Wednesday, February 18, 2009

Graph of the day 

That's right, the slope is negative. Graphic courtesy Marginal Revolution. Unlike many, I don't find this graph at all surprising. To get the bill through the Senate you need sixty votes, which means each state has two opportunities for pork. I pointed out last September research suggesting smaller states do better in earmarks. Given Michigan and California, it's probably also true that unemployment rates are higher in larger states.

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Thursday, January 29, 2009

Non-cooperative solutions 

I had read this list of 10 worst pork economic stimulus requests made by Minnesota cities yesterday but had not commented on it. While I think Tom Steward is a fine political observer and supporter of conservative causes, I'm not as keen of this particular list.

Imagine: You are a college student and a member of a group on campus. Your group is going out for pizza and the bill is to be shared. Common practice is to split the tab. The pizza arrives. What happens? Everyone grabs, eats quickly. There is no incentive to conserve. Even trying to look noble and restrain your appetite does no good, because others are also facing the same incentives and gorge themselves. Seeing this is hopeless, you do too. In economics, we would say the marginal cost of eating another slice is zero. If you paid by the slice, you'd eat less (MC > 0).

The same is true with this Conference of Mayors. The Obama Administration has said it wants to spend gobs of money. The marginal cost to you of proposing one more program is zero. Indeed, if you do not get any of the money and some other mayors do, your opponent in the next election will say you are ineffective because you didn't bring enough slices of pork pizza back home. Principled stands of "no pork" are expensive -- look no further than the beating some representatives here in Minnesota took for deciding against seeking earmarks.

If all the mayors could get together and decide the size of the stimulus package, it might not be as big as this one is because their fingerprints are on it. They might choose to cooperate if they could negotiate. Since the size of the package is already set, and since others are feasting, there is no incentive to hold back on your own requests. Thus waste abounds, from skateboard park to snowmaking machines. The incentive to be frugal has been killed in D.C.

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Friday, September 12, 2008

Who gets earmarks? 

With all the discussion going on of earmarks and Alaska, I thought I would bring a couple of papers that might clarify the debate. �Melissa Boyle and Victor Matheson of Holy Cross recently wrote a short paper on the determinants of earmark spending. �It fits a few points that are important:

  1. The party in power gets more earmarks. �Their study looks at 2000 through 2006, and Republican senators were able to get more than Democratic senators.
  2. The more senior that senator is, the more powerful they are and the more earmarks they can steer home.
  3. Because, unlike the House, the Senate provides two seats to each state, smaller states will have a larger per capita figure as they have disproportionate power in one half of Congress. �(This is, as they mention, the Constitutional compromise that helped end the Articles of Confederation.) �

Now that description all points to one guy, Sen. Ted Stevens, who happens to be the senator of the state from where Gov. Palin hails. �Regardless of her actions, that state was bound to get a disproportionate share of earmarks, according to the Boyle and Matheson estimates. �They also cite Bernhardt, Dubey and Hughson (2004) and Knight (2004) as providing supporting evidence.

I wrote to Matheson (a Minnesota native, we have a good mutual friend) who indicated that he was supportive of Senator Obama in the presidential race. �I had thought that perhaps density or share of land held by the federal government -- a big issue in the West and in Alaska -- might be an explanatory variable. �He hadn't tested that, but makes the good point that money for federally owned land may come through regular appropriations, not an earmark. �Regarding the small state hypothesis, note that the second highest state in per capita earmarks is Hawaii. �

I asked Matheson if he could check the residuals, which might indicate who is 'porkier' than the others. �The scores kind of surprise me. �Here's what Matheson found:

Arizona has the eighth "best" residual (behind both Joe Biden's Delaware and John Kerry/Ted Kennedy's MA). Alaska is dead last. IL comes in with a residual right around $0. The residents of Alaska averaged about $450 more per year in earmarks than one would expect even despite their small size, Republican delegations, and senior senator tenure. AZ received about $120 less than one would expect. Residents of Delaware received $165 less per person than would be expected. It should be noted that Delaware residents actually receive slightly more than AZ residents but they come out better in the residual comparisons because being a smaller state and Biden having more tenure than McCain, we would expect them to be raking in a lot more.

He's a bit more muted on Obama, who as a freshman senator you would have thought would come up on the short end of the earmark stick (and his state is pretty good sized.) �But the nature of those earmarks -- for projects that helped political backers or for the place his wife works -- might raise some extra scrutiny. �So too are these votes. Matheson also notes that the results might make Republicans look the worse because of Lord Acton:

Thus the real answer may be that absolute power corrupts absolutely and that the Democrats may overtake the Republicans as the biggest crooks once the upcoming election winds up. No way to tell with the current data, however.
That's why there are still political analysts.

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Saturday, July 26, 2008

Stop the Pork #2 

In this post, I mentioned Congressman John Kline's pork busting effort, his website, Stop the Pork - where you sign the petition to say, "enough is enough" get control of US spending!

Today's Wall Street Journal notes on the Opinion Page, "Voters Want Less Pork, Even in Their Own District." As an active supporter of John Kline, I was glad to see this. Some letters to the editors slam Congressman Kline for taking his strong stand against pork. Turns out, this "get me my money" attitude represents the minority. Kline supporters are in the majority.

The Club for Growth recently conducted a nationwide poll on government spending, and the results were exactly the opposite of what most politicians have been saying for years. Voters are fed up with Washington's out-of-control spending. Bringing home the bacon is NOT what people want. Rather this earmark practice is simply funneling money to special interest groups, including local politicians. Voters want officials to cut the fat.

Survey Question: All things being equal, for whom would you be more likely to vote for the U.S. Congress: 1) A candidate who wants to cut overall federal spending, even if that includes cutting some money that would come to your district or 2) A candidate who wants to increase overall spending on federal programs, as long as more federal spending and projects come to your district?"

The results are unambiguous:
Voting Subset.......Candidate.....Candidate
General Voters.......54%................29%
Independents........61%..............not specified
These results indicate the Democrat Party mantra of tax and control, raising taxes everywhere are NOT what we, the taxpayers, want. Reminder, the MN legislature, now dominated by Democrats passed the largest tax increase in 150 years in 2008. We pay more for anything and everything we buy, use, etc. Obama wants to increase taxes for all Americans, across the board.

People, it's our money and while we're telling "them" to stop, we also need to vote in people who will stop. As Kline indicated on his blogging conference call Thursday morning, the Democrats in the US Congress have now decided that there will be zero appropriation bills because the Democrat chairman of the appropriations committee, David Obey, is afraid to address the real issue, pork. It's time to hold Congress accountable. Vote in DC politicians who believe in sound fiscal policy - as Nike says, "Just Do It."

Updated 7/26

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Monday, March 31, 2008

El Tinklenberg -- pro-earmark candidate 

Elwyn Tinklenberg, running for the Congressional seat in the Sixth District, attacks incumbent Michele Bachmann for her vow to forgo earmarks this legislative session.

When 6th District Rep. Michele Bachmann recently pledged not to use the earmarking process to obtain federal funding, she could not have foreseen the emergency closing of a bridge in the heart of the largest city in her congressional district.

Therein lies the problem with taking extreme political positions that leave no room for the unexpected.

The Office of Management and Budget generally defines earmarks as "add-ons" to a general appropriation that direct additional spending to a very specific project. The problem being that too often the earmarks are "dropped" into committee reports and never seen by most of the Congress.

In 2005 earmark appropriations were estimated to total $18 billion. It was then that President Bush urged the Congress "to reform the budget process and expose every earmark to the light of day ... ."

The now-infamous $223 million "bridge to nowhere," in Alaska (almost as long as the Golden Gate and higher than the Brooklyn Bridge but only connects the 50 or so residents of Gravina Island to a city of 8,000), was an earmark obtained by Alaska Republican Congressman Don Young and often used as an example of earmarking excess.

Yet instead of citing the abuses of Young, Bachmann often is critical of Minnesota colleagues such as Jim Oberstar and Colin Peterson, who understand that earmarking is a legitimate response to important needs such as the I-35W bridge.

Well, El, our criticism of the Oberstar earmarks is not about the bridge but about the trails. Oberstar was quite proud of his 2005 bill that kicked a goodly bit of money into trails (I cannot even count them all.) But we continue:

The concern is that not all earmarks are "bridges to nowhere."

In fact, the emergency situation created by the closing of a bridge across the Mississippi in St. Could is a classic example of a time when earmarked funds can be an appropriate process. With what we know now, it's not clear that the DeSoto Bridge can be repaired, and there is some speculation it may stay closed until it can be replaced.

Originally scheduled to be replaced in 2016, that schedule could be accelerated if federal dollars could be secured to help pay for a new bridge; however, that appropriation would be an earmark � hence, the problem with Bachmann's pledge to not take earmarks for her district.

If the De Soto bridge is a project worthy of federal funds, then let Senators Klobuchar and Coleman and Rep. Bachmann enter a bill for the money. It may be attached to another bill for passage, but it would be owned by those people asking the government to spend the money.

My good friend Gary Gross comments in the chat on this article that the I-35W bridge is not an earmark. It was an appropriation and centerpiece of the legislation. The earmark reform people want is for spending to be accountable, not to forswear ever having an appropriation go to a specific project. To use the definition Tinklenberg chooses here would make the Tennessee Valley Authority an earmark.

But even more interesting is that Tinklenberg, rather than tack towards Bachmann on the earmark question, is willing to take a pro-earmark position. John Fund reports (quoted by the Club for Growth here) that Congress cannot get itself off the earmark habit even when it sees polls that strongly oppose it. It appears that the ability of people to even track them is being made more difficult now. Elect Tinklenberg, and he'll have an easier time sneaking a few in for us.

Hardly a profile in courage there. If he's going to be pro-earmark, you'd think he'd not want to hide his grabbing hand.

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Wednesday, March 12, 2008

Did she take the pledge? Yes 

The Club for Growth has been seeking congresspeople who will take a pledge to forgo earmarks. Rep. John Kline announced his decision to forswear pork last July. A list the Club put up in January included members of Reagan 21, a group of Republican legislators who commit to Reaganite principles including the ending of all earmarks. One of the legislators on the list is Rep. Michele Bachmann of Minnesota, who is a member of Reagan 21. I had not seen any press release on this pledge and I had asked before about it, receiving a noncommittal answer. Last night I asked again about this, as there had been no correction on the CfG page when they updated it this week. This morning I received an email from her office confirming that she has in fact taken the pledge to forgo making any earmark requests "while fighting to reform the broken system."

For supporters of limited government, this is great news.

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Tuesday, March 11, 2008

Earmarks here and there 

I was invited by Gary Gross to submit a couple of questions to his interview of Pat Toomey of the Club for Growth. One of the questions I asked was about earmarks.
Q: Do you believe that earmark reform is an issue that will resonate with American voters this November? Why or why not?
Yes. Grassroots conservatives are fed up with ridiculous wasteful spending that goes on in Congress and you are beginning to see that grassroots sentiment reflected in congressional activity. Last year, only eighteen congressional members eschewed earmarks. Only two months into the new year, a growing number of congressmen are taking an earmark moratorium, with the list currently at twenty-five House members and six Senators, including Rep. Henry Waxman, the first House Democrat to reject earmarks. The Club for Growth maintains a list of these congressmen, updated as appropriate, which you can see here. It is clear that congressional members are beginning to realize that this is an issue that is important to voters.
The latest issue of the Minneapolis Federal Reserve's FedGazette highlights pork-barrel spending. From the cover article:
In a classic 1981 paper in the Journal of Political Economy, Washington University economists Barry Weingast, Kenneth Shepsle and Christopher Johnsen used public choice theory to explain why politicians don�t insist on economic efficiency.

They developed an economic model of public choice mechanisms comprising a representative legislature to explain �distributive or pork barrel projects,� defined as projects whose benefits �are geographically concentrated and whose costs are spread through general taxation.�

The economists first set a benchmark for efficient expenditure of taxpayer dollars and then compared that to results from a model in which legislators were elected by geographically defined districts but financed expenditures through taxes raised from the public at large. They found systematic bias toward inefficiently large projects. �The districting mechanism in conjunction with the taxation system provides incentives to increase project size beyond the efficient point by attenuating the relationship between beneficiaries and revenue sources.�
The article goes on to note additional research that the amount of pork requested falls as the share borne by the local district increases. You will note that many local leaders complain when an earmark contains a requirement to "raise taxes" to match or supplement the earmark. But this is a perfectly good mechanism to keep earmark requests down. Smaller places have greater incentives to impose the cost of their pork on others, as the map below shows.

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Monday, July 23, 2007

Who called for these earmarks? 

That's what The Examiner wants to know.
Here are the earmarks identified for Minnesota, which total $7,155,000. Check out the earmarks for your state and then call your congressman and ask if he or she sponsored any of your state's earmarks. If the answer is yes, ask why the congressman's name isn't on the earmark. If you recognize the institution designated to receive the earmarked tax dollars, call them and ask them what they intend to do with your money.
There's one for the other states, so if you're not in MN there's a list for you. On this list is $400.000 for "St. Cloud State University for the Science Initiative of Central Minnesota for curriculum development." That would be this organization, which has helped our university create a new masters in regulatory affairs; that's right, you can get a masters degree in how to navigate the Federal regulatory system to get your medical device to market. Bureaucracy has created a new field of study.

I am inquiring to see who our benefactor is and have dropped a note to . Who knows? We might throw them a party! I'll let you know if I get any response.

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