Coyote Blog

My column in Forbes is up.  Here is how it starts.  Hit the link to see it all.

We Americans are all being held hostage.  The ransom demand:  Trillions of dollars in new taxes.  The threat:  the shut down of any number of economic activities, from retirement payments to mortgage lending.

Megan McArdle, blogging at the Atlantic Monthly, posted a hypothetical list of what government activities would have to cease if we bumped up against the debt ceiling and 40% of government activity (ie the amount currently funded by deficit spending) had to cease immediately. Here are two examples from her article:

The market for guaranteed student loans plunges into chaos. Hope your kid wasn’t going to college this year!

The mortgage market evaporates. Hope you didn’t need to buy or sell a house!

Terrorists have tried for years to find some way to threaten the whole of America and have, with the exception of 9/11, never really succeeded.  Who knew that all they really needed was not to buy guns and bombs, but to get elected to Congress.   How did we ever get in this position, where a handful of men and women in Washington had the power to hold the entire economy hostage?

 

Brilliant!  Selling dollar coins for 95-cents.  Maybe they will make it up on volume.

Megan McArdle posted a hypothetical list of what would have to stop if the government shrunk 40%, which is grabbed gleefully by folks likeKevin Drum to support the continued fiat power of government officials to demand that the public sector be as large as they, not we, want it.

Here are two examples:

The market for guaranteed student loans plunges into chaos. Hope your kid wasn't going to college this year!

The mortgage market evaporates. Hope you didn't need to buy or sell a house!

Wow - this is a great example of how statists defend their power.  Here is the basic process:

Step 1:  Take over a traditionally private offering and move it into the public domain.  Mortgage lending is a good example.  Wipe out the private sector either by fiat, or by subsidizing the government offering.

Step 2: Once the traditionally private offering has been made a public good, use its loss as a threat against any decrease in government size or power.

Just because the government does not provide the offering does not mean it won't exist.  Private mortgages and private student loans without government guarantees existed for years and can again.

Yes, it would be a mess if done overnight, but this just demonstrates that the government has gone past government service to hostage-taking.  If you threaten us and our power, we will bring everything crashing down.  It is obscene, and all the more reason, when the near term budget problems are sorted out, we need to start moving all these activities back to the private sector.

By the way, this is a great demonstration of how, while the private sector can screw up, giving the public sector power to supposedly tame the private sector just creates a worse problem.  Sure, some private mortgage lenders screwed up and contributed to the bubble.  Some even committed fraud.  But none of them had the power to shut down the entire market, as in the implied threat here.

McArdle's list may be a good reason not to let the debt limit expire, but it is an even better reason to get these activities out of the Federal government so that a few politicians can no longer hold us hostage.

From Radley Balko, this is just staggering:

Federal employees’ job security is so great that workers in many agencies are more likely to die of natural causes than get laid off or fired, a USA TODAY analysis finds.

Death — rather than poor performance, misconduct or layoffs — is the primary threat to job security at the Environmental Protection Agency, the Small Business Administration, the Department of Housing and Urban Development, the Office of Management and Budget and a dozen other federal operations.

The federal government fired 0.55% of its workers in the budget year that ended Sept. 30 — 11,668 employees in its 2.1 million workforce. Research shows that the private sector fires about 3% of workers annually for poor performance . . .

The 1,800-employee Federal Communications Commission and the 1,200-employee Federal Trade Commission didn’t lay off or fire a single employee last year. The SBA had no layoffs, six firings and 17 deaths in its 4,000-employee workforce.

When job security is at a premium, the federal government remains the place to work for those who want to avoid losing a job. The job security rate for all federal workers was 99.43% last year and nearly 100% for those on the job more than a few years . . .

White-collar federal workers have almost total job security after a few years on the job. Last year, the government fired none of its 3,000 meteorologists, 2,500 health insurance administrators, 1,000 optometrists, 800 historians or 500 industrial property managers.

The nearly half-million federal employees earning $100,000 or more enjoyed a 99.82% job security rate in 2010. Only 27 of 35,000 federal attorneys were fired last year. None was laid off.

Forgetting for a minute the adverse selection and incentive problems from preferentially attracting folks who want to work in an environment without any accountability for performance, how can an institution that is running $1 trillion over budget not have any layoff either?

At a time when government finances are already overdrawn, let's take the US industry with the fastest growing costs, where there is the least understanding or consensus how to control costs, and where the emotional price for cutting costs is the highest -- and let's nationalize it.

Remember that when you think about the current fiscal debate and mess -- because the horrible current deficits that Congress is trying to address are pre-Obamacare.  It is only going to get a lot worse.

Several blogs have pointed out this February editorial in the USA Today by Jacob Lew, head of Obama's OMB.  In February he told us, no, in true Obama Administration fashion, he lectured us like little kids that:

Social Security benefits are entirely self-financing. They are paid for with payroll taxes collected from workers and their employers throughout their careers. These taxes are placed in a trust fund dedicated to paying benefits owed to current and future beneficiaries.

When more taxes are collected than are needed to pay benefits, funds are converted to Treasury bonds — backed with the full faith and credit of the U.S. government — and are held in reserve for when revenue collected is not enough to pay the benefits due. We have just as much obligation to pay back those bonds with interest as we do to any other bondholders. The trust fund is the backbone of an important compact: that a lifetime of work will ensure dignity in retirement.

According to the most recent report of the independent Social Security Trustees, the trust fund is currently in surplus and growing. Even though Social Security began collecting less in taxes than it paid in benefits in 2010, the trust fund will continue to accrue interest and grow until 2025, and will have adequate resources to pay full benefits for the next 26 years.

As many have pointed out this week, if this is the case, why does the debt limit even affect the ability to pay or not pay Social Security to grandma?  Because Lew was spouting complete BS.  Social Security has generated surpluses in the past, but these have been spent and replaced with IOU's.  And we are finding out right now how much those IOU's are worth - zero.

As you probably know, Minnesota is in the midst of a government shutdown due to lack of a budget.  My daughter is doing a project for me putting together the names and contact information for all 50 state parks directors.  It turns out the MN parks web site is shut down.

LOL.  I am the only one in my company with access to or capable of updating our web site, but I can go away for weeks, even months, and have the web site stay up.  This strikes me as either stupid, or a gratuitous effort to purposely make the shutdown more dramatic than it needs to be.

To the latter point, our company operates many Federal parks.   Since we take no money from the government and use no government personell in doing so, the parks we operate typically stay open in a Federal shut down.  Except for the last threatened shut down several months ago, when our contract managers seemed to be getting guidance from their higher ups in the administration to shut the parks down, even when they did not need to be.  I presume this was for the purpose of making the shut down seem worse to the public.  After all, we would hate to have a government shut down and have nobody notice.

It will be interesting come about August 2 to see if we remain open.

When the framers of the Constitution designed its separation of powers features, they presumed that members of each of the three branches would try to protect their own turf.  In other words, grabs of power by one branch would be met by hard pushback from other branches.

What they did not anticipate was that Congress would simply give away power to the Executive.  It seems like Congressman only want their job titles, and maybe the ability to pass a few earmarks for the home district now and then, and would really like not to be bothered by that whole legislation thing.  After all, your election opponents can't critique you for votes that were never taken.

This has been occuring for years, with the accretion of regulatory authorities (like the EPA) whose rules-making effectively usurps traditional Congressional regulatory authority.

More recently, the Democrats in Congress gave away immense power in Obamacare by creating an independent cost cutting board.  Cost cutting suggestions of this board become law automatically unless Congress votes to override the changes, and even then they cannot override without passing cost cuts of similar magnitude on their own.  The whole point was to take legislation of things like the doc fix, which just gets everyone riled up, out of the sphere of Congressional accountability.

Now the Senate Republicans are proposing what appears to me to be exactly the same bullsh*t vis a vis the debt limit.  The debt limit is in fact a poor name.  In fact, it should be called the debt authorization.  Issuance of government debt can only by Constitutionally authorized by Congress, but instead of giving the Administration a blank check, it authorizes the Treasury to issue debt up to some limit, kind of like the limit on a credit card and serving much the same purpose.  While Democrats talk about the debt limit as if it is some useless device, sort of like an appendix, it is in fact central to the excercise of power by both branches as set up in the Constitution.

Senate Republicans, though, want to change all that by giving the Executive Branch what amounts to a credit card with no limit.  Why? Again, Congress is just dead tired of being so accountable for so many difficult decisions, and it would rather turn the President in to an Emperor than have to face difficult questions at reelection time.  This is so gutless I could scream:

The debt limit now works as an only if proposition: the debt limit is increased only if Congress votes affirmatively to authorize an increase. Increasing the debt limit therefore requires a majority of the House and Senate to cast a difficult aye vote, plus a Presidential signature. The McConnell proposal would invert this into an unless proposition: the debt limit would automatically be increased unlessCongress voted to stop it. And by changing the key vote to a veto override, you would need only 1/3 of either the House or Senate to take a tough vote to allow the debt limit to increase.

In exchange for this significant increase in Presidential authority, the President would take most of the political heat for the debt limit increase, and he would be required to propose difficult spending cuts of an equal or greater amount.

Congresspersons of both parties don't give a cr*p about the Constitution or fiscal responsibility.  They just want to avoid accountability.

Fortunately, I can see the House buying this at all.  The House has a special role in spending and taxation, and I see them far more loath to accept this kind of deal.

What does a statist government do when attaching "unexpected" to all negative economic numbers does not provide the necessary political cover?

Argentina’s government has filed criminal charges against the managers of an economic consulting firm, escalating its persecution of independent economists.

…The government is charging MyS Consultores with “publishing false information about inflation data” to benefit themselves and their clients. The criminal complaint alleges that MyS’s data also lead to speculative behavior in Argentina’s bond market.

…Consumer prices rose 9.7% in May from a year ago, according to the national statistics agency, Indec. But virtually all economists say annual inflation surpasses 20%—one of the world’s highest rates—angering government officials who dismiss inflation as a problem.

…So far this year, the Secretariat has fined at least nine economic research firms 500,000 pesos ($122,000) each. This week, the Secretariat also slapped a second fine on Orlando J Ferreres & Asociados.

“They fine us for saying how much prices have risen,” Mr. Ferreres, director of his eponymous firm, said. “They could seek criminal charges against all of us. We don’t know how far they’re willing to go.”

Mr. Ferreres said the legal actions are part of a strategy to prevent independent economists from publishing potentially negative information during an election year…

Government officials say they hoped the fines would deter economists from “deceiving” the public into making poor financial decisions by publishing inflation estimates that differ considerably from Indec’s consumer price index.

It is sad to see how far Argentina has fallen.  In the past it has been one of my favorite countries in the world to visit.

Our rulers are pretty good at finding tricky ways to expand their power

...several environmental groups that have received millions in EPA grants regularly file suit against that same agency. A dozen green groups were responsible for more than 3,000 suits against the EPA and other government agencies over the past decade, according to a study by the Wyoming-based Budd-Falen Law Offices.

The EPA even tacitly encourages such suits, going so far as to pay for and promote a "Citizen's Guide" that, among other things, explains how to sue the agency under "citizen suit" provisions in environmental laws. The guide's author — the Environmental Law Institute — has received $9.9 million in EPA grants over the past decade.

And, to top it off, critics say the EPA often ends up paying the groups' legal fees under the Equal Access to Justice Act.

"The EPA isn't harmed by these suits," said Jeffrey Holmstead, who was an EPA official during the Bush administration. "Often the suits involve things the EPA wants to do anyway. By inviting a lawsuit and then signing a consent decree, the agency gets legal cover from political heat."

 

Have you ever notices how "partisan bickering" seems to be defined asymmetrically?   In most of the media, when such a term is used, it generally means "folks trying to reduce the size of the state have gotten uppity of late."   We have just such an example here in Phoenix:

A non-profit organization created by a former spokesman for the Phoenix Mayor's Office is bankrolling the political committee aiming to recall Phoenix Councilman Sal DiCiccio.

The group, Protect Voters' Rights, has contributed $50,000 to the anti-DiCiccio group called Save Phoenix Taxpayers, according to campaign-finance reports filed with the Phoenix city clerk. The contributions from Protect Voters' Rights make up all but $100 of the funding Save Phoenix Taxpayers reported earning since the group formed to launch its recall campaign against DiCiccio in April.

Scott Phelps, a retired Phoenix employee who served as the spokesman for four different mayors during his 19-year tenure, said he formed Protect Voters' Rights to protect the city from being destroyed by partisan politics.

"One of the things I find discouraging and destructive is the rush by folks to make city government more like Congress and the state Legislature," Phelps said. "I can't think of a single soul who looks at the partisan bickering there and says we can use a little more of that at City Hall."

The latter statement is telling, as it seems to be in response to Republican and Tea Party influence in Congress since the last election.  Phelps longs for a return to one-party (Democratic) rule, and for him "bickering" means any sort of political opposition to his agenda, which seems to be the continued growth of government size and power.

DiCiccio is certainly a hell-raiser.  Most recently, he has complained about the mayor's back-door efforts to slip large pay raises for city workers into the budget, despite the ongoing recession that has hit city finances hard.   Further, he has suggested that private enterprises might be able to do things, like maintenance, janitorial, or clerical work, cheaper than government employees.  It is this latter idea, which sounds good to me, which apparently puts him beyond the pale for agents of the state:

Save Phoenix Taxpayers received the first check because some of what DiCiccio has been doing is an example of what Protect Voters' Rights aims to fight.

Phelps specifically cited DiCiccio's lobbying of a bill during the last Legislative session that would have required Phoenix to competitively bid out city services that cost more than $250,000. Gov. Jan Brewer vetoed the bill.

"It's not the right thing to do to run down to the Legislature and try to get that group's leadership, which isn't being filled by the deepest thinkers that have ever held those positions, to impose the will of one or two council members on the entire city," Phelps said.

I will admit that seeking a state law to force Phoenix's hand is an odd approach, but the core objection here is not the odd legislative approach but the threat to government worker jobs.  DiCiccio suspects the group is a front for government workers unions, and I think he is probably right.   After all, it is extremely odd to see a group that nominally calls itself a good-government group shocked by the very idea of seeking competitive bids for city services.

This was a pretty amazing article on cost savings experienced already by one school district in Wisconsin after the collective bargaining agreement with government unions was voided.

Of course, there have already been substantial cost-savings as more sane work rules have been put in place and employees have to pay a larger (but still trivial) share of their pension and health care premiums.

But I thought this bit of self-dealing by the unions was pretty amazing and is the type of thing that did not make the news back in the whole Wisconsin brouhaha

"The monetary part of it is not the entire issue," says Arnoldussen, a political independent who won a spot on the board in a nonpartisan election. Indeed, some of the most important improvements in Kaukauna's outlook are because of the new limits on collective bargaining.

In the past, Kaukauna's agreement with the teachers union required the school district to purchase health insurance coverage from something called WEA Trust -- a company created by the Wisconsin teachers union. "It was in the collective bargaining agreement that we could only negotiate with them," says Arnoldussen. "Well, you know what happens when you can only negotiate with one vendor." This year, WEA Trust told Kaukauna that it would face a significant increase in premiums.

Now, the collective bargaining agreement is gone, and the school district is free to shop around for coverage. And all of a sudden, WEA Trust has changed its position. "With these changes, the schools could go out for bids, and lo and behold, WEA Trust said, 'We can match the lowest bid,'" says Republican state Rep. Jim Steineke, who represents the area and supports the Walker changes. At least for the moment, Kaukauna is staying with WEA Trust, but saving substantial amounts of money.

This strikes me as an amazing example of self-dealing.  The union requires that their health care insurer get a monopoly, and then extract monopoly rents from the relationship.  You can be sure the union rank and file never saw a dime of these health care profits, which likely flowed to just a few union leaders plus the politicians who helped make it possible.

Bruce at Q&O has more

Standard disclaimer: I have no particular beef with unions per se, whose ability to organize workers is protected under the First Amendment's right to assembly.  My problems related to unions are

1. Government rules that tilt the balance of power in negotiation to unions, require that all employees (in certain non-right-to-work states) join unions or at least pay dues, etc.
2. Public unions are a different animal than private sector unions and I have turned pretty strongly against these.  The problem in public sector unions is that there is no adversary -- ie the politicians nominally negotiating with unions are often on the same side as the unions and cut horrible sweetheart deals that screw taxpayers.  Until we find a way to really represent taxpayers in public sector union negotiations as well as shareholders are represented in private sector negotiations, I tend to favor limits on public sector collective bargaining.

From Ace of Spades via Maggies Farm

Obama and, it seems, many courts, would like to pretend that while the Constitution generally speaks of enumerated and limited powers -- all other powers, such a the police power, reserved for the people and the states -- that the Commerce Clause generally is a "Take-Back" clause that essentially calls bullshit on everything else in the Constitution.

That is, everything else in the Constitution is about establishing particular powers of the federal government, and, expressly, reserving those not named (or "necessary and proper" to undertake a named power) to the states.

But this new claim is that really there is only one clause that matters in the Constitution, and that is the Commerce Clause, and this one brief clause renders all 4400 other words in the Constitution null and void, because the Commerce Clause says, it is contended, that the federal government may do anything so long as, in the aggregate, it "affects interstate commerce," which, as is often pointed out, applies to everything.

The Obama administration has abandoned even the pretense of not being in the tank for its union supporters.

First, it handed took ownership of GM away from secured creditors and gave it to the UAW.

Second was the NLRB over-reach in veto-ing plant relocation decisions by Boeing

More recently came the rules changes for quick, midnight unionization elections to prevent target companies from being able to tell their side of their story

Finally, comes news that the Obama Administration worked to trash pensions of non-unionized auto workers while protecting pensions of union workers.

Democrats are labeling any plans that would cut or even flatten Federal spending as the "austerity" option.  They use the word austerity to imply an unusual and radical reduction in spending which evokes proposed plans in places like Greece that has all the government workers marching in the street.

But Greece is trying to find a way to move to a fiscal regime they have never even experienced, not in any of our lifetimes and maybe never.  In contrast, the US merely needs to move to a place it was way back in about 2006.  Yes, that's right, "austerity" is returning to the level of government spending we had five years ago.  And we all remember what a blighted time that was, a veritable Mad Max desolation relieved only by Obama arriving like the Postman from the David Brin novel (or the execrable Costner movie, if you prefer).

Via Cato:

My column this week in Forbes elaborates on a theme I discussed last week in this blog.

I am not a big fan of prohibition, or the income tax (16th Amendment) before it, but in some sense these come from a better time.  Instead of dealing with the Constitutional problems of these initiatives by having a series of judges stare at the Constitution with their eyes crossed until the problem disappears, they actually wrote and passed a Constitutional amendment.  The took the wording of the Constitution seriously.

Consider alcohol prohibition.  Today, would we even bother modifying the Constitution?  After all, we’ve driven a forty year war on drugs — with massive spending, highest in the world imprisonment rates, militarization of our police, and frequent slashes into the heart of the Fourth Amendment — with nary a hint of the need for a Constitutional Amendment.  In fact, in Raich, the Supreme Court ruled that medical marijuana legally (under state law) grown, sold, and consumed in California could still be prohibited by the Federal government under their Constitution powers to regulated interstate commerce.  It seems almost quaint today that we sought a Constitutional change for Prohibition.

The other day I was watching a show on extreme tax protesters, specifically those who believe the entire income tax system to be illegal and thus they actually owe no taxes.

While I am sympathetic to issues folks have with taxation, from a legal and Constitutional perspective the income tax actually comes from a better, almost more quaint time.  Why?  Because instead of dealing with the Constitutional problems with the income tax by having a series of judges stare at the Constitution with their eyes crossed until the problem disappears, they actually wrote and passed a freaking Constitutional amendment.  Granted that the amendment was passed under false pretexts (e.g. that the tax would never apply to more than the top 1% of earners or earners with less than $1 million in income).  But they sought an amendment.  The took the wording of the Constitution seriously.

In fact, the 18th Amendment (prohibition) and the 21st Amendment (its repeal) were the last times the Constitution has been amended to give or take away Federal powers (everything since has been related to voting and elections).  Ever since 1933, we have effectively added non-enumerated powers by essentially ignoring the Constitution, such amendment process being seen as too much of a hassle to stand in the way of critical regulations on seat belts or marijuana.

Everyone knows it took a Constitutional Amendment to get alcohol prohibition, but think about this in today's world.  Would we even bother?  No way!  Congress has taken on the power to regulate or prohibit just about anything it wants by stretching the commerce clause form its original meaning of preventing states from setting up barriers to interstate trade to an all-encompassing power of fiat to do anything Congress freaking wants.

My kids and I were watching 2081, the excellent short movie based on the Vonnegut short story "Harrison Bergerson."  That story posits a government department of handicapping that solves the inequality issue once and for all by handicapping the most able down to some lowest common denominator.

Anyway, the intro to the movie said it was based on something like the 280th amendment to the Constitution.   But I don't think we are ever going to get that high.  Certainly those who want more government power don't need any more amendments, as the Constitution is no longer constraining in the least and an increasing number of the Bill of Rights are either bad jokes (9,10) or are being gutted as we speak (2,4).

I don't expect another Amendment in my lifetime.  The only way I think we will see one is if we get some sort of libertarian revolution, and the only Amendment we would need would be the one saying "Look, we were't freaking kidding in the 10th amendment, go read it again."  OK, maybe some clarity on the commerce clause would be good as well.

I am not a big fan of the income tax, or of Prohibition, but it was a better world when we knew we had to at least amend the Constitution to do these things because we took the enumerated powers seriously.

The PJ Tatler has this bit on the arming of government bureaucrats:

Quin Hillyer discusses the increasing armed firepower of the federal government.  Most people expect agencies like the FBI to be well armed for law enforcement purposes.  But the Railroad Retirement Board?  He reports that federal agencies far and wide now have armed agents, including the Small Business Administration.  For what?  To scare away phony 8(a) applications??  The United States Department of Education bought 27 Remington Model 870 12-gauge shotguns last year

I have no insight into what is going on in these particular agencies.  But I can comment on another agency.  Nearly every state parks organization has seen a proliferation of law enforcement titles among its employees.  Seemingly every field employee nowadays needs to have a gun and a badge.  Why?

Well, there are those who say that this arms race is necessary to keep the parks safe against some mythical crime wave.  But I can say with some authority, since our company runs over 150 public parks across the country, that with very, very few exceptions, parks don't need this kind of on-site law enforcement support.  Most problems can be handled with on-site customer service employees, with the occasional call the the sheriff if things get rough.  In fact, customer service is actually improved without all the badges around.  Rangers with law enforcement credentials tend to solve issues with their visitors by issuing citations.  This is awful customer service -- I am sure McDonald's doesn't like it if someone messes up the bathroom or parks across two parking spaces, but you won't see them issuing citations to their customers.

The reason for this proliferation of law enforcement titles in parks is not demand for order, but incentives among employees.  In most states, getting a law enforcement title in a parks organization gives one an automatic raise, participation in the far-more-lucrative state law enforcement pension plan, and training that can be valuable when one leaves the parks organization.  Also, for some, it carries non-monetary benefits -- some folks think its cool to wield a gun and a badge.

I am sure everyone is resting easier now that the government has taken over all student loan activity.  Now we won't see any of that abusive behavior by private lenders.  Ha ha, just kidding.  Don't get behind on your government student loans! Via Radley Balko (Updates:  Still bizarre the DOE has this kind of firepower, but DOE says its a criminal / fraud case, not a payment issue.)

Kenneth Wright does not have a criminal record and he had no reason to believe a S.W.A.T team would be breaking down his door at 6 a.m. on Tuesday.

"I look out of my window and I see 15 police officers," Wright said.

Wright came downstairs in his boxer shorts as the officers team barged through his front door. Wright said an officer grabbed him by the neck and led him outside on his front lawn.

"He had his knee on my back and I had no idea why they were there," Wright said.

According to Wright, officers also woke his three young children ages 3, 7, and 11, and put them in a Stockton police patrol car with him. Officers then searched his house.

As it turned out, the person law enforcement was looking for was not there - Wright's estranged wife.

"They put me in handcuffs in that hot patrol car for six hours, traumatizing my kids," Wright said.

Wright said he later went to the mayor and Stockton Police Department, but the City of Stockton had nothing to do with Wright's search warrant.

The U.S. Department of Education issued the search and called in the S.W.A.T for his wife's defaulted student loans.

Apparently, Congressional Democrats are angling for yet another big stimulus spending bill.  Forget for a moment that the last one did nothing for the economy.  There still seems to be a mythology that infrastructure projects can rapidly be green-lighted.  For example,

"The American people, while concerned about the deficit, place much more emphasis on job creation, and they see a role for the government," Rep. Raul Grijalva (D-Ariz.) told The Hill. "A fast injection of job stimulus on the public side would help tremendously. … It [the job report] helps our argument about investment."

This notion of a "fast" injection of job growth is just absurd.  We can leave aside dueling economic models, and just consider for a moment what it takes to get an infrastructure project, say a bridge replacement, going.  In short, it takes years of design, planning, vendor selection, and permitting.  The protests from losing bidders and environmental opponents in the courts alone can take years.  That is why most of the first stimulus just was handed to state and local governments to help defer bureaucrat layoffs, rather than going to all those supposedly "shovel-ready" projects.  The only thing that turned out to be shovel-ready was the US debt ratings.

Here is an article I wrote in January, 2009 on why infrastructure projects can't be done quickly.  By the way, I tell a story from my own experience in Ventura County, CA, and all the time spent to date trying to get a minor building improvement permitted.  To this day in mid-2011, it STILL has not been fully permitted.  Every time we think we are done, a new division of the County pops up with its hand out for a check.

Update:  The main reason such stimulus spending does not work from a macro standpoint is that one is taking money out of private hands (either through taxes or crowding out private borrowing) which have strong incentives to employ the money productively and putting it into government hands that has strong incentives to employ the money politically.  Here is a Forbes article I wrote on the problem, and here is an interesting example of incentives problems related to the stimulus.

Living in Phoenix I know a number of people who work for Apollo (University of Phoenix).  They have obviously been appalled by the Obama war on for-profit colleges and the egregiously-flawed report that came out last year.  Several have told me they have complained for a while that certain hedge funds were pushing this initiative in order to make money off of short positions on their stock.  I thought this was a bit paranoid, but now the accusation is coming from third parties, even those on the Left:

A proposed regulation from the Education Department threatens to devastate for-profit career or trade schools, but one thing is even more controversial than the regulation -- how it was crafted.

Education Department officials were encouraged and advised about the content of the regulation by a man who stood to make millions if it were issued.

"Wall Street investors were manipulating the regulatory process and Department of Education officials were letting them," charged Melanie Sloan of a liberal-leaning ethics watchdog called Citizens For Responsibility and Ethics in Washington....

Among others, Sloan is referring to Steven Eisman, a hedge fund manager and a figure in the book "The Big Short," who testified in the Senate against for-profit career or trade schools, attacking them as "fundamentally unsound."

At the same time, he was betting that the stocks of those companies would fall, a practice known as short selling. "Making sure that they were going to be defamed and that their value was going to be depressed," said Harry Alford, head of the National Black Chamber of Commerce, who worries about the schools because they serve many minority students.

Simultaneously, through emails and conference calls, Eisman was advising Education Department officials -- and one White House adviser -- in detail on how best to write the new regulation, which he estimated would reduce the schools' earnings by as much as 75 percent.

The proposed regulation from the administration is aimed at what are known as career or vocational schools. The rule would cut federal aid to programs where student debt levels are deemed to be too high and where students are struggling to repay their loans.

In other news, everyone seems A-OK with kids in not-for-profit universities running up $200,000 debts to get such lucrative, workplace-ready degrees as women's studies, comp. lit. and poetry.

There used to be two Americas -- the small portion who were criminals and the large majority of law-abiding citizens.  Now there is just one America, since with the proliferation of regulations, we all are guilty of something.  If we fall out of favor, we can all be rung up on charges.

Local Conservative pundit Greg Patterson makes this observation about the looming Jon Edwards prosecution, and observes that as much as he may dislike Edwards, his prosecution is downright scary

It looks like former Presidential candidate John Edwards is about to get indicted. Edwards is an awful person who embodies the characteristics that most of us despise.  His hypocrisy and hubris together with his unbelievably boorish behavior while his wife was dying of cancer are the stuff of Greek tragedy.

However, Edwards' downfall is also a great example of how the US has so criminalized the political process that the Government can indict anyone who falls out of favor. Once it was clear that Edwards no longer enjoyed any personal political authority, prosecutors combed through his entire political history and found this charge:

Much of the investigation, however, focused on money that eventually went to keep mistress Rielle Hunter in hiding along with former campaign aide Andrew Young, who claimed paternity of Hunter's child in 2007 so that Edwards could continue his White House campaign without the affair tarnishing his reputation. Investigators have been looking at whether those funds should have been considered campaign donations since they arguably aided his presidential bid.

Really?  Someone gave Edwards a bunch of money so that he could hide his mistress...and those funds "arguably aided" his presidential bid? That means that every dime that any candidate has ever received could later be classified as a political contribution because it "arguably aided" his candidacy.

How many millions has Edwards spent defending himself from this charge?  How much time is he going to spend in jail?  How many other candidates--or contributors--can be indicted for falling out of favor?

By the way, kudos to Patterson for bringing up this point in the context of his political opposition.  All too often groups seek to establish terrible precedents in the name of counting coup on political opponents.  For example, I have been depressed at how hard certain of my fellow climate skeptics have labored to try to bring warmist Michael Mann up on criminal charges.

By the way, I disagree with the second half of Patterson's post, wherein he tries to draw a parallel between the Edwards affair and shenanigans and political payoffs around the Fiesta Bowl.  Patterson describes politicians as having been "victimized" by the Fiesta Bowl, such victimization taking the form of the politicians accepting luxurious trips to college football games and failing to do all the necessary reporting for these boondoggles.

I have a hard time seeing this as victimization.  It would take a really, really, really naive and stupid politician to credibly argue that these trips were purely fact-finding trips and that they had no idea these expenditures represented an effort of the Fiesta Bowl to woo them in return for various quid pro quo's.  Politicians should not even be considering public subsidies of college football games, particularly ones that are so incredibly lucrative to the schools and bowl organizations.  Politicians could have avoided being "victimized" by such lobbying by simply saying that their city/county/state was not going to be handing out taxpayer-funded goodies to sports teams and games.  I don't necessarily want to send these guys to jail, but calling them victims is a joke.

It is interesting to see this attitude from a Conservative.  My mother-in-law the Boston Liberal takes the same line, that the evils that result from lobbying and outright bribery are entirely the fault of private enterprises and not of the politicians themselves.  Of course, the libertarian position on this is simple -- the fault is not any particular person, but the changes in government power that have put so many chips on the table.   If the government has the power to give or take billions, to make or kill whole industries, then it is worth a lot of money for individuals to harness this power or at least to protect themselves from being gutted by those who do manipulate the power.  To this end, 19th century corruption arguments are almost quaint, where the biggest concern was politician's ability to appoint their friends as postmaster.  Reduce government's power to give and take arbitrarily, and the amount of money spent on lobbying, elections, and outright bribery will fall precipitously.

I can't go anywhere without analyzing operations and workflow -- there used to be a bagel store near my house whose work flow was so awful and inefficient it almost caused me physical pain just to be in the store.  In large part I owe my marriage to operations analysis, as I started going out with my wife when I was tutoring her on cycle times and other basic concepts.

So beyond the obvious privacy and invidual rights problems, TSA screening areas have always driven me nuts because they are so inefficient.  Yesterday I was putting on my shoes and belt after another run-in with the visible hand of the state, and it gave me time to watch the full body x-ray scanners for a while.  They had been bought in sufficient quantity to replace the metal detectors one for one, but there seemed to be a problem.

While people flowed through the metal detectors, at a rate of at least 15-20 per minute, the full body scanner seemed really slow.  In fact, I sat down and timed it for a while.  The scanner was working at a rate of 3 people per minute. This was with a queue at the front end so there was no waiting time for a new person to enter when the scanner was ready.  A couple of times it did 3.5 per minute, but never did it do 4 in a minute.    This seems like a real problem -- that capacity per lane has been reduced by a factor of 5 or so from the metal detectors.  Of course, it is a bit more complicated than that, because a parallel process of scanning the luggage in the x-ray machine has to complete simultaneously, and before the new scanners the x-ray was definitely the bottleneck.  But each time I went through this week my luggage sat complete on the x-ray machine before I finished being scanned, which suggests to me that the bottleneck has shifted, and we have spent a lot of money to slow down an already time consuming process.   That is why most airports have kept their metal detectors --they need them for overflow capacity.

Here is a second issue with the scanners -- they appear to take 3 times as much manpower.  The old metal detectors required one person.  The new machines appear to require 3 -- one person is at the machine, giving instructions; a second person watches you in a sort of holding area downstream of the machine as you wait for the scan results; and third person is somewhere out of site, on a radio, presumably looking at monitors and calling in results to the second person.  No wonder the TSA loves this technology - 3 times more staffing!

Economists Timothy Conley and Bill Dupor have produced a new study on the trillion dollar stimulus, and reached a few fairly unambiguous conclusions.

Our benchmark point estimates suggest the Act created/saved 450 thousand government-sector jobs and destroyed/forestalled one million private sector jobs.

This is exactly the problem many of use warned against -- that while a trillion dollars of expenditures would certainly employ some people, lost in all the discussions where how many people would have been employed had that trillion dollars been left in private hands.  Seriously, the single fact that Obama refuses even to publicly acknowledge that there is an offset on the other side of this ledger is enough, all by itself, to disqualify him from the supposed status of being "really smart."

Further, I warned way back in January of 2009 I looked at the stimulus line item by line item and found very, very little of it was actually the claimed "shovel-ready infrastructure" projects.  In fact, most were just bailout payments to state and local govenrments

So do you see my point. The reason so much of this infrastructure bill can be spent in the next two years is that there is no infrastructure in it, at least in the first two years!  42% of the deficit impact in 2009/2010 is tax cuts, another 44% is in transfer payments to individuals and state governments.  1% is defense.  At least 5% seems to be just pumping up a number of budgets with no infrastructure impact (such as at Homeland Security).  And at most 6% is infrastructure and green energy.  I say at most because it is unclear if this stuff is really incremental, and much of this budget may be for planners and government departments rather than actual facilities on the ground.

As of July of that year, we could write that "90 percent has gone to assist Medicaid and to stabilize tottering state budgets.  Apparently this trend continued, as the recent study concludes

It appears that state and local government jobs were saved because ARRA funds were largely used to offset state revenue shortfalls and Medicaid increases (Fig. A) rather than directly boost private sector employment (e.g. Fig. B).

This is the real post-election payoff to the SEIU - not visits to the White House, but the sacrifice of two private jobs to save one government job.

I have a hard time seeing how anyone can deny that drafted soldiers are slaves of the state.  They are giving their time and labor only under compulsion, and while they may be better off than ante-bellum slaves in that they may eventually get freed after their term is over, to some extent they may be worse off as their time in servitude is a) more dangerous and b) involves taking morally more questionable actions (e.g. killing people).

I have assumed that those who supported the draft either were arguing that that threats in wartime justified this awful step or they were statists that already saw all the rest of us as slaves anyway.

However, Bryan Caplan had a useful observation on this:

It's tempting to dismiss all this as doublethink, but after many years of reflection I think I finally figured out what most people are thinking.  Namely: They implicitly regard slavery not as mere involuntary servitude, but as low-status involuntary servitude.  Since most of us honor, respect, and even adore all our soldiers, conscripts have high status - and therefore can't be slaves.  From this point of view, saying "conscription is slavery" isn't righteously standing up for the rights of conscripts; it's wickedly denying them their high status.  Sigh.

This rings true to me, but offers another avenue for those of us who oppose the draft -- the draft reduces the perceived status of those who serve voluntarily, something I certainly think happened in the Vietnam War.  In a way, it is reminiscent of how the existence of affirmative action tends to undermine the perceived accomplishments of successful minorities.