Dan Mitchell clearly understands what modern western government is really all about:
May 24, 2015
May 11, 2015
For another example, consider trade barriers such as tariffs. There are good economic arguments to show that we would be better off if we went to complete free trade. That seems puzzling — if we would be, why don’t we?
The answer is provided by public choice theory, the branch of economics that deals with the workings of the political market. A tariff makes the inhabitants of the country that imposes it worse off but the politicians who pass the tariff better off, since it benefits a concentrated interest group at the cost of dispersed interest groups. More concentrated interest groups are better able to pay politicians to do things for them. Trade policy is optimized, but for the wrong objective.
David D. Friedman, “Why Improving Things Is Hard”, Ideas, 2014-07-08.
April 11, 2015
It’s not nice to call someone a welfare queen, but this is a case where it’s hard to find a more accurate way of putting it:
America’s biggest welfare queen is someone you’ve probably never heard of. She’s Hispanic. She’s been living off other people’s hard-earned tax money for years. And she’s gotten rich doing it.
Her name is Iberdrola. She’s a Spanish energy company that has invested in U.S. power facilities. And according to the advocacy group Good Jobs First, she’s raked in more than $2 billion from Uncle Sam in just the past few years.
Good Jobs First maintains a subsidy tracker where you can look up which companies are getting rich from public funds. It recently issued a report on “Uncle Sam’s Favorite Corporations — the companies that have gained the most from federal grants, special tax preferences, loans, and loan guarantees.
The biggest beneficiaries (“by an order of magnitude”) are Bank of America, Citigroup, and other major financial institutions that were bailed out during the 2008 financial crisis. The Federal Reserve, the Troubled Asset Relief Program, and so on threw trillions of dollars at U.S. and foreign banks in a desperate effort to stabilize the financial system. It worked. In many cases (though not all), the institutions repaid the money. In some cases the federal government actually earned a profit.
But hundreds of other companies have raked in billions of dollars in direct grants. Along with Iberdrola, NextEra Energy, NRG Energy, Southern Company, Summit Power, and SCS Energy all have reaped more than $1 billion in federal largess, often receiving payments through programs meant to boost renewable energy. At the same time, many coal companies have taken huge sums from Washington through grants and coal production tax credits. So, as with farm programs—some of which subsidize farmers to farm more and some of which pay farmers to not farm at all—Washington thwarts its own objectives by subsidizing both renewable fuel sources and the fossil fuels they’re supposed to replace.
March 10, 2015
I am shocked, shocked to find corruption in Quebec politics. I’m also shocked that it’s cold in Winnipeg in February. Politics has never been a game for choir boys. However by international political standards Canadian politics is incredibly tame. M. Lortie may have walked around with hundreds of thousands of dollars in his briefcase, try getting past airport security with that today, but he didn’t make a habit of killing political opponents. In most countries Joe Clark wouldn’t have been deposed, he would have been assassinated.
Even by global standards of graft, bribery and influence peddling this is kid’s stuff. Anyone with a passing familiarity of politics in Latin America knows that M. Lortie is a rank amateur compared to the real professionals beyond our humble dominion. Nor is his temporary alignment with the PQ all that surprising. Allegiance in Quebec politics is that most fluid of things. There are very few real federalists and real sovereignists in La Belle Province. There’s a long running petty feud between cousins about how best to fleece the Canadian taxpayer. The rest is theatre.
These stories are important, they help teach Canadians that politics is rarely public service, but quite often self-service with a taxpayer’s expense account. Beneath the noble rhetoric there’s some guy with silly hair shuffling money around.
Richard Anderson, “The Man With The Briefcase”, The Gods of the Copybook Headings, 2014-06-16.
February 1, 2015
Tim Worstall looks at a recent book on an Indian experiment that investigated how to improve poverty relief programs:
In terms of the Indian experience one of the reasons that these trials worked well was because they were trials. Effort was put into making certain that those who were supposed to be receiving the cash were in fact receiving it. Such care and attention to people getting what they’re supposed to get is not an outstanding feature of the various welfare systems currently in use in India, as the book makes clear. So, just making sure that people were getting those modest amounts that they were supposed to get is going to be an advance. And it wouldn’t be possible to simply roll out such a scheme across the country, however beneficial, without a lot of preparatory work to make sure that the right people really would be getting the money.
It’s also true that the current systems fail badly in other ways. Purchasing grain to ship it around to special shops where it will be sold hugely under the market price is always going to be a leaky system. Some number of the middlemen will be sorely tempted to divert produce to sell onto the market and there’s considerable evidence that some succumb to that temptation. If people simply have money to buy on the standard market in the normal manner then it’s a lot easier to keep a control on that sort of thing.
However, the most important thing for the design of the American welfare system is the points they make about how the poor value being given goods as against being given money. $100 (far in excess of the amounts being discussed here) is worth more than $100 of food for example. Or $100 worth of medical care. There’s two reasons for this. One is simply that everyone values agency. The ability to decide things for oneself. And money does that. It’s possible to decide whether you want to purchase food, or to save a bit and buy a goat next week, or more fertiliser for the fields and so on. What the peasant on the ground would like to do with any increase in resources is most unlikely to accord with what some far away bureaucrat thinks said peasant ought to be doing. So, the choice itself increases value.
So, we could actually make poor people richer by abolishing food stamps. Assuming, of course, that we just gave them the same amount of money instead. The same would be true of Medicaid and housing vouchers of course. Yes, I’m aware that there are arguments against doing this. But it is still true: converting goods and services in kind into cash would make the poor richer at the same cost to the rest of us. So it is at least something we should consider, no?
And the main reason switching to cash from the current system is … paternalism. Governments really do think that they are better equipped than the recipients of aid in how to spend that money. And it’s quite true that some welfare recipients would blow the payments on booze or drugs or what-have-you, but the majority of peoples’ lives would improve if they got cash rather than food stamps or other in-kind assistance.
January 31, 2015
Earlier this month, I linked to an article about the low reputation enjoyed by India’s first domestically designed and manufactured assault rifle. According to Strategy Page, there’s a potential change of heart by the Indian military on the INSAS rifle:
In response to the growing combat losses because of flaws in the locally made INSAS (Indian Small Arms System) 5.56mm assault rifle, the Indian government seems likely to capitulate and allow the military to get a rifle that works. Unfortunately for nationalist politicians, this will probably be a foreign rifle, and the leading candidate is Israeli.
This all began in the 1980s when there was growing clamor for India to design and build its own weapons. This included something as basic as the standard infantry rifle. At that time soldiers and paramilitary-police units were equipped with a mixture of old British Lee-Enfield bolt action (but still quite effective) rifles and newer Belgian FALs (sort of a semi-automatic Lee-Enfield) plus a growing number of Russian AK-47s. The rugged and reliable Russian assault rifle was most popular with its users.
In the late 1980s India began developing a family of 5.56mm infantry weapons (rifle, light machine-gun and carbine). Called the INSAS, the state owned factories were unable to produce the quantities required (and agreed to). Worse, the rifles proved fragile and unreliable. The design was poorly thought out and it is believed corruption played a part because the INSAS had more parts than it needed and cost over twice as much to produce as the AK-47.
The original plan was to equip all troops with INSAS weapons by 1998. Never happened, although troops began to receive the rifle in 1998. By 2000 half the required weapons ordered were still not manufactured. Moreover in 1999 the INSAS weapons got their first real combat workout in the Kargil campaign against Pakistan. While not a complete failure, the nasty weather that characterized that battle zone high in the frigid mountains saw many failures as metal parts sometimes cracked from the extreme cold. Troops complained that they were at a disadvantage because their Pakistani foes could fire on full automatic with their AK-47s while the INSAS rifles had only three bullet burst mode (which, fortunately, sometimes failed and fired more than three bullets for each trigger pull.) What was most irksome about this was that the INSAS rifles were the same weight, size and shape as the AK-47 but cost about $300 each, while AK-47s could be had for less than half that. The INSAS looked like the AK-47 because its design was based on that weapon.
Update: Added the link to Strategy Page.
November 26, 2014
No shit, this really exists:
Ethically, it’s been a rough couple of years for the military.
In July 2013, an Air Force major general went on an epic five-day bender while on a diplomatic mission in Russia. That November, Navy officials launched an investigation into misconduct involving top officers and a Malaysian contractor named Fat Leonard.
Individually, the cases are all bad news. The good news is that authorities often catch and punish government cheats, thieves and frauds. Penalties for ripping off the American taxpayer range from huge fines to hard time in prison.
And when the trial ends and punishment begins, many military ethics cases wind up in the Pentagon’s Encyclopedia of Ethical Failure.
That’s right, the military maintains a database of the federal government’s worst ethics violators. Unlike many government documents, the encyclopedia is clear, easy to read … and actually quite funny. Many of the stories are as amusing as they are aggravating.
It might be the most light-hearted official report anyone’s ever written about criminals.
H/T to John Turner for the link.
November 19, 2014
Vice‘s Brian Blickenstaff smashes Badminton as “the world’s most corrupt sport”:
Late last week, it emerged that Lee Chong Wei, the world’s top badminton player, failed a drug test. A niche sport in the United States, badminton has been part of the Olympics since 1992 and enjoys huge popularity in Asia. Lee is the sport’s Novak Djokovic, a truly dominant force over the past several years. He’s the best player Malaysia, one of the world’s most badminton-mad countries, has ever produced. A two-time Olympic silver-medal winner, Lee is, or was, a favorite for gold in Rio de Janeiro; he faces a two year ban and could miss the Olympics entirely.
But Lee’s drug test isn’t notable simply because sports fans can’t look away when a giant teeters and falls; it’s notable because the incident is one of many scandals to hit badminton over the past year. On current form, badminton might be the world’s most corrupt sport.
In June, during the Japan Open, two Danish players were approached and offered north of 2,500 Euros to fix matches. The alleged fixer was Malaysian. The two players, Kim Astrup Sorenson and Hans Kristian Vittinghus, both reported the incident to authorities. 2,500 Euros might not be a lot of money, but the implications are huge. Vittinghus is the world’s 10th ranked singles player. If people are trying to flip a top-ten athlete, what’s happening lower down the pyramid?
I can attest that I’ve never been offered a bribe to throw a badminton game. Perhaps that’s because I’m not good enough to convincingly throw a game … unlike the Chinese Olympic players in 2012. Oh, wait … they weren’t convincing either.
September 9, 2014
It’s not about a sudden sensitivity to Russian feelings: NATO is not providing up-to-date weapons and ammunition for excellent practical reasons:
The Ukrainian armed forces use Soviet weapons systems. These are well-designed, solid, easy to use for a conscript army, and although the Ukrainian inventory may be aging, Soviet arms production was never geared to high-tech generational obsolescence. They build simple, solid and cheap because they have to. NATO countries are casualty-averse and never commit a platoon where a Hellfire missile is available. On the other hand, Soviet doctrine never varied much from the World War II stories of tank attacks shoving the flaming hulks of the first wave out of the way, for the second wave to be destroyed in turn, until the Germans ran out of ammunition. Almost anything NATO could supply would be very hard to employ on the battlefield without training, and time for training is what the Ukrainians do not have.
In this sense, “training” doesn’t just mean “here’s the operator’s manual.” It means that the whole operational and tactical doctrine of the army has to be redesigned around the new weapons systems.
It’s not just the actual weapons, training and doctrine, either. Not to be unkind about it but Ukraine’s armed forces are almost completely hollowed out by official neglect, underfunding, and corruption. Back in May, Sarah Chayes reported on the pitiful state of Ukrainian military preparedness:
In a 2012 analysis Leonid Polyakov, another senior defense official, detailed the corrupt workings with remarkable candor. Chronic underfunding “enhanced the role of the human factor” in choosing among operational priorities. Ostensibly outdated equipment was sold “at unreasonably understated prices” in return for kickbacks. Officers even auctioned off defense ministry land. Gradually, Kyiv began requiring the military to cover more of its own costs, forcing senior officers into business, “which is…inconsistent with the armed forces’ mission,” and opened multiple avenues for corruption. Commanders took to “using military equipment, infrastructure, and…personnel [to] build private houses, [or] make repairs in their apartments.” Procurement fraud was rife, as were bribes to get into and through military academies, and for desirable assignments.
So even if Ukraine had taken advantage of NATO equipment, training, and support, much of the new kit would have disappeared into the same criminal enterprises which sold off so much of the old kit.
September 4, 2014
The Westport Independent, a self-described “censorship simulator,” places that editorial power in the hands of players during a time of political unrest in the city of Westport. It’s 1948, and rising rebellions against the government lead to a new bill banning any news outlets that do not comply with the Loyalist Government Guidelines. You play as the editor in chief of an independent newspaper entering its final weeks before the ban.
As editor, you control the censorship of articles, pick headlines, and arrange the layout to tell the truth of your choosing. As with Orwell’s 1984, “in a time of universal deceit, telling the truth becomes a revolutionary act.” Will you abide by rules and force-feed your readers the government’s narrative? Or will you defy their guidelines, and print the rebellion’s perspective instead? The city, divided into class-based districts, dynamically responds to everything you print. By shaping public opinion with the stories you choose, you shape the current events that unfold. And by shaping the events, you affect the stories you can cover.
August 19, 2014
When this principle of “power corrupts” is the driving force behind a conservative’s approach to the legislative, executive, and judicial branches of government, why are so many conservatives unwilling to apply it to those who enforce many of the government’s laws? In the days since Michael Brown’s death, we’ve seen video footage of police firing teargas onto people’s private property (language warning). We’ve heard reports of police arresting journalists who were not engaging in any illegal activity. If power seems to be corrupting those charged with keeping the peace during the recent unrest in Ferguson, why do some conservatives refuse to consider the mere possibility that a police officer may have been corrupted by power in the event that sparked the unrest?
The answer is, I think, quite simple. For many conservatives, especially those of us living in nice, comfy suburbs, it’s hard to apply the “power corrupts” doctrine to law enforcement because we’ve never seen corrupted enforcers of the law. We’ve never been wrongly arrested. We’ve never witnessed our children put in jail based on the false reports of police officers. We’ve never seen our neighbors beaten or tazed without cause. And in the extremely unlikely scenario that a police officer drove into our neighborhood and murdered our unarmed friend in cold blood, we cannot possibly fathom a scenario where the justice system wouldn’t be on our side and where that police officer wouldn’t spend the rest of his life in jail. Therefore Brown must have been a violent, gang-sign flashing thug, foolish enough to think he could swipe a cop’s weapon because, in our minds, there’s no conceivable way that a police officer would gun down an innocent man.
But just because we don’t see the corruption of law enforcement in our own lives doesn’t mean that it doesn’t exist. Police brutality is not the Bogeyman. It’s not an urban legend witnessed by none but told by many. It’s not a myth created by a primitive tribe that is too simple to understand the true source of the brokenness in its communities. Black people believe in police brutality for the same reason they believe in rain — because they’ve felt it.
Hans Fiene, “Michael Brown And The Conservative Inconsistency”, The Federalist, 2014-08-15.
August 7, 2014
Colby Cosh bids adieu to the former Progressive Conservative premier of Alberta:
What will Alison Redford’s premiership be remembered for? She summarized her own legacy in the statement she released when resigning from the Alberta Legislative Assembly Wednesday. And it is a little sad.
Can the Alberta PC dynasty survive calling the cops on one of its own leaders? Most Alberta voters, I suspect, will go over the events and revelations of the last year and think: “Are we turning into British Columbia or what?” Redford fell from power because she appeared to be foul-tempered and paranoid as well as ethically dubious, but if we are being honest, her scandals are at least as much a matter of evolving standards as they are worsening behaviour.
Under Redford, the Progressive Conservatives have gotten caught taking dozens of donations for the party war chest from municipalities, counties, learning institutions, government agencies and contractors, and the Treasury Branches. Some of this happened before Redford became Premier, which is worth remembering as the party tries to pin everything on the discarded bad apple. None of the people who engineered those kickbacks showed any awareness that they were obviously wrong or even unlawful, which tells us just how long the PCs have been doing that sort of thing. Because disclosure laws have evolved, and Google exists, we find out about it now. (Not all of Redford’s problems over expenses were ferreted out by reporters following up tips with FOI filings: some came up simply because Alberta government expense disclosure is now public, online, and frequent.)
There is a strong case that the PCs need some time on the sideline as a matter of hygiene — that, irrespective of ideology, 43 consecutive years of majority government is as unhealthy as 43 consecutive days wearing the same underwear. But it is easy to forget that Albertans have good reasons for their apparently congenital reluctance to change. The province’s resource economy has been managed, to a degree few others can boast, for the benefit of what used to be called “the working class”. The market power of skilled and unskilled industrial labour is probably as enormous, here and now, as it has been anywhere in history.
Ontarians in particular may want to put down any fragile objects and get the kids out of the room before reading the next two paragraphs…
And political power follows, if only because the trades are so large as a proportion of the populace in Alberta. If you need proof, just look at the virtually unified clamour against the federal government’s neutering of the Temporary Foreign Worker program. In Alberta, TFW is popular because it functions as a guarantee that oilpatch and construction workers will continue to enjoy cheap food, hospitality, daycare, and entertainment while their own wages skyrocket.
There is a little-noticed irony in the Canadian left’s contempt for Alberta: to a truly awesome degree, Alberta has, through managed capitalism, fulfilled the wildest dreams for industrial workers ever dreamed up by Marx and Lenin. This self-evidently has not much to do with labour unions. (What labour unions?) When Albertans talk about TFW, it is often observed that young people exiting high school here are not obligated to fill brainless service jobs, because it is so easy for them to go buy a pair of steel-toes and land a fairly enormous salary in a matter of hours. It is important that people outside Alberta understand: this is a complaint! It’s a common one!
July 17, 2014
Robert Tracinski points out that the recent discovery of a “peer review and citation ring” for mere monetary gain illustrates that when much is at stake, the temptation to pervert the system can become overwhelming:
The Journal of Vibration and Control — not as titillating as it sounds; it’s an engineering journal devoted to how to control dangerous vibrations in machines and structures — just retracted 60 published papers because “a ‘peer review and citation ring’ was apparently rigging the review process to get articles published.”
The motive here is ordinary corruption. Employment and prestige in academia is usually based on the number of papers a professor has published in peer-reviewed journals. It’s a very rough gauge of whether a scientist is doing important research, and it’s the kind of criterion that appeals to administrators who don’t want to stick their noses out by using their own judgment. But it is obviously open to manipulation. In this case, a scientist in Taiwan led a ring that created fake online reviewers to lend their approval to each others’ articles and pump up their career prospects.
But if this is what happens when the motive is individual corruption, imagine how much greater the incentive is when there is also a wider ideological motive. Imagine what happens when a group of academics are promoting a scientific theory that not only advances their individual careers in the universities, but which is also a source of billions of dollars in government funding, a key claim for an entire ideological world view, an entrenched dogma for one side of the national political debate, and a quasi-religious item of faith whose advocates believe they are literally saving the world?
July 2, 2014
Bill Barnwell discusses what we know (or what we’ve been told) about corruption in soccer matches all the way from Finland to Cameroon to the current World Cup fixtures in Brazil:
Late Monday night, FIFA’s worst nightmare began to break. The Cameroon Football Federation sent out an urgent press release announcing that they were investigating claims that several of Cameroon’s recent matches were fixed, most notably the country’s 4-0 loss to Croatia during the group stage of the World Cup. The allegations come from a story in German newspaper Der Spiegel, which reported that notable alleged Singaporean match fixer Wilson Raj Perumal told the paper in a pre-match Facebook chat that the African side would have a player sent off in the first half before losing 4-0. Both would later occur in the match. Perumal further alleged that the Cameroon team had “seven bad apples” and has been involved, to some extent, with fixing all three of its group stage matches before exiting the tournament.
Perumal has since issued a statement, via the co-authors of his biography, denying that he predicted the result.
Of course, allegations of fixed soccer matches aren’t anything new. What makes this so shocking and so meaningful is the idea that a World Cup match was fixed. It’s one thing for some third-division match under a rock in front of 40 people to be rigged. If a World Cup match can be manipulated with the globe watching, though, is there any match that can’t be fixed?
Perumal and an associate eventually found their way to Scandinavia, where they would fix matches at a number of clubs in Finland. Most notably, Perumal offered to invest more than a million Euros in struggling Finnish side Tampere United if they allowed him to invite several awful players from outside the country on the take to come play for the club. They took about half of the money and didn’t bother to play the players Perumal brought on; they’re also now banned from Finnish soccer. For some of his fixes, Perumal was actually able to issue instructions during matches to players on the pitch from the team bench.
Perumal suggests that he didn’t need influence over much of a team to fix a match, preferring to focus on the defense. “I prefer back-line players: the two central defenders, the last man stopper and the goalkeeper. If you can get three back-line players on your payroll then you can execute a fix because, when you want to lose, the attackers can’t help you,” he wrote.
As for Cameroon, well, it’s hard to say what will become of them. If there are seven players on the team who are proven to have fixed matches at the World Cup, their punishment will be severe, with permanent banishment from the sport a likely option. I’ll be intrigued to see what the investigation reveals, even if I’m very skeptical that an investigation conducted by the Cameroon FA and FIFA will be very thorough. They have little to gain from revealing their own corruption. I don’t know that Cameroon necessarily manipulated results during this World Cup, but I would be surprised if the entire tournament actually went untouched by match fixers. There’s simply too much to be gained and too little to stop it from occurring.
June 30, 2014
Our political bureaucracies are grasping and vicious, and some of the larger of them are dominated by people who are, if we’re being frank, not especially bright. No society can long thrive by making its creators and innovators subservient to its pimps and thieves. But agencies with the power to tax or the power to pay themselves out of taxes have the power to command, and, human nature being what it is, it is not surprising that their executives use that power to extort for themselves extraordinary levels of compensation (occasionally through criminal means, as in the Bell case), even as they bore us all to death talking about the sacrifices they have endured on behalf of their careers in “public service.” […]
It is baffling that my progressive friends lament the influence of so-called big money on government while at the same time proposing to expand the very scope and scale of that government that makes influencing it such a good investment. Where government means constables, soldiers, judges, and precious little else, it is not much worth capturing. Where government means somebody whose permission must be sought before you can even begin to earn a living, when it determines the prices of products, the terms of competition, and the interest rates on your competitors’ financing, then it is worth capturing. That much is obvious. Progressives refuse to see the inherent corruption in the new ruling class — and, make no mistake, we now have a ruling class — because it is largely made up of them, their colleagues, and people who are socially and culturally like them and their colleagues. Getting a couple hundred grand a year to teach one class doesn’t look so crazy if you think you might be the guy who gets the check next time around. You can be an anti-elite crusader on behalf of the poor and disenfranchised from your million-dollar mansion, even if you never find yourself so much as downwind from a poor person, without fearing charges of hypocrisy: Ask Senator Warren. Of course Chelsea Clinton does not have the sense or the good taste to be embarrassed when talking about her blasé attitude toward money: Money is invisible to her for the same reason that water is invisible to a fish — she’d notice it if it weren’t there, and flap like a desperate landed mackerel until she’d secured her next big payday.
Kevin D. Williamson, “Politics Pays”, National Review, 2014-06-29.