Tag Archives: spending

YGTBSM

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Wasting taxpayer money edition. This one is from Watchdog.org.

Take careful steps.

When possible, stay in your seat and, by all means, grab hold of that railing.

Simple advice, apparently from much simpler times.

Today, Hawaii seems compelled to pay someone—rather handsomely—to offer such ubiquitous and common-sense advice.

Of course, common sense and government oftentimes are mutually exclusive.

Hawaii taxpayers will spend $81,000 in 2015 on a new government position—fall prevention coordinator, who will teach Hawaii’s senior citizens, well, how not to fall.

Governor Neil Abercrombie (D) signed House Bill 2053 into law this week, which creates the new fall prevention and early detection coordinator position within the Department of Health’s Emergency Medical Services and Injury Prevention branch.

Because the good folks in Hawaii don’t have their own uses for that money, but Hawaii’s Big Brother does.

Contradictions of the Export-Import Bank

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The Export-Import Bank is a hoary, old financial institution with the purpose of facilitating American exports by providing financing or guaranteeing loans for cross-border transactions in which the private sector declines to participate.

There’s a hint there.

It may be that such government involvement might have done some good in the bad, old days before widespread free trade agreements. It may be, too, that tariffs were a good idea a long time ago. Or maybe not.

Free trade agreements signed since those days have facilitated lower prices, more freely moving “factors”—economist-speak for the goods that companies take in and process into goods that they then sell—and more freely moving labor.

Free trade agreements, in this way, have resulted in a broader range of goods for American consumers and American companies and have produced them at lower prices than heretofore.

The hint is this: if no one in the private sector wants a part of a deal, it’s likely to be a waste of taxpayer money for the Ex-Im Bank to get involved.

Some supporters of the function of an Ex-Im, if not of the bank itself, mention as William Galston did in a recent Wall Street Journal op-ed that

Ex-Im supported the exports of more than 3,400 small businesses that probably could not have obtained commercial financing, for reasons unrelated to the creditworthiness of the prospective borrowers or to the quality of their proposed transactions.

There is, however, nothing stopping those small businesses from forming their own private-enterprise association to support each other with such needed financing.

Galston cited other supporters who see the aircraft industry as an industry desperately needing the Ex-Im Bank [emphasis added].

[T]he manufacture and sale of commercial aircraft is far from a free market. Boeing’s major competitor—Airbus—receives massive export subsidies from a European consortium. In the best case, Europe and the US would negotiate the mutual elimination of subsidies. But until that happens, say Ex-Im’s supporters, it would be self-destructive for the US to stand down unilaterally.

These supporters, apparently, think this is another area where the US should lead from behind.

No, let the Ex-Im’s authorization expire, say I.

Wasted Money and the VA

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Only this time, it’s not the VA’s fault.

Veterans Administration hospitals have spent at least $420 million on solar panels and windmills while vets wait months—or even lay dying—to see a doctor.

In total, VA hospitals reported 23 deaths due to 76 instances of delayed care, an April 2014 VA fact sheet said. Then on June 5, Acting Veteran Affairs Secretary Sloan Gibson revealed that at least 18 Phoenix patients died while waiting for treatment on a secret list kept off the books. It is not clear if that number is in addition to the 23 deaths reported earlier.

In truth, though, this failure, appalling as it is, isn’t the VA’s fault. This failure relates to the color of money: money appropriated for this purpose (physical plant improvements, for instance) cannot be redirected for that purpose (an HR move toward increasing numbers and availability of medical personnel, say) by the VA (in this case); such a redirection requires a change to the specific budget law that appropriated the two sets of funds.

The fault here lies in the misallocation of those $420 million—and that’s in the hands, ultimately, of Congress (both parties’ worth), even if “informed” by “environmentalists” and the VA management who assembled the original budget request.

“Green” Energy Loans Have Consequences

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Fisker Automotive—the US electric car company that failed to repay roughly $139 million in federal loans [out of an original loan total of $192 million] before going bankrupt—is now owned by a Chinese company eager to unleash its cut-rate acquisition on the American auto industry.

The company’s assets were acquired earlier this year by China’s biggest auto parts supplier, Wanxiang Group, for $149.2 million in a US bankruptcy auction.

And

Wanxiang acquired A123 Systems [Fisker’s battery supplier] in a 2012 bankruptcy sale, after the company failed to repay millions to the same federal loan program that helped Fisker.

And

[Wanxiang] plans to produce the vehicles in Finland

Despite that wonderful record—which includes two failures in its five loans before the program was suspended—DoE intends to restart the Advanced Technology Vehicles Manufacturing Loan Program that was responsible for those losses. But it’s all good:

The department said it revised the application processes for the Advanced Technology Vehicles Manufacturing Loan Program to speed up reviews, and is reaching out to manufacturers of auto parts and components to participate.

Yet this will allow for even more slip-shod DoE “vetting.” And now they’re actively pushing more loans? See here for how well suited the Federal government is for managing business programs.

And never mind that the Obama administration’s DoE “green” energy loan program is such a success that that American electric car company that defaulted (some might say welched) on a DoE energy loan is now a People’s Republic of China electric car company.

Sort of like the bailout of a couple of failed American car companies was so successful that one of them is now an Italian car company.

Spending on Education

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…and education results turn out to be wholly independent of each other—that is, spending more and more hasn’t produced better and better outcomes for our students—it hasn’t had any effect at all.  It’s been a waste of our tax dollars.  This is clearly indicated by Cato Institute‘s Andrew Coulson’s report State Education Trends: Academic Performance and Spending over the Past 40 Years.  What Coulson found is illustrated by this statement early in the report:

The state-by-state results of this investigation are reported in the subsections that follow, but the overall picture can be summarized in a single value: 0.075. That is the correlation between the spending and academic performance changes of the past 40 years, for all 50 states.

At the risk of lecturing to the choir, correlations run from 0.0 to 1.0 with 1.0 being perfect correlation—every bit of the effect being looked into is, in some sense, “explained” by the correlates.  0.0 means that there is no correlation at all, there is no connection between the two correlates at all.  In this case, 0.0 would mean there is no connection whatsoever between spending on education and educational outcomes.  That correlation of 0.075 isn’t materially different from 0.0.

This graph should drive the point home:

Notice that: spending goes up and up and up, and employment (teachers and administrators) goes up and up.  Enrollment—the number of students reached—stays flat.  The performance of that static number of students…stays flat.  As a nation (keep in mind, this is state-level spending; this study didn’t get to Federal spending, which would only add to the amounts wasted, for reasons that become obvious below), we’re spending more and more per student, we’re spending more and more per unit of student performance, and we’re not impacting that performance.  This failure has been going on for nearly 45 years, too—more than two generations of kids.  Our kids’ kids aren’t even benefitting from this government spending.

What was that about doing the same thing over and over while expecting different results?

Here are a couple of graphs for specific states, one relatively blue and one relatively red, that further illustrate the point:

And

Again, spending is up, and performance, now assessed by SAT scores, is unaffected.

Of course, there are naysayers about these results.  New Mexico Voices for Children, for instance, had this to say:

The Cato report assumes that education money is spent the same way it was in the 1960s and ’70s.  In fact, schools have been mandated to provide many more services—special education, after-school programs, computer sciences, etc—and today’s classrooms require much more technology than they did in the days of the mimeograph.

All true.  And all with no effect on those reading, math, science, or SAT scores.

Others insist that, since the number of students taking the SAT has more than doubled in the last 25-30 years, those scores would, of course, flatten out.  But this beef ignores the fact that Coulson provided such demographic adjustments (and others, based on race, socioeconomic status, and so on), and the results didn’t change.

The bottom line is that, at best, spending money (especially increasing amounts) on technology for tech’s sake, on after-school programs to provide extra time away from home for the kids, etc is a waste.  Spending money on increasing numbers of personnel to run these programs, or to supervise the additional personnel, even on more teachers per “classroom” has no effect.

We need to get back to basics, and focus spending on these subjects: reading, writing, arithmetic—the classic three Rs—and add to the mix, throughout K-12, American history/civics and budgeting/finance/economics, and teach these only.  Full stop.

Anything extra should come at the expense of the local community that wants the extra, not at the expense of other communities in a state, or in the nation.

 

h/t Watchdog.org