9 Sep 2010

My politics, redux

In the post earlier today, WEH called attention to a number of government programs that are either broke or failures. I "allowed" that post to go up because I agreed with it, although perhaps not its phrasing. In short:
  • The USPS loses money every year, but it was very successful until the 1970s or so, when competition started to erode its customer base -- by delivering better, faster, cheaper. Its status is protected by unionized workers.
  • SocSec is broken because of its PayGo structure. We need individual accounts, private or not. This status is "protected" by a desire to avoid the reality of lower retirement payouts AND politicians desire to keep spending SS money on current expenses.
  • Fannie Mae and Freddie Mac have been failures since they started playing the market, socializing losses and privatizing gains. Their status is protected by political contributions.
  • The War on Poverty (...and Drugs and Terror) has failed b/c it ignores incentives. It's protected by a bureaucracy that loves to "do" something.
  • Medicare and Medicaid are broken b/c they give away too much without revenues to match. It's protected as "better than nothing" as well as doctors who know how to milk the system. (I favor a single payer, multiple provider system, btw)
  • DoE, like the USDA and DoEd, is a waste of money. All three could be shrunk by 90% and maintain core operations...
So, that's why I put up WEH's post...

Now, LL and DW both implied that I am supporting a "republican" agenda of some sort. Let me be clear:
  • I'm a libertarian -- see this post from two years ago.
  • Obama inherited a totally broken government, one that GW Bush damaged from a fiscal, legal, regulatory and political perspective. GW Bush was, IMO, the worst president in US history. Worse than Nixon (who was pretty corrupt) and certainly worse than Clinton (who was impeached for lying about a blowjob!)
  • Reagan said "The seven scariest words in the English language are 'I'm from the government, and I'm here to help.'" That was ironic, since he then expanded the government by a huge degree, invaded small countries, and did a lot to make the government ineffective. 
  • I have a lot of sympathy for the Tea Party's fiscal agenda, but I loathe the widespread failure to understand just how to deliver efficient government.
  • Democrats are no saints, of course.
This blog is about effective government and policies, especially wrt the provision of water. I think that bureaucrats and politicians can do a good job, but I know that's no sure thing. What matters, often, is whether or not they care, and whether or not they can be monitored and measured for performance and/or forced to compete, so that they serve citizens.

That perspective is behind the "government failure" tag attached to many blog posts. The government can fail, just as markets can fail. The real problem is that government failure is a lot harder to correct.

So let's get back to that, shall we?


  1. @LL emails: "Not everything is broken. Much is mismanaged or misdirected. But broken is not correct. There are programs in each of these agencies that work well. And for those like the USPS that you claim has outlived its useful life, one of the functions of government in my view, is to assist and protect the least among us. Where the USPS went wrong was when Congress made it a quasi-public something or other. Like Fannie and Freddie it then became nothing identifiable. And as a "corporation" it began favoring its own, the richest among us, the large magazines who cannot survive without government welfare while smaller publications and letters pay full freight.

    I am a Heilbruner economist and I believe directed spending is appropriate because there is no such thing as a level playing field. I know yous aid you are a libertarian. Tell me please that you do not drive on the roads or drink treated water supplied to the public or flush a toilet. Prove to me you pay your full share of these services."

  2. @LL -- (1) Broken either means chronic mismanagement or something that cannot be managed b/c it's poorly designed. (2) As you know, "keeping main cheap to help the poor" helps the rich. Better to give income support to the poor and let them pay the full cost of postage. (3) Your road, water, toilet comment is funny, since NONE of this functions are strictly public. As for "prove to me that you pay," I suggest that you re-read the definition of libertarian.

  3. That post is part of no "Republican" agenda I am aware of. Would that either major party had a drop of libertarian blood in its body. Look at the cowards on all sides run from the simple issue of legalizing cannabis (to say nothing of other drugs).
    Unfortunately, the Libertarian Party enjoys being antic outcasts, and the Tea party (whatever *that* is) is a loose amalgam of discontented people, some dangerously ignorant. Although some may chuckle, and silently, or not so silently, agree with some of their points, it is still frightening to think that a huge crowd can be roused by the likes of Palin or Beck. The next ones could be Chavez clones or worse. Once fed a diet of rabble rousing despots, the mob likes the taste, and does not care about the message.

  4. I will see your raise and call.

    On the statements 'status is protected by', please provide facts and references.

    On 'government failure is a lot harder to correct,' please give details as to why it is harder and what effective plan you might have for correcting it.


  5. @Eric -- (1) you can get evidence by reading papers. (2) It's harder to reform gov't b/c of monopoly power, e.g., USPS vs Microsoft as a "monopoly".

  6. The argument that 'because one is a libertarian, one therefore cannot consume services' is bunk. What such a statement intends is, 'I'd like to reserve you as the sucker who only pays for things, and I'll do the taking, thank you'.

    No, if I am compelled to pay for things via taxes, you'd best believe I'm going to get full value for my expense. It's really no different than should a mugger stick me up for my wallet, if he drops a $20 bill as he runs away, I'm going to go and pick it up.

    Libertarianism is a belief that government should do a small set of functions that the market is ill-equipped to do well or equitably, and do those few functions extremely well, at a high level of efficiency.

  7. JWT emails: "I got my first SS card when I was ten years old so I could sweep the floors at Apple's Drug Shoppe in North Mankato, Minnesota, and that is when I began making SS contributions. I have made full contributions every year since I was 21 (time out for high school and the U.S. Navy). Inflation adjusted and invested at a modest 8%, and I will never get to live long enough to get back my contributions.

    In the meantime, Congress has looted the SS fund.

    And two-thirds of Congress are millionaires so they don't worry much about their pay outs from SS, but they love to complain about everyone elses."

  8. Hey David,

    This made me think of you. Enjoy:


  9. @Alex -- thanks. I *do* see the parallel :)

  10. "The real problem is that government failure is a lot harder to correct." True, in large part because the gov't programs are bigger. Failure of any large entity is hard to correct, private or public. Big companies are often allowed to go on failing, just as big government programs are. "Too big to fail" is not just a slogan, it's a real phenomenon. (Or to put it another way - size matters!)

  11. @albiowood. No, you're wrong on that. Competition matters. Monopolies, large or small, reform more slowly than firms with competition. Compare USPS to GM or Ford or Exxon or Wal Mart or ....

  12. Good points, but argument with one, on individual accounts for retirement instead of Social Security. The problem would be that the government then would have much more control over the equity markets, and a vested interest in keeping the markets going up. That could lead to more money-supply manipulation, as we saw in the mid-2000s, to prop things up, leaving to an inevitable boom/bust cycle.

    Best leave people to provide for their own retirement, either through investing or having kids, with family and charity taking care of those who didn't plan right, or at all.

    -- John Seiler


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