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Government Spending

All articles with the "Government Spending" tag.

Published: Sat, 19 Aug 2017 00:00:00 -0400

Last Build Date: Sat, 19 Aug 2017 10:30:17 -0400


On Health Care, Private Sector May Show Congress the Way

Mon, 14 Aug 2017 16:15:00 -0400

Just because Congress can't fix health care doesn't mean it can't be done. That's the message from the Health Transformation Alliance, 41 big American companies that have banded together to try to save money and lives on their own, without waiting for Congress to pass a new law. The Alliance's chief executive, Robert Andrews, himself a former Democratic congressman from New Jersey, had a recent New York Times op-ed reporting on three steps being taken by the companies, which spend about $25 billion a year on covering about 6 million employees and retirees. One is using "big data" analysis to find patterns on which providers are delivering the best results. Another involves negotiating better deals with the medicine middlemen known as pharmacy benefit managers. A third will be setting up new medical networks in Dallas/Ft. Worth, Phoenix, and Chicago to treat back pain and diabetes and to provide knee and hip replacements. Andrews writes that the drug reforms alone "are projected to save participating companies, their workers and, in some cases, retirees at least $600 million over three years—while achieving the same or better results." Which raises one big question that he doesn't get into in the Times op-ed: if these savings are such a great idea and so easily achievable, why isn't the federal government doing these things? After all, government spends more than $1 trillion a year on Medicare and Medicaid. State budgets pick up some of the Medicaid costs, in ways that are threatening to crowd out other expenditures; in Massachusetts, for example, MassHealth consumes 40 percent of the state budget. In New York, Medicaid is one third of the state budget. At the federal level, Medicare, the health care program for the elderly, is about 15 percent of the total federal budget, about the same as what gets spent on defense. True, Medicaid reimbursement rates to doctors are already rock-bottom compared to private insurance. Some states are trying to save more money on the program. In Rhode Island, for example, where about 30 percent of the state budget is devoted to Medicaid, Governor Gina Raimondo, a Democrat, says she saved $75 million on Medicaid in 2016 and $120 million in 2017 "by reducing waste and increasing program efficiency and effectiveness." Even so, the private sector's leadership here highlights some structural differences between government and business that may help explain why progress by Congress has been so slow by comparison. One big difference is that what the private sector hails as "savings," in the public sector gets demagogued as "cuts." This is a bipartisan problem. Republican presidential candidate Mitt Romney repeatedly attacked Barack Obama and ObamaCare for having supposedly having "cut Medicare for current Medicare recipients." Romney described ObamaCare as a "Medicare-cutting monster." When President Trump proposed reductions in the rate of growth of health care spending, Hillary Clinton denounced Republicans as "the death party." Another big difference is the influence of interest groups, and their effect on incentives. If a CEO wants to save shareholders money by wringing better value from health care vendors, he or she is likely to be thanked with a bonus for increasing profits. Or the CEO's stock options will be worth more. When a politician tries to save taxpayers money by doing the same thing, big and powerful campaign donors and constituents and potential future employers—drug companies, doctors, their lobbyists, hospital board members, health care worker unions, medical device manufacturers, nursing home proprietors—push back hard in the other direction. The politician may decide the potential savings aren't worth the aggravation. What does that mean for health care cost and quality? A system in which government is the only buyer is likely to be more expensive. A system in which companies or groups of individuals are buyers may have more success in controlling costs without sacrificing quality. At the very least, the Health Transformation Alliance, a relatively new effort, bears watc[...]

5 Cities That Got F**ked By the Olympics

Fri, 04 Aug 2017 10:30:00 -0400

Host cities for the next two Summer Olympics have been finalized this week, Paris in 2024 and Los Angeles in 2028. They were the only two candidates for either Olympics. Both will be hosting the Summer games for a third time. Several cities expressed interest but ended up dropping out because, well, hosting the Olympics is a shit deal. Take it from the organizers in these five cities. You might be certifiably insane to want to host an Olympics. Athens 2004 Athens, birthplace of the ancient Olympics upon which the contemporary games are built, desperately wanted to host the modern centennial in 1996 (Athens was also the host in 1896), but lost out to Atlanta. Eight years later it hit the jackpot. Preparation for the 2004 games marked the beginning of Greece's contemporary spending binge. The Greek government hadn't balanced a budget in nearly 40 years, but it got a lot worse after the Athens Olympics. The games cost $11 billion, twice the original estimate, driven, in part, by gross mismanagement and last-minute preparations. Security alone cost $1.2 billion. Just six years after the games, more than half the venues built for the event were underused or empty. Ten years after the games, most of the venues were abandoned—unfilled swimming pools, overgrown stadia, and graffiti-laden monuments, a warning for any city contemplating hosting an Olympics in the future. "I feel vindicated, but it's tragic for the country," Greek anti-Olympics activist Stella Alfieri told CNBC in 2010. "They exploited feelings of pride in the Greek people, and people profited from that. Money was totally squandered in a thoughtless way." Sochi 2014 At nearly $50 billion, the Sochi Winter Olympics were the most expensive in Olympics history, costlier than the previous 21 Winter games combined. No small feat, made possible with a big assist from rampant corruption, or, as Kremlin critic Boris Nemtsov put it, the "out-of-control, absolutely immoral behavior of the authorities." A 2013 report by Nemtsov and Leonid Martynyuk, another political activist, estimated that $21 billion of the cost up to that time had been swallowed up by "embezzlement and kickbacks" to Putin's inner circle of businessmen friends. "The Games are nothing but a monstrous scam," he said at the time. Nemtsov was assassinated in 2015. The Sochi Olympics exacted significant human cost. Authorities evicted and rarely compensated residents from homes in the way of construction plans, something common for the Olympics games. "The whole place resembles nothing so much as a Communist-era construction project," The Economist wrote of Sochi half a year before the games were set to open. "Cost, efficiency, nature and human lives never stood in the way of Soviet rulers who reversed Siberian rivers, built cities in permafrost and planted corn in virgin land—often to ruinous effect." Sochi was even worse, according to The Economist: "the amount of public money it will cost makes Soviet projects pale in comparison." Rio de Janeiro 2016 Protesters in Brazil took to the streets before the start of the 2016 Summer Olympics to demand the impeachment of President Dilma Rousseff and the prosecution of her predecessor, Ignacio "Lula" da Silva, who was president of Brazil when Rio was awarded the 2016 Olympics. Protesters got their way—Rousseff was removed from office at the end of August, just 10 days after the Olympics, and earlier this year da Silva was convicted on corruption charges. The Olympics were not the primary reason for Rousseff's dramatic loss of popularity, but along with the 2014 World Cup, they helped illustrate how disconnected her government was from the general public. In addition to the demolition of poor favelas, or neighborhoods, the Olympics highlighted how willing was a government that considered itself populist to spend money on prestige rather than social services, even as the economy shrank. The outbreak of Zika, and the government's perceived inaction to address it, cast a pall, making it a poorly-attended affair Cariocas, and Brazilians [...]

Stossel: $2 Million Bathroom

Fri, 04 Aug 2017 10:00:00 -0400

John Stossel investigates a New York City park bathroom that cost $2 million to build.

For that price you might expect gold-plated fixtures—but it's just a tiny building with four toilets and four sinks.

New York City Parks Commissioner Mitchell Silver says $2 million was a good deal because "New York City is the most expensive place to build."

He estimates that future bathrooms will cost more than $3 million.

Commissioner Silver argues that this park, on the outskirts of Brooklyn, will get so much use that it must be built to last, and that can be expensive.

Yet privately managed Bryant Park, in the middle of Manhattan, gets much more use and its recent bathroom renovation cost just $271,000.

Since government spends other people's money, it doesn't need to worry about cost or speed. Every decision is bogged down by time-wasting "public engagement," inflated union wages, and productivity-killing work rules.

Two million dollars for a bathroom. That's your government at work.

Edited by Joshua Swain.

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Remy: $20 Trillion Reasons (Lady Gaga Parody)

Thu, 03 Aug 2017 13:12:00 -0400

Remy tries his best to explain why the nation's debt is reason enough to curtail government spending.

Lady Gaga parody written and performed by Remy
Music tracks and background vocals by Ben Karlstrom
Video by Meredith Bragg

Why can't we buy these tanks the Army says they don't need
Why can't we buy these solar-powered abortion machines
Uh, sir, there's 20 trillion reasons
You have 20 trillion reasons
We got 20 trillion reasons
About 20 trillion reasons

Why can't we build a border wall that touches the skies
Stay on our momma's healthcare until we're 45
We got 20 trillion reasons
You have 20 trillion reasons
We got 20 trillion reasons
About 20 trillion reasons

We took centuries
to reach 10, now I fear we're gleaning
Debt is like this guy
it should be nowhere near the teens and
now we've got about 20 trillion reasons to stop today
But maybe if we just spend one more we'll stay

Twenty trillion dollars stacked together just might reach to the sun
Uh, so
It could even last Johnny Depp for over a month
Dear God
We got 20 trillion reasons
They got 20 trillion reasons
You have 20 trillions reasons
We have 20 trillion reasons

Could we pay off the tab by buying unneeded jets
Or just identify as being not that in debt
We'd still have 20 trillion reasons

Still the 20 trillion reasons
Still have 20 trillion reasons
Over 20 trillion reasons

I've paid social security since I was first hired
Will that program still exist on the day I retire

I forgot my car
It's parked in the two hour parking
Lord, show me the way
I think I hear my third wife carping
I got a pot of sauce I left on the oven range

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Trump Budget Full of Spending Increases

Wed, 02 Aug 2017 00:15:00 -0400

Remember President Trump's "terrible" budget cuts? "Promises Little but Pain," warned The New York Times. "Harsh and shortsighted," cried The Washington Post. Then Congress passed a budget. President Trump signed it. Do you notice the "pain"? I follow the news closely, but until I researched this column, I didn't know that Congress actually raised spending on the very agencies Trump wanted to cut. Trump called for a $4.7 billion dollar cut to the Agriculture Department. Congress increased the department's appropriation by $12.8 billion. He called for a $15 billion cut to Health and Human Services. Congress instead gave them $2.8 billion more. Trump wanted a $6.2 billion cut to Housing and Urban Development. Congress gave HUD a half-billion-dollar increase. Trump wanted the Commerce Department's budget cut by $1.4 billion. Congress made no cut. And so on. Why wasn't that news? Because in Washington, and in the media's eyes, spending increases are expected. And cuts are always "terrible." America continues on its road to bankruptcy. What will those departments do with their new money? The Agriculture Department says its mission is to "promote agricultural production that better nourishes Americans." Politicians claim we need the department to guarantee an adequate food supply. Nonsense. Because of the free market, agricultural entrepreneurs provide plenty of food. Fruit and vegetable farmers rarely get subsidies, but there are ample supplies of fruits and vegetables. We don't need an Agriculture Department any more than we need a Hollywood Movie Department or iPhone Department. Most of what the department does is corporate welfare. America's richest corn and grain farmers collect most of the money. Politicians eagerly give money to people who visit their offices and pour out tales of need. Corn and grain farmers visit and whine because they have millions of dollars at stake. You don't visit because each subsidy costs you just a few bucks. So the corporate welfare continues. Members of Congress might stop the wasteful spending if they spent their own money. But they don't. They spend ours. Congress ignored Trump's request to cut the Commerce Department, too. Commerce's biggest program is NOAA, the National Oceanic and Atmospheric Administration. NOAA pushes climate change alarmism, producing PSAs that warn Arctic ice is "thinning at an alarming rate!" If that's a serious problem, NOAA's spending won't stop it. NOAA's bureaucrats got caught buying a $300,000 yacht—and using it to go fishing. The department says what they do is "critical." They fund "centers in every state that consult with companies facing technological problems." Government is good at fixing tech problems? News to me. The department claims "every dollar of federal investment ... generates around $30" because each "$2,400 investment" creates a job. I'm sure they help some politically savvy companies, but their claim ignores the good things your money would have done had it stayed in the private sector. That's the unseen cost of funding every department. We'll never know what our dollars might have done had they not been taken from us by government. Maybe a new Steve Jobs would have invented a... I don't know. We'll never know, because government grabbed the money. President Trump seems to understand that government wastes money, but after proposing cuts to some departments, he was eager to increase military spending. So Congress did. The military got the biggest increase. Defense, at least, is a proper role of government. Government should keep us safe. But our current military is wasteful and involved in needless foreign entanglements. We spend as much as the next seven countries combined—eight times more than Russia spends. Many of the missions our politicians give the military—interventions in places like Iraq, Libya and Syria—made us less safe by destabilizing the Middle East and creating new terrorists. Congress should cut spending to th[...]

Justice Department Again Threatens to Snatch Federal Grants from Sanctuary Cities

Wed, 26 Jul 2017 15:45:00 -0400

The Trump administration keeps trying to punish sanctuary cities that don't cooperate in enforcing federal immigration policy, even though the feds don't have the authority to demand all that much. The latest news is that the Department of Justice will attempt to tie a federal crimefighting block grant fund to three demands. Cities or states that want to receive the money must do the following: Prove compliance with federal law that bars cities or states from restricting communications between the Department of Homeland Security (DHS) and Immigration and Customs Enforcement (ICE) about the immigration or citizenship status of a person in custody. Allow DHS officials access into any detention facility to determine the immigration status of any aliens being held. Give DHS 48 hours' notice before a jail or prison releases a person when DHS has sent over a detention request, so the feds can arrange to take custody of the alien after he or she is released. At stake is access to money from the Edward Byrne Memorial Justice Assistance Grants (Byrne JAG) Program, which distributed nearly $275 million in federal funds to state and local law enforcement agencies in 2016. The first demand is not new. It refers to the only federal law that truly matters when we're talking about sanctuary cities. States and cities cannot be forced to assist DHS and ICE in detaining and removing people who are in the country illegally. Detention "orders" are actually just "requests." When the Department of Justice actually began investigating sanctuary cities, it turned out that only a handful were even potentially operating in defiance with the federal law referenced above. Only eight cities and one county have policies that conflict with the federal law and block law enforcement officers or other government officials from communicating with the feds about an alien's immigration status. That's it. The second and third demands are essentially acknowledgments that cities can't be forced to assist. Instead, they're being told to get out of the way if they won't help. President Donald Trump has already attempted once, via executive order, to threaten to withhold federal grant funding from sanctuary cities. A federal judge blocked that order because it was overly broad, lacked due process, violated the Tenth Amendment, and violated the separation of powers between the legislative and executive branches. This new guidance is more narrowly tailored, since the Department of Justice has leeway in how it distributes the grant money. But note that the funding is for all sorts of crimefighting and court projects that have nothing to do with immigration enforcement. Some of it also goes to things like drug task forces and prohibition-fueled nonsense, so maybe losing some of that money is for the best. Obviously, the Justice Department is hoping the threat will create enough of a wedge between law enforcement agencies and their ruling cities and states to force cooperation. Trump and Attorney General Jeff Sessions remain heavily invested in trying to convince (or assure) their basis that illegal immigrants are a threat to Americans. Sessions in his announcement of this new guidance cynically attempted to blame the existence of sanctuary cities for the terrible weekend human trafficking tragedy where 10 people died after being stuck in the trailer of a truck in a San Antonio parking lot. But it's not sanctuary cities that cause human trafficking. The trafficking is the direct result of how difficult the federal government makes it for immigrants to cross borders legally. Meanwhile, in a speech in Ohio last night, Trump presented illegal immigrants essentially as the monsters under your teenage daughters' beds: The predators and criminal aliens who poison our communities with drugs and prey on innocent young people, these beautiful, beautiful, innocent young people will, will find no safe haven anywhere in our country. And you'v[...]

Good Intentions, Bad Outcomes: The Story of Government

Wed, 26 Jul 2017 12:00:00 -0400

If we judged everything by intentions rather than results, the world would be a strange place indeed. Steve never calls his mother on her birthday, but he always means to, so isn't he a wonderful son? That goes for government as well: If we judged laws only according to what their sponsors intended, then every law and every program that has ever been enacted has been an unqualified success. After all, nobody intends for things to go wrong—right? And yet things do go wrong. The news is full of examples. Take civil asset forfeiture, one particularly dubious form of which Attorney General Jeff Sessions is reviving. The intention behind civil asset forfeiture—a practice in which the government seizes the property of suspected criminals—is brilliant: Confiscate the ill-gotten gains, auction them off, and then use the proceeds to finance investments in law enforcement. Using criminals' own resources against them: It's law enforcement jiu-jitsu! It's also an unmitigated disaster. In practice, giving police officers a financial incentive to seize people's property without having to bring any criminal charges against them is a recipe for wanton abuse. Thousands of innocent Americans have been robbed at the hands of the very people who are supposed to be protecting them. The problem has grown beyond repeated congressional efforts to contain it. It has even grown so bad that two of the originators behind the idea have called for an end to forfeiture because "government self-interest corrupted a crime-fighting tool into an evil." Not every case is quite so extreme. But many are still bad enough. Consider a Kentucky program aimed at reviving poor rural areas by retraining workers to become computer programmers. The effort to breathe new life into the coalfields was part of President Obama's TechHire Initiative, and was conducted in concert with the Appalachian Regional Commission. According to a report from The Daily Signal, the job-training program was intended to turn out 200 skilled workers who could write code for smartphone apps and similar high-tech ventures. But the effort has fallen short: After $1.6 million, only 17 program participants have landed tech jobs. Some are quite happy with where they landed, but others who went through the program are not: "I am now in a job that has absolutely nothing to do with programming," says one. A spokesman for the company contracted to provide the training says the company isn't to blame: There were "more challenges than expected when it came to personal development and growth," she said, citing a lack of "basic business environment skills" such as personal attire and communication. But once you set aside the question of whether former coal miners clean up nicely, there's still the grim fact that a federal program to help communities partake in the 21st century economy could scare up fewer than 20 jobs. That's swell for the individuals, but it's not going to bring an entire geographic region back to life. Virginia gubernatorial candidate Ralph Northam—who has his own plans for reviving rural Virginia with "new-collar" jobs—might want to take note. The Trump administration, which has proposed shutting down the Appalachian Regional Commission, also recently announced that it would be cutting $100 million in grants for teen pregnancy prevention. This promptly led to an epidemic of pearl-clutching at media outlets that think the surest cure for any problem is a tractor-trailer full of somebody else's money. But as The Federalist's Mollie Hemingway pointed out, the programs funded by the grants are remarkably ineffective. The Department of Health and Human Services' own analysis found that many of them either (a) did not reduce rates of teenage sexual activity, unprotected sex, sex without birth control, or pregnancy or (b) reduced the rates only for a short while. In one case, girls who went through the funded program ac[...]

NYC Government Spends $2 Million on a Park Bathroom

Wed, 26 Jul 2017 00:15:00 -0400

Did you see the $2 million dollar bathroom? That's what New York City government spent to build a "comfort station" in a park. I went to look at it. There were no gold-plated fixtures. It's just a little building with four toilets and four sinks. I asked park users, "What do you think that new bathroom cost?" A few said $70,000. One said $100,000. One said, "I could build it for $10,000." They were shocked when I told them what the city spent. No park bathroom needs to cost $2 million. An entire six-bedroom house nearby was for sale for $539,000. Everything costs more when government builds it. "Government always pays above-average prices for below-average work," says my friend who makes a living privatizing government ahctivities. Obamacare's website was supposed to cost $464 million. It cost $834 million and still crashed. Washington, D.C.'s Visitor Center rose in cost from $265 million to $621 million. The Veterans Affairs medical center being built near Denver was projected to cost $590 million. Now they estimate $1.7 billion Government spends more because every decision is tied up in endless rules. Rigid specs. Affirmative action. Minority outreach. Wheelchair access. "The process is designed to prevent any human from using judgment, or adapting to unforeseen circumstances," says Philip Howard of the government reform group Common Good, adding, "The idea of a commercial relationship, based on norms of reasonableness and reciprocity, is anathema." But New York City's bureaucrats are unapologetic about their $2 million toilet. The Parks Department even put out a statement saying, "Our current estimate to build a new comfort station with minimal site work is $3 million." "$3 million?!" I said to New York City Parks Commissioner Mitchell Silver, incredulously. "New York City is the most expensive place to build," he replied. As a result, "$2 million was a good deal." I pointed out that entire homes sell for less. He said, "We built these comfort stations to last... Look at the material we use compared to that of a home. These are very, very durable materials." They have to be, he says, because the bathroom gets so much use. "We're going to expect thousands, if not hundreds of thousands of visitors... So we have to build it to last." Yet not far away, Bryant Park has a bathroom that gets much more use. That bathroom cost just $300,000. Why the difference? Bryant Park is privately managed. New York politicians also order contractors to pay "prevailing" wages. That usually means union wages, and that adds 13-25 percent to all bills. When I asked Commissioner Silver about that, he said, "This is a city that does believe strongly in labor." New York Democrats act as if "labor" means union labor. It's an insult to laborers. Most don't belong to unions. Unions, however, fund Democrats' campaigns. Since government spends other people's money, they don't care that much about cost and they certainly don't care much about speed. Many Parks Department projects are years behind schedule. Commissioner Silver says he's made improvements. "We've now saved five months out of what used to be four years." "That's still terrible!" I said. "We believe strongly in engaging the public," he replied. "We have a process that includes design, procurement and construction." But so does the private sector, which gets the job done faster. Silver added: "[Privately managed] Bryant Park did a renovation... We do it from the ground up!" But no one forced the city to build from the ground up. Anyway, renovation can cost as much as new construction. Governments just spend more. Sometimes, people get so fed up that they take matters into their own hands. Toronto's government estimated that a tiny staircase for a park would cost $65,000-$150,000. So a local citizen installed a staircase himself. Cost? $550. Did the bureaucrats thank him? No. They say they will tear [...]

Stossel: Departments Grow and Cherries Rot

Tue, 25 Jul 2017 09:30:00 -0400

John Stossel investigates what government agencies actually do and finds out that your tax money goes to ridiculous things.

The Agriculture Department actually forces farmers to dump cherries on the ground so you pay higher prices at the supermarket.

President Trump wanted to cut the budgets for many government departments – like the Commerce Department and the Agriculture Department. But Congress increased spending on the very departments Trump wanted to cut.

Departments that almost nobody knows what they even do.

John Stossel investigates and finds a ton of waste. The departments blow your money on welfare for the rich, global warming hype, and destructive regulations.

Ed Stringham, President of the American Institute for Economic Research, tells Stossel about how the Agriculture Department even forced one farmer to dump cherries on the ground and let them rot. The government wanted to keep the price of cherries higher, which helps some cherry farmers.

Stossel agrees with founding father Robert Morris, who once said, "for heaven's sake, what is meant by a [government] chamber of commerce?"

Produced by Maxim Lott. Edited by Josh Swain.

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Can a Governor Save Rural Regions? Should He?

Wed, 19 Jul 2017 12:00:00 -0400

When the final days of the Virginia gubernatorial contest arrive and you find yourself hurling vases at the television because you're sick of snarling attack ads, just remember: The candidates offered much substance back in summer. Republican Ed Gillespie has laid out extensive policy proposals on taxes and the opioid crisis, for example. Yesterday, Democrat Ralph Northam unveiled his plan for economic growth in rural Virginia. You can understand why he did. While the crescent from Northern Virginia through Richmond and over to Hampton Roads holds the bulk of the state's vote, rural areas will be key to the GOP effort, and if Northam can make inroads there, he could sew up the contest by October and coast to victory. And you can understand why his plan would appeal to voters in the rural southwest, what with the decline of the coal industry and so on. Still, it's worth digging a little deeper into Northam's plan and the premises behind it. "When I travel around the commonwealth," Northam writes, "I hear a lot of folks say they're from rural Virginia, but not enough who say they've stayed in rural Virginia. And that's what we need to fix." It is? Why? One possible reason: There is intrinsic value in keeping the region populated. But that doesn't seem very plausible. If anything, you could argue that, environmentally speaking, it might be better to keep some swaths of the state unpopulated. A more plausible explanation is that the government should help the residents of Southwest Virginia. But are they better off staying there? If they can improve their economic circumstances by moving to urban areas, then why not let them? Of course, some people in Southwest Virginia might want to improve their economic circumstances and still stay put. But is it the state's job to ensure they can? And if the answer is yes, then what does that imply about, say, struggling economic sectors? Should the state help people stay in fading industries as well as fading regions? If not, why not? The other day The Washington Post reported on the federal flood insurance program, which has racked up $25 billion in debt. The story cited a $56,000 house in Baton Rouge that, thanks to repeated floods, has run up almost $429,000 in claims. Another house, in Mississippi, is valued at $90,000 and has collected more than $600,000 in claims. Critics of the program say it encourages people to stay in place when what they really need to do is move. The point could apply to more than just flood plains. Northam also says the "top concern" he hears from large manufacturers and economic developers is "whether we have the skilled workforce necessary to grow and attract new jobs and industries." To address that concern, he wants to create "flexible, business-oriented workforce training programs across the commonwealth" that can teach people the "unique skillset(s)" that are "oftentimes required to meet that company's needs." Northam isn't suggesting anything we haven't heard many times before. But the idea does raise two questions—one practical and the other philosophical. The practical question is whether skill-specific training will help workers as much as it's cut out to. The New York Times recently noted a new study in the Journal of Human Resources that suggests technological and other changes often leave skill-trained workers behind—and rather than retrain them, employers often let them go and bring in new talent. As one of the authors of the research put it, the real need is "for more general cognitive skills that give workers the ability to adapt to new circumstances and new jobs." That's the practical question. The philosophical one is this: If companies need workers who are trained to perform specific tasks, then why don't those companies do the training themselves? Why should the state—i.e., the taxpayers—[...]

5 Cities That Won't Be Hosting the 2024 Olympics, and Why That Makes Them Winners

Fri, 14 Jul 2017 16:00:00 -0400

The International Olympics Committee (IOC) announced this week that the 2024 Summer Olympics would be awarded to either Paris or Los Angeles, the only two cities bidding for the games. The other city would be awarded the 2028 Summer Olympics. It's a far cry from the 1990s, when the IOC had six cities to choose from for the 1996 Summer Olympics and five for the 2000 Summer Olympics. City residents, especially in democratic countries, are starting to figure out what a rip-off hosting the Olympics can be. Every Olympics games since 1960 for which data is available has faced cost over-runs, with the Summer Olympics costing an average of 176 percent more than the original estimates. Additionally, as a 2015 paper in World Economics points out, "short-run costs for venue construction and operations invariably exceed Games-related revenues by billions of dollars and long-term gains are elusive." The IOC has also squeezed host cities out of other ways to make money off hosting the Olympics. In the 1990s, for example, the IOC took just a 4 percent cut of the revenue from the TV rights, but now it takes more than 70 percent. It seems the best way for a city to win on the Olympics is to decline to bid. Here are five cities that will be better off for not hosting an Olympics in the next decade: Boston Boston's bid had the support of local and state government when the U.S. Olympics Committee (USOC) chose it as the American city that would bid to host the 2024 Summer Olympics. The state legislature had set up a "feasibility commission," members of which were appointed by the state governor, state senate leaders, and the mayor of Boston. The commission concluded that hosting the Olympics was a "monumental" but "feasible" task that the region was better prepared to handle than other parts of the country. In 2015, the organizers of the Boston bid released the salaries of its executives. The public thus learned that former Gov. Deval Patrick, who had been involved in the feasibility commission, would be paid $7,500 per day of travel on behalf of the bid, and that Boston 2024 would be spending at least $120,000 a month on consulting firms. Public opinion had already been turning on the Olympics bid, with complaints that there had been no space for public input before the USOC selected Boston as the American bid city. When the decision was announced in January 2015, polling found support in Boston for hosting the Olympics at 51 percent and opposition at 33 percent. By the end of March, support had plummeted to 33 percent. As explains in a detailed timeline, this reflected not just the salary revelations but the heightened sensitivity to government incompetence in the wake of crippling winter snowstorms. Eventually, Mayor Marty Walsh admitted he hadn't read the entire bid proposal before pitching it to the USOC. In July, two members of the city council threatened to issue subpoenas to get copies of two redacted chapters of Boston 2024's bid books. By the end of the month, Walsh had withdrawn his support for the bid, saying he would not sign the host city contract. The USOC in turn withdrew its support and backed Los Angeles instead. The grassroots campaign No Boston Olympics was also crucial to the bid's failure. Its activists campaigned against the bid after it became official, and they declared victory when the bid was withdrawn. "Boston is a world-class city," a statement from the group read, adopting a phrase frequently used by the bid's supporters. "We are a city with an important past and a bright future. We got that way by thinking big, but also thinking smart." Hamburg When deciding whether to back Berlin or Hamburg for the 2024 games, the German Olympics Sports Confederation surveyed residents in both cities. It found higher support in Hamburg, but by t[...]

Chris Christie Enjoying a Public Beach During a Government Shutdown Is What Politicians Do

Mon, 03 Jul 2017 13:25:00 -0400

(image) Gov. Chris Christie (R-N.J.) took his family to his government beach home over the weekend while state beaches were closed for a budget-impasse-induced government "shutdown." A journalist snapped photos of Christie and family on the otherwise empty beach, producing a PR disaster. Chris Cillizza, a political analyst at CNN, tweeted that Chris Christie's "tone-deafness" was "truly remarkable."

But was it really?

Christie's electoral career is over. His approval rating in New Jersey is scraping the bottom of the barrel. He can't run for governor again, and New Jersey hasn't elected a Republican to the Senate since 1972. Unconstrained by the need to face the voters again, he isn't tone-deaf so much as he's revealing his true self.

That true self is pretty typical of politicians. As Lawrence Reed wrote last year, the bigger a government is, the less likely it is to attract office-seekers who are "honest, humble, fair, wise, independent, responsible, incorruptible, mindful of the future and respectful of others." Lord Acton noted that power corrupts more than a century ago, and his premise has been tested scientifically.

The fact that Christie's actions caught so many political reporters by surprise illustrates the myths the political class like to tell each other—prime among them, that politicians have some innate sense of decency. The rise and success of Donald Trump should have dispelled that idea, but evidently it hasn't. They see Trump as something totally different from most previous politicians, not as a distilled version of what came before.

Christie's senioritis illustrates another problem. The New Jersey governor already has a government home: Drumthwacket, a mansion outside the state capitol. Why the hell does he need some beachfront property too? In a sane world, Christie's historic unpopularity would create the momentum for scaling back the governor's perks. But that would require a shift in attitude toward the people attracted to high office. It would require people like Cillizza to recognize that Christie isn't an aberration; he's the norm.

The Illusory Savings From Cutting Medicaid

Sun, 25 Jun 2017 00:00:00 -0400

When economists talk in their sleep, they say, "There is no such thing as a free lunch." This axiom is drilled into them from day one of their undergraduate education and never leaves their minds. Any economist who tried to deny it would find herself suddenly choking in pain and unable to speak. What it means is that if the government does something that costs money, some human somewhere will bear the expense. "Free" public schools, "free" parks, and "free" roads all have to be paid for by the citizenry. Collectively, we can't get something for nothing. This useful insight has long been offered as an objection to costly government programs. But it applies as well to measures that extract savings from costly government programs. In their replacement of Obamacare, congressional Republicans promise to achieve greater frugality in Medicaid, which helps low-income Americans, without inflicting more hardship. The melancholy truth: Not gonna happen. Last year, total spending for Medicaid amounted to $533 billion. Nearly two-thirds of the funds come from the federal government, and the rest comes from the states. Some 69 million people are covered by it, up from 54 million in 2012. The expansion was intentional. Under the Affordable Care Act (ACA), Washington signed on to cover 100 percent of the cost of expanded coverage at the outset, with its share falling to 90 percent from 2020 on. The health care plan offered by Senate Republicans, like the one passed by the House, would reverse the trend by giving states a certain amount per Medicaid recipient or a block grant for a fixed amount. Either way, the federal contribution would steadily shrink compared with what it would do under the ACA. Under the House plan, the federal savings would amount to $880 billion over a decade. The Senate bill is supposed to wring out even more. Supporters say Medicaid enrollees would be better off because states would be free to redesign their programs to make them more efficient and responsive to beneficiaries. But remember that fundamental economic proposition. Just as you can't get something for nothing, you generally can't get more for less. The House changes, according to the nonpartisan Congressional Budget Office, would reduce the number of people on Medicaid by 14 million by 2026. Many people who now have coverage would lose it, and many who would have become eligible would be turned away. States could always protect the vulnerable by boosting their contribution to make up for the lost federal funds. But that would mean requiring their taxpayers to foot the bill. Republicans say the changes would be positive because Medicaid coverage is often useless. House Speaker Paul Ryan claims that "more and more doctors just won't take Medicaid." In fact, 69 percent of physicians currently accept new Medicaid patients, and the percentage has been stable for decades. It's lower than for privately insured patients, because Medicaid provides doctors with lower reimbursements, but budget cuts would probably exacerbate that malady. Some recipients would get cut off under the GOP plans, and some would get less coverage. That—surprise!—would leave them worse off, because comprehensive health insurance is a good thing to have. Medicaid coverage, reports the Kaiser Family Foundation, is proven to ensure "earlier detection of health and developmental problems in children, earlier diagnosis of cancer, diabetes, and other chronic conditions in adults, and earlier detection of mental illness in people of all ages." Cutting back Medicaid coverage would save taxpayers some cash, but only by taking it from others. The reduction would raise costs for low-income people and most likely degrade their health. It would also increase the financial [...]

California Lawmakers Spend More, Avoid Reform

Fri, 23 Jun 2017 00:30:00 -0400

Legislators in California announced a budget deal last week that spends a record $125 billion in the general fund. But most interesting isn't what's in the deal, but what isn't. There's plenty of new spending, of course, but not so much that it outpaces the rate of inflation. There are controversial "trailer" bills that attempt to change the rules in an ongoing recall election and take away power from elected members of the Board of Equalization, the state's tax board. Missing are any attempts at serious reform of existing government programs or ways to stretch the already hefty tax dollars Californians send to Sacramento. The budget's authors talk quite a lot about funding important priorities, especially the public-education programs that consume an awe-inspiring 43 percent of the general fund. Yet Gov. Jerry Brown (D) and the Democrat-dominated Legislature refuse to confront the main reason such programs typically are so costly and ineffective: public-sector unions. These unions are so powerful that they stifle cost-saving reforms in every conceivable area of government – from the prison system to policing to transportation programs to the public school and college systems. Union work rules don't allow for experimentation and creativity, or even the firing of poorly performing employees. The state is thus left with just one approach: throwing more money at the problem. This is why every year's budget kerfuffle centers on figuring out ways to come up with more money to spend in the exact same ways. The only difference this year is, because of Democratic supermajorities in both houses of the Legislature, the state now plans to spend more than ever. What else would you expect, given that the minority party has no power to thwart such efforts? The investigative news site CALmatters provides perhaps the best example of the disconnect between higher spending and better outcomes, noting in a June 18 report that there's no evidence the tens of billions of dollars the state has pumped into failing schools under its new public education system have done much of anything to help the most disadvantaged students. The investigation found "the biggest districts with the greatest clusters of needy children found limited success with the policy's goal: to close the achievement gap between these students and their more privileged peers. Instead, test scores in most of those districts show the gap is growing." The same is true for myriad programs, but as the single largest chunk of the budget, any failures in the K-14 education system certainly have the deepest financial ramifications. As I reported recently for the California Policy Center, while voters in the Los Angeles Unified School District and elsewhere are supporting candidates who back expanded access to charter schools for poor children, state legislators are backing legislation pushed by the California Teachers' Association that would make it much harder for locals to start such schools. Charters operate with less funding than comparable school districts, yet often (but not always, of course) show remarkable progress in closing the achievement gaps that aren't being closed by truckloads of new state spending. Think of it this way: If a system is failing, there's little chance that giving the same agencies more money to do things in the same way will yield significantly different results. It's obvious, but not to legislators or Gov. Brown. The budget deal also includes a provision that lets the state borrow $6 billion from a short-term investment fund to pay down some of California's growing pension debt. It's another example of the state's money-dumping approach to a massive financial problem. Instead of taking aim at overly [...]

Trump's New Line on NATO: Expensive, But Worth It!

Fri, 09 Jun 2017 20:38:00 -0400

Candidate Donald Trump delighted some and depressed others with a seeming willingness to rethink the necessity of our NATO alliance. He worried out loud about how much it cost us versus how little it cost our allies, most of whom are not living up to their commitment to spend 2 percent of their GDP on their military. He even called NATO straight-up "obsolete" in the post–Cold War, war on terror age.


Today Trump gratified NATO fans by saying out loud that of course we will always live up to our obligations under its Article 5, the most dangerous part, requiring us to come to the defense of any ally in case of attack (even, say, countries like recent entrant Montenegro, a corrupt nation, home to illegal arms smuggling and dealings and on the edge of many potential conflicts with neighbors).

In keeping with Trump's general fecklessness about spending, he uses NATO—in his eyes that once-obsolete alliance in which our fellow members took advantage of us—as an excuse for more U.S. spending.

As Huffington Post reports today, Trump said at a Rose Garden press conference this morning that our need to go to war in defense of our NATO allies is "one of the reasons that I want people to make sure that we have a very, very strong force by paying the kind of money necessary to have that force."

Our NATO commitments and expenses of billions and over 60,000 troops may reasonably seem less than relevant to actual U.S. security concerns in the age of the war on terror. But when it comes to keeping the military spending ball rolling to crushing debt and beyond, Trump will go along, any earlier rhetoric questioning spending or commitments ignored.