manager John Paulson pledged $8.5 million to the Success Academy charter-school network, where 93% of students are proficient in math, compared with 35% of their traditional public-school peers. His gift will allow more such schools to open. The financier Stephen Schwarzman and his wife, Christine, a former attorney, donated $40 million to help endow the Inner-City Scholarship Fund, which provides financial aid to needy children attending Catholic schools in the Archdiocese of New York.

Which is a good segue into the real lesson for today about the type of reforms that actually could boost education.

I’ve shared in the past very strong evidence about how school choice delivers better education results.

Which is what everyone should expect since competition is superior to monopoly.

Well, as explained in another Wall street Journal editorial, it also generates superior results at lower cost. Especially when you factor in the long-run benefits.

…a study shows that Milwaukee’s landmark voucher program will save taxpayers hundreds of millions of dollars. …the Wisconsin Institute for Law and Liberty, a nonprofit that advocates for limited government and education reform, decided to look at the relative cost and benefits of choice schools. And, what do you know, it found that students participating in Milwaukee’s voucher program will provide the city, state and students nearly $500 million in economic benefits through 2035 thanks to higher graduation and lower crime rates. …More education translates into higher incomes, more tax revenue and a lower likelihood of reliance on government welfare or other payments. Meanwhile, greater economic opportunity also prevents young adults from turning to crime.

Wow. It’s not just that it costs less to educate children in private schools. There’s also a big long-run payoff from having more productive (and law-abiding) citizens.

That’s a real multiplier effect, unlike the nonsense we get from Keynesian stimulus schemes.

P.S. School choice doesn’t automatically mean every child will be an educational success, but evidence from SwedenChile, and the Netherlands shows good results after breaking up state-run education monopolies.

And there’s growing evidence that it also works in the limited cases where it exists in the United States.

P.P.S. Or we can just stick with the status quo, which involves spending more money, per student, than any other nation while getting dismal results.

P.P.P.S. This is a depressing post, so let’s close with a bit of humor showing the evolution of math lessons in government schools.

P.P.P.P.S. If you want some unintentional humor, the New York Times thinks that education spending has been reduced.

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