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It’s a Big Government Mess

22 Tuesday Nov 2022

Posted by Nuetzel in Big Government, Uncategorized

≈ 1 Comment

Tags

Campaign Spending, Carbon Footprint, central planning, Climate Risk, Compliance Costs, Cronyism, Debt Monetization, dependency, Diversity, Do-Somethingism, External Costs, Fiscal Illusion, Limited government, Malinvestment, monopoly, Price Controls, Public goods, Redistribution, Regulatory Capture, rent seeking, Wetlands, Willingness To Pay

I’m really grateful to have the midterm elections behind us. Well, except for the runoff Senate race in Georgia, the cockeyed ranked-choice Senate race in Alaska, and a few stray House races that remain unsettled after almost two weeks. I’m tired of campaign ads, including the junk mail and pestering “unknown” callers — undoubtedly campaign reps or polling organizations.

It’s astonishing how much money is donated and spent by political campaigns. This year’s elections saw total campaign spending (all levels) hit $16.7 billion, a record for a mid-term. The recent growth in campaign spending for federal offices has been dramatic, as the chart below shows:

Do you think spending of a few hundred million dollars on a Senate campaign is crazy? Me too, though I don’t advocate for legal limits on campaign spending because, for better or worse, that issue is entangled with free speech rights. Campaigns are zero-sum events, but presumably a big donor thinks a success carries some asymmetric reward…. A success rate of better than 50% across several campaigns probably buys much more…. And donors can throw money at sure political bets that are probably worth a great deal…. Many donors spread their largess across both parties, perhaps as a form of “protection”. But it all seems so distasteful, and it’s surely a source of waste in the aggregate.

My reservations about profligate campaign spending include the fact that it is a symptom of big government. Donors obviously believe they are buying something that government, in one way or another, makes possible for them. The greater the scope of government activity, the more numerous are opportunities for rent seeking — private gains through manipulation of public actors. This is the playground of fascists!

There are people who believe that placing things in the hands of government is an obvious solution to the excesses of “greed”. However, politicians and government employees are every bit as self-interested and “greedy” as actors in the private sector. And they can do much more damage: government actors legally exercise coercive power, they are not subject in any way to external market discipline, and they often lack any form of accountability. They are not compelled to respect consumer sovereignty, and they make correspondingly little contribution to the nation’s productivity and welfare.

Actors in the private sector, on the other hand, face strong incentives to engage in optimizing behavior: they must please customers and strive to improve performance to stay ahead of their competition. That is, unless they are seduced by what power they might have to seek rents through public sector activism.

A people who grant a wide scope of government will always suffer consequences they should expect, but they often proceed in abject ignorance. So here is my rant, a brief rundown on some of the things naive statists should expect to get for their votes. Of course, this is a short list — it could be much longer:

  • Opportunities for graft as bureaucrats administer the spending of others’ money and manipulate economic activity via central planning.
  • A ballooning and increasingly complex tax code seemingly designed to benefit attorneys, the accounting profession, and certainly some taxpayers, but at the expense of most taxpayers.
  • Subsidies granted to producers and technologies that are often either unnecessary or uneconomic (and see here), leading to malinvestment of capital. This is often a consequence of the rent seeking and cronyism that goes hand-in-hand with government dominance and ham-handed central planning.
  • Redistribution of existing wealth, a zero- or even negative-sum activity from an economic perspective, is prioritized over growth.
  • Redistribution beyond a reasonable safety net for those unable to work and without resources is a prescription for unnecessary dependency, and it very often constitutes a surreptitious political buy-off.
  • Budgetary language under which “budget cuts” mean reductions in the growth of spending.
  • Large categories of spending, known in the U.S. as non-discretionary entitlements, that are essentially off limits to lawmakers within the normal budget appropriations process.
  • “Fiscal illusion” is exploited by politicians and statists to hide the cost of government expansion.
  • The strained refrain that too many private activities impose external costs is stretched to the point at which government authorities externalize internalities via coercive taxes, regulation, or legal actions.
  • Massive growth in regulation (see chart at top) extending to puddles classified as wetlands (EPA), the ”disparate impacts” of private hiring practices (EEOC), carbon footprints of your company and its suppliers (EPA, Fed, SEC), outrageous energy efficiency standards (DOE), and a multiplicity of other intrusions.
  • Growth in the costs of regulatory compliance.
  • A nearly complete lack of responsiveness to market prices, leading to misallocation of resources — waste.
  • Lack of value metrics for government activities to gauge the public’s “willingness to pay”.
  • Monopoly encouraged by regulatory capture and legal / compliance cost barriers to competition. Again, cronyism.
  • Monopoly granted by other mechanisms such as import restrictions and licensure requirements. Again, cronyism.
  • Ruination of key industries as government control takes it’s grip.
  • Shortages induced by price controls.
  • Inflation and diminished buying power stoked by monetized deficits, which is a long tradition in financing excessive government.
  • Malinvestment of private capital created by monetary excess and surplus liquidity.
  • That malinvestment of private capital creates macroeconomic instability. The poorly deployed capital must be written off and/or reallocated to productive uses at great cost.
  • Funding for bizarre activities folded into larger budget appropriations, like holograms of dead comedians, hamster fighting experiments, and an IHOP for a DC neighborhood.
  • A gigantic public sector workforce in whose interest is a large and growing government sector, and who believe that government shutdowns are the end of the world.
  • Attempts to achieve central control of information available to the public, and the quashing of dissent, even in a world with advanced private information technology. See the story of Hunter Biden’s laptop. This extends to control of scientific narratives to ensure support for certain government programs.
  • Central funding brings central pursestrings and control. This phenomenon is evident today in local governance, education, and science. This is another way in which big government fosters dependency.
  • Mission creep as increasing areas of economic activity are redefined as “public” in nature.
  • Law and tax enforcement, security, and investigative agencies pressed into service to defend established government interests and to compromise opposition.

I’ve barely scratched the surface! Many of the items above occur under big government precisely because various factions of the public demand responses to perceived problems or “injustices”, despite the broader harms interventions may bring. The press is partly responsible for this tendency, being largely ignorant and lacking the patience for private solutions and market processes. And obviously, those kinds of demands are a reason government gets big to begin with. In the past, I’ve referred to these knee-jerk demands as “do somethingism”, and politicians are usually too eager to play along. The squeaky wheel gets the oil.

I mentioned cronyism several times in the list. The very existence of broad public administration and spending invites the clamoring of obsequious cronies. They come forward to offer their services, do large and small “favors”, make policy suggestions, contribute to lawmakers, and to offer handsomely remunerative post-government employment opportunities. Of course, certaIn private parties also recognize the potential opportunities for market dominance when regulators come calling. We have here a perversion of the healthy economic incentives normally faced by private actors, and these are dynamics that gives rise to a fascist state.

It’s true, of course, that there are areas in which government action is justified, if not necessary. These include pure public goods such as national defense, as well as public safety, law enforcement, and a legal system for prosecuting crimes and adjudicating disputes. So a certain level of state capacity is a good thing. Nevertheless, as the list suggests, even these traditional roles for government are ripe for unhealthy mission creep and ultimately abuse by cronies.

The overriding issue motivating my voting patterns is the belief in limited government. Both major political parties in the U.S. violate this criterion, or at least carve out exceptions when it suits them. I usually identify the Democrat Party with statism, and there is no question that democrats rely far too heavily on government solutions and intervention in private markets. The GOP, on the other hand, often fails to recognize the statism inherent in it’s own public boondoggles, cronyism, and legislated morality. In the end, the best guide for voting would be a political candidate’s adherence to the constitutional principles of limited government and individual liberty, and whether they seem to understand those principles. Unfortunately, that is often too difficult to discern.

Taking Inspiration From Morons

28 Thursday Jan 2021

Posted by Nuetzel in Blogging, Social Media

≈ Leave a comment

Tags

Biden Administration, Big Tech, Blogging, Do-Somethingism, Facebook, Libertarianism, Sacred Cow Chips, Sacred Cows, Woke

I just quit Facebook for good, and it’s about time! Over the years my posts there became focused on links to my blog, SacredCowChips. In fact, I started the blog as a vehicle for longish-form refutation of nitwitted ideas to which I was regularly exposed on Facebook. Of course, nitwitted ideas are all too common in economic and political discourse, so there is always a deep vein of blog-worthy material. Facebook has no monopoly on that! More recently, COVID became a primary vehicle for foolish policy and commentary, which gave me plenty to write about.

What strikes me now is how much inspiration I drew from the purveyors of nonsense on Facebook. And when I say “inspired”, I mean it excited me to write posts that I knew would drop their jaws. Again, there are infinite sources of wrongheaded thinking and non-thinking acceptance of “woke” BS outside my circle of former Facebook friends. Still, I wonder whether posting my articles there gave me an extra thrill because I knew those people and could stick it right under their noses.

I’d say my hope was to persuade except I couldn’t help giving in to my disdain for “sacred cows.” Those aren’t really confined to one side of the political aisle, either. I’ll find a way to piss off everyone eventually. People of all stripes take pieces of received wisdom without subjecting them to logical scrutiny, and they don’t like to be told they’re wrong. I’m sure that led certain “friends” to “unfollow” me on Facebook. There’s no way of knowing, but it really didn’t bother me. What bothered me a little was when friends who agreed with me were too chickenshit to “like” a post. I know some had business interests to protect and couldn’t afford to alienate the crowd, but some people are more daring in that regard, to which I must accord some respect.

I now find myself on several platforms dominated by folks more amenable to my largely libertarian point of view. But I feel much more as if I’m “singing to the choir”. Also, I’m concerned that articles might get lost amid a sea of posts appealing to similar “mood affiliations”.

Here’s another concern: since I posted “On Leaving Facebook”, in which I was highly critical of the tech giants, my readership has plunged. Granted, I haven’t posted in six days due to travel and reorienting my social media connections. Nevertheless, I find the downturn in views and visitors to my blog highly coincidental and suspicious.

Even after all that, however, I’m still eager to continue writing about issues that are important to me. As part of that, I’ll find plenty of inspiration in the dumb reports of woke journalists, pundits, and politicos. And after all, the Biden Administration and Congress are full of busybodies who are so set on “doing something” that they will propose all sorts of moronic public policies. No, inspiration won’t be a problem!

COVID Interventions: Costly, Deadly, and Ineffective

14 Monday Dec 2020

Posted by Nuetzel in Coronavirus, Liberty, Lockdowns, Public Health

≈ 1 Comment

Tags

AJ Kay, Andrew Cuomo, CDC, Contact Tracing, Covid-19, David Kay, Do-Somethingism, Eric Garcetti, Essential Businesses, Fairfax County Schools, Federalism, Friedrich Hayek, Human Rights Watch, J.D. Tucille, Justin Hart, Kelsey Munro, Knowledge Problem, Lemoine, Life Value, Nature, Non-Prescriptive Interventions, Philippe Lemoine, Public Health, Scott Sumner, Seth Flaxman, Stringency Index, University of Oxford, World Health Organization

What does it take to shake people out of their statist stupor? Evidently, the sweet “logic” of universal confinement is very appealing to the prescriptive mindset of busybodies everywhere, who anxiously wag their fingers at those whom they view as insufficiently frightened. As difficult as it is for these shrieking, authoritarian curs to fathom, measures like lockdowns, restrictions on business activity, school closures, and mandates on behavior have at best a limited impact on the spread of the coronavirus, and they are enormously costly in terms of economic well-being and many dimensions of public health. Yet the storm of propaganda to the contrary continues. Media outlets routinely run scare stories, dwelling on rising case numbers but ignoring them when they fall; they emphasize inflated measures of pandemic severity; certain researchers and so-called health experts can’t learn the lessons that are plain in the data; and too many public officials feel compelled to assert presumed but unconstitutional powers. At least the World Health Organization has managed to see things clearly, but many don’t want to listen.

I’ll be the first to say I thought the federalist approach to COVID policy was commendable: allow states and local governments to craft policies appropriate to local conditions and political preferences, rather than have the federal government dictate a one-size-fits-all policy. I haven’t wavered in that assessment, but let’s just say I expected more variety. What I failed to appreciate was the extent to which state and local leaders are captive to provincial busybodies, mavens of precautionary excess, and fraudulent claims to scientific wisdom.

Of course, it should be obvious that the “knowledge problem” articulated by Friedrich Hayek is just as dangerous at low-levels of government as it is in a central Leviathan. And it’s not just a knowledge problem, but a political problem: officials become panicked because they fear bad outcomes will spell doom for their careers. Politicians are particularly prone to the hazards of “do-somethingism”, especially if they have willing, status-seeking “experts” to back them up. But as Scott Sumner says:

“When issues strongly impact society, the science no longer ‘speaks for itself’.

Well, the science is not quite as clear as the “follow-the-science” crowd would have you believe. And unfortunately, public officials have little interest in sober assessments of the unintended effects of lockdown policy.

In my last post, I presented a simple framework for thinking about the benefits and costs of lockdown measures, or non-pharmaceutical interventions (NPIs). I also emphasized the knowledge problem: even if there is some point at which NPI stringencies are “optimized”, government does not possess the knowledge to find that point. It lacks detailed information on both the costs and benefits of NPIs, but individual actors know their own tolerance for risk, and they surely have some sense of the risks they pose to others in their normal course of affairs. While voluntary precautions might be imperfect, they accomplish much of what interventionists hope will be gained via coercion. But, in an effort to “sell” NPIs to constituents and assert their authority, officials vastly over-estimate benefits of NPIs and under-estimate the costs.

NPI Stringency and COVID Outcomes

Let’s take a look at a measure of the strength of NPIs by state — the University of Oxford Stringency Index — and compare those to CDC all-cause excess deaths in each state. If it’s hard to read, try clicking on the image or turn your phone sideways. This plot covers outcomes through mid-November:

The chart doesn’t suggest any benefit to the imposition of greater restrictions, or more stringent NPIs. In fact, the truth is that people will do most of the work on their own based on perceptions of risk. That’s partly because government restrictions add little risk mitigation to what can be accomplished by voluntary social distancing and other precautions.

Here’s a similar chart with cross-country comparisons, though the data here ended in early October (I apologize for the fuzzy image):

But what about reverse causality? Maybe the imposition of stringency was a response to more severe contagions. Now that the virus has swept most of the U.S and Europe in three distinct waves, and given the variety and timing of NPIs that have been tried, it’s harder to make that argument. States like South Dakota have done fairly well with low stringency, while states like New Jersey with high stringency have fared poorly. The charts above provide multiple pair-wise examples and counter-examples of states or countries having faced hard waves with different results.

But let’s look at a few specific situations.

The countries shown above have converged somewhat over the past month: Sweden’s daily deaths have risen while the others have declined to greater or lesser degrees, but the implications for mask usage are unaltered.

And of course we have this gem, predicated on the mental gymnastics lockdown enthusiasts are fond of performing:

But seriously, it’s been a typical pattern: cases rise to a point at which officials muster the political will to impose restrictions, often well after the “exponential” phase of the wave or even the peak has passed. For the sake of argument, if we were to stipulate that lockdowns save lives, it would take time for these measures to mitigate new infections, time for some of the infected individuals to become symptomatic, and more time for diagnosis. For the lockdown arguments to be persuasive, the implementation of NPIs would have to precede the point at which the growth of cases begins to decline by a few weeks. That’s something we’ve seldom observed, but officials always seem to take credit for the inevitable decline in cases.

More informed lockdown proponents have been hanging their hats on this paper in Nature by Seth Flaxman, et al, published in July. As Philippe LeMoine has shown, however, Flaxman and his coauthors essentially assumed their result. After a fairly exhaustive analysis, Lemoine, a man who understands sophisticated mathematics, offers these damning comments:

“Their paper is a prime example of propaganda masquerading as science that weaponizes complicated mathematics to promote questionable policies. Complicated mathematics always impresses people because they don’t understand it and it makes the analysis look scientific, but often it’s used to launder totally implausible assumptions, which anyone could recognize as such if they were stated in plain language. I think it’s exactly what happened with Flaxman et al.’s paper, which has been used as a cudgel to defend lockdowns, even though it has no practical relevance whatsoever.”

The Economic Costs of Stringency

So the benefits of stringent lockdowns in terms of averting sickness and death from COVID are speculative at best. What about the costs of lockdowns? We can start with their negative impact on economic activity:

That’s a pretty bad reflection on NPI stringency. In the U.S, a 10% decline in GDP in 2020 amounts to about $2.1 trillion in lost goods and services. That’s just for starters. The many destroyed businesses and livelihoods carry an ongoing cost that could take years to fade, as this graphic on permanent business closures shows:

If you’re wondering about the distributional effects of lockdowns, here’s more bad news:

It’s possible to do many high-paying jobs from home. Not so for blue-collar workers. And distributional effects by size of enterprise are also heavily-skewed in favor of big companies. Within the retail industry, big-box stores are often designated as “essential”, while small shops and restaurants are not. The restaurant industry has been destroyed in many areas, inflicting a huge blow to owners and workers. This despite evidence from contact tracing showing that restaurants and bars account for a very small share of transmission. To add insult to injury, many restaurants invested heavily in safety measures and equipment to facilitate new, safer ways of doing business, only to be double-crossed by officials like Andrew Cuomo and Eric Garcetti, who later shut them down.

Public Health Costs of Stringency

Lives are lost due to lockdowns, but here’s a little exercise for the sake of argument: The life value implied by individual willingness-to-pay for risk reduction comes in at less than $4 million. Even if the supposed 300,000 COVID deaths had all been saved by lockdowns, that would have amounted to a value of $1.2 trillion, about half of the GDP loss indicated above. Of course, it would be outrageously generous to concede that lives saved by NPI’s have approached 300,000, so lockdowns fall far short at the very outset of any cost-benefit comparison, even if we value individual lives at far more than $4 million.

As AJ Kay says, the social and human costs go far beyond economic losses:

I cited specific examples of losses in many of these categories in an earlier post. But for the moment, instead of focusing on causes of death, take a look at this table provided by Justin Hart showing a measure of non-COVID excess deaths by age group in the far right-hand column:

The numbers here are derived by averaging deaths by age group over the previous five years and subtracting COVID deaths in each group. I believe Hart’s numbers go through November. Of greatest interest here is the fact that younger age groups, having far less risk of death from COVID than older age groups, have suffered large numbers of excess deaths NOT attributed to COVID. As Hart notes later in his thread:

These deaths are a tragic consequence of lockdowns.

Educational Costs of Stringency

Many schools have been closed to in-person instruction during the pandemic, leading to severe disruptions to the education f children. This report from the Fairfax County, VA School District is indicative, and it is extremely disheartening. The report includes the following table:

Note the deterioration for disabled students, English learners, and the economically disadvantaged. The surfeit of failing grades is especially damaging to groups already struggling in school relative to their peers, such as blacks and Hispanics. Not only has the disruption to in-person instruction been disastrous to many students and their futures; it has also yielded little benefit in mitigating the contagion. A recent study in The Lancet confirms once again that transmission is low in educational settings. Also see here and here for more evidence on that point.

Conclusion

It’s clear that the “follow-the-science” mantra as a rationale for stringent NPIs was always a fraud, as was the knee-jerk response from those who conflated lockdowns with “leadership”. Such was the wrongheaded and ultimately deadly pressure to “do something”. We can be thankful that pressure was resisted at the federal level by President Trump. The extraordinary damage inflicted by ongoing NPIs was quite foreseeable, but there is one more very ominous implication. I’ll allow J.D. Tucille to sum that up with some of the pointed quotes he provides:

“‘The first global pandemic of the digital age has accelerated the international adoption of surveillance and public security technologies, normalising new forms of widespread, overt state surveillance,’ warned Kelsey Munro and Danielle Cave of the Australian Strategic Policy Institute’s Cyber Policy Centre last month.

‘Numerous governments have used the COVID-pandemic to repress expression in violation of their obligations under human rights law,’ United Nations Special Rapporteur on Freedom of Expression David Kaye noted in July.

‘For authoritarian-minded leaders, the coronavirus crisis is offering a convenient pretext to silence critics and consolidate power,’ Human Rights Watch warned back in April.

There’s widespread agreement, then, that government officials around the world are exploiting the pandemic to expand their power and to suppress opposition. That’s the case not only among the usual suspects where authorities don’t pretend to take elections and civil liberties seriously, but also in countries that are traditionally considered ‘free.’ … It’s wildly optimistic to expect that newly acquired surveillance tools and enforcement powers will simply evaporate once COVID-19 is sent on its way. The post-pandemic new normal is almost certain to be more authoritarian than what went before.”

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Ominous The Spirit is an artist that makes music, paints, and creates photography. He donates 100% of profits to charity.

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To estimate, compare, distinguish, discuss, and trace to its principal sources everything

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A Commonwealth immigrant's perspective on the UK's public arena.

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Commentary from a Paleoconservative and Nationalist perspective

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In advanced civilizations the period loosely called Alexandrian is usually associated with flexible morals, perfunctory religion, populist standards and cosmopolitan tastes, feminism, exotic cults, and the rapid turnover of high and low fads---in short, a falling away (which is all that decadence means) from the strictness of traditional rules, embodied in character and inforced from within. -- Jacques Barzun

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