I've had a perfectly wonderful evening. But this wasn't it.
Groucho Marx
Whack-a-Mole
Yes, I know technically the arcade redemption game is technically spelled 'Whac-a-Mole'. This is the first in an as-needed series designed to bash annoying repetitive progressive nonsense.
This premiere commentary deals with austerity. I've been counting to a few thousand now, as I've heard one progressive after another bash ANY INSTANCE OF GOVERNMENT COST-CUTTING as traumatic, economically-crippling austerity! To a fiscal hawk like me, it's morally outrageous.
OF COURSE, people in Europe or the US like free stuff coming out of someone else's pocket! But there's no such thing as a free lunch. If the cost of the lunch you want is not within your budget, you either make more money to afford the lunch, or you modify your concept of lunch (e.g., brown bag it).
I've repeated in multiple posts an analogy from my last year of playing baseball as a boy. Left-handers like myself usually pitch or play first base or the outfield. I normally played in the outfield; towards the end of my last year of playing organized baseball (my high school didn't have a baseball team), my coach rotated me all three outfield positions and then put me in at first base for the first time, where I stayed for the rest of the season. It was a learning experience; there was one game in particular where my fellow infielders were throwing wildly to first base and the balls were getting past me (literally yards off of the base). Obviously I couldn't fix my teammates' throws to first base; my coach suggested that I change the way I played first base; instead of staying on the bag and trying to stretch for the errant throw, I should play the throw off the bag and beat the runner to the base. It worked; instead of playing first base like I saw major league players, I started playing the position like an outfielder. This has been a theme of this blog: for example, Medicare/ Medicaid is on an unsustainable path; we may need to modify how we conceptualize government support for senior citizen benefits. If I used to go out for a fast food lunch, that may be no longer viable on reduced income. But I can bag my own lunch at a reasonable cost.
People have nuanced concepts of things; for example, they may hate everyone else's Congressman, but they love their own Congressman. If you ask them whether they like more free stuff from the government, they love the idea. If you ask them whether or how they want to pay for the benefit, they're wary about their role. Ask them if they think the government should live within their budget just like they have to, the answer is 'yes'. The devil is in the details. Do you want to close the gap by raising your taxes? 'No.' How about cutting expenses? Do you want to lay off teachers? Meat inspectors? 'No.' (Notice how Democrats never ask the question 'Do you want to lay off IRS agents? Or expensive lawyers needed to write gobbledygook for 2000-3000 page laws?')
Start getting into specifics on budget cuts, and you'll get instant opposition from the special-interest groups responsible for putting it there; like Sally Brown (Charlie's little sister), "All I want is what I... I have coming to me. All I want is my fair share."
Can Obama make the case against "austerity" this fall? Will the economy suffer a calamity if the Department of Energy doesn't approve loans for the like of Solyndra, if Department of Justice employees have to buy their own $16 muffins and $8 cups of coffee, if we ask federal workers to do their part and reduce their benefits to those comparable in the private sector? PLEASE. All this President has done while adding $5T to the national debt, doubling the public debt, is offer a minimum payment plan. He has failed to embrace the only viable bipartisan plan to date. Even if he suddenly rediscovers Bowles-Simpson this year, we should see it as little more than just another convenient election eve conversion, a promise he'll break once elected and no longer eligible for future terms in office...
Club Hayek's Russ Roberts commented on a couple of relevant short quotes (John Cassidy's (below) and Paul "We're Not Spending Nearly Enough" Krugman). Let me reprint the relevant paragraph from John Cassidy's New Yorker commentary on Sarkozy's loss yesterday:
When the campaign turns to questions of economics, what is happening in Europe should provide Obama with plenty of arguments with which to flay his opponents. Republicans say they want to slash government spending and focus on the deficit regardless of the immediate economic situation. The Europeans have carried out that experiment, and, to say the least, it hasn’t turned out very well. From this side of the Atlantic, the American economic recovery seems pretty impressive. After more than three years of economic stagnation, most Europeans would gladly take G.D.P. growth of two-to-three per cent and an unemployment rate of eight per cent.I have zero tolerance for this nonsense. US News had a good synopsis on Greece: by last year, Greece had cut spending by 11% and, of course, can't print its own euros; it faced a ruinous default on its debts without a bailout. Even Paul Ryan's "Draconian" budget--before any necessary political bargaining--amounts to $5.8T before $4.2T in tax relief over the coming decade. That translates to $160B net per year versus a comparable $400B (the scale equivalent in US dollars, not the actual Greek amount) which Greece has achieved.
Greece has had a number of deep structural problems: a nepotistic government workforce, state-run industries which must be privatized, a very generous pension system compared to Germany, and widespread tax cheating. More recently, in February, Greece agreed to cut about 150,000 (roughly 20%) of its government workplace by 2015, a loosening of certain labor regulations (e.g, layoff rules and a 22% decrease in the minimum wage), and pension cuts ($370M this year): roughly $4.5B this year in roughly a $310B economy.
The problem we have is not a revenue problem, but a spending problem; government spending is well over 20% of GDP nearly 3 years into the recovery. Sooner or later, we'll have to address the problems that Greece and other Europeans are living through: we have an unsustainable entitlement system. I don't see how Cassidy can write what he did with a straight face: Obama's deficit "plan" calls for just over $2T over 10 years; he has already added over $5T on his own already in less than 4 years. The fact is that financing the national debt takes money away from the private sector which could be used to organically grow businesses and jobs.
The idea that cutting government spending is Draconian is sheer absurdity. We have a high percentage of government employees receiving six-figures in salary, never mind benefits. But consider last year Dems balked at $61B in cuts out of $3.7T in spending, Even a simple 10% cut from a Greek perspective would have been $370B--six times more than the GOP was proposing. Let's recall SOME of the waste and redundancy reported last year by the GAO:
The study found 33 areas with "overlap and fragmentation" in the federal government. Among them, it found:Faithful readers may understand now what I mean by streamlining government. Obama has occasionally touched on it, i.e., famously in the case of salmon.
-- Fifty-six programs across 20 agencies dealing with financial literacy.
-- More than 2,100 data centers -- up from 432 a little more than a decade ago -- across 24 federal agencies. GAO estimated the government could save up to $200 billion over the next decade by consolidating them.
-- Twenty programs across seven agencies dealing with homelessness. The report found $2.9 billion spent on the programs in 2009. "Congress is often to blame" for fragmentation, GAO wrote in this section, explaining that the duplicative programs in multiple agencies cause access problems for potential participants.
-- Eighty-two "distinct" teacher-quality programs across 10 agencies. Many of them have "duplicate sub-goals," GAO said. Nine of them address teacher quality in the fields of science, technology, engineering and math.
-- Fifteen agencies administering 30 food-related laws. "Some of the oversight doesn't make any sense," the report stated bluntly.
-- Eighty economic development programs.
In some cases, the programs in question struggled to account for what they did. Take, for instance, domestic food assistance initiatives. According to GAO, 18 such programs are administered by the U.S. Department of Agriculture, the Department of Homeland Security and the Department of Health and Human Services -- with GAO estimating $62.5 billion spent on them
Russ Roberts points out that the only austerity we're hearing about cutting planned increases in budgets--not budget cuts year over year, elimination or consolidation of agencies, etc. I prefer a very simple reform, e.g., "I want an across-the-board cut of 8% next year; recommend cuts for approval." But don't argue, as Krugman does, that across-the-board spending is good. If that's the case, you should double salaries across the board or break and replace all the windows in the White House.
Nanny Massachusetts:
"Don't Let Them Buy Cake!"
Don't you just love how the school system would subordinate parents' authority over their children? The State of Massachusetts decides that if you aren't going to take charge over your children's eating habits, they are going to show you how to raise your child while he or she is on public property. Obviously there are health concerns with obesity (speaking as someone who has battled with weight issues for much of his adult life), but singling out bake sales? An occasional serving of cake or other bake sale item is NOT responsible for obesity: what's next? Banning sales of Twinkies to children at groceries or convenience stores? Stepping on a scale before you can make a purchase at a Mrs. Fields store at the mall?
This, of course, is not the first time that special-interest parent groups or the government have attempted to impose their dietary standards on other parents' children. It's gotten to the point that offended Texas parents felt compelled to push for a "Safe Cupcake Amendment" exception to nutrition guidelines (so primary school children could share their birthdays with their schoolmates); other locations have banned them for fears over food allergies. Of course, some enlightened Big Nannies have decided to celebrate classmate birthdays with an extra 30 minutes of recess!
Musical Interlude: My Favorite Groups
The Rolling Stones, "Honky Tonk Woman"
