Monday, October 5, 2020

Artistic representation of government waste

Man Controlling Trade

"...the man‐and‐horse statue outside the FTC, which signifies the government’s heroic battle to strangle trade. " 

Link from Chris Edwards proposed museum of government failures. (The actual title, "Man controlling trade," is almost as good in an unintentional, new-Deal sort of way, but I like Chris' better. )

I was chatting with Chris and nominated the California high speed railway, which will soon be a massive Christo-scale installation, dedicated to the same cause. Imagine arching viaducts looming over the freeways, connected to nothing, like the ruins of Roman aqueducts, but unlike those never used. Like this one.   

San Joaquin River Viaduct

All it needs is a great set of plaques, installed by the new Libertarian governor of the state of Jefferson after secession, and title. "Ruins of the progressive state?" The Pont du Gard it's not, but perhaps the brutalist functionality is better for my artistic purpose. 

(Yes, California really has built expensive overpasses and viaducts before building the roadbed to which they connect, which it will likely never build.  

Question of the day: If California is going to ban internal combustion cars and trucks, just what is the point of the train? It must now be a net carbon producer.)




    And you want to point to some aqueducts and statues as your examples of government waste?

    1. So since you can't defend the obscene amount of government waste on projects like this your only recourse is to show there is other waste as well?

    2. Anonymous,

      The construction of the aqueduct and the statue can be undone by simply tearing them down. And they may yet generate a positive return on investment. The same can't be said for other forms of government waste that always and forever generate a negative return on investment.

      It's simply a matter of perspective.

    3. It is also possible that casualties of war generate a positive return. I imagine sacrifices made during WWI or WWII generated positive returns compared to the alternative.

      What is the probability that the San Joaquin River Viaduct generates a positive return in your estimation? Somewhere around 0.000001?

      Regardless, you are still apparently attempting to justify a terrible government project by pointing out that worse government actions or spending have occurred. So what? We should invest terribly now because of previous atrocities? Are you defending the specific spending projects discussed in the article? It isn't clear there is any point here.

    4. Anonymous,

      Also, the degree to which a government expenditure improves / destroys productive capacity affects how it can be financed.

      That is why governments use bonds to finance wars. A war is ultimately destructive and so bond buyers want a high degree of certainty that they (or their descendants) will be repaid in full. They could be killed in the conflict either through government mandated military service (a draft) or even as a civilian casualty.

      Contrast that with the statue and aqueduct that John mentions. Does California need to sell bonds or raise taxes to pay for these things? Absolutely not. They can sell equity instead.

      Until the economic policy making community comes to grips with the distinction between war time public finance and peace time public finance, we all suffer for their ignorance.

    5. "It is also possible that casualties of war generate a positive return."

      Seriously?!?! Tell me in what universe did the bombing of Hiroshima and Nagasaki generate a positive rate of return on investment? I am not talking about the end of the war that ultimately resulted from that bombing. Japan could have held out and watched it's entire country blown to smithereens. Same thing for Germany had it not surrendered.

      "Regardless, you are still apparently attempting to justify a terrible government project by pointing out that worse government actions or spending have occurred."

      Read the link - "Museum of Government Failures". World War I and II were failures of the various governments across Europe and Asia to resolve their differences without resorting to armed conflict - end of story. But no mention of them is given in the link. How is that even remotely possible?

      I am not attempting to justify anything. I am saying that if you are going to build a museum dedicated to failures of government, World War I and World War II would be good places to start.

  2. John,

    I presume that the San Joaquin River Viaduct was funded by some mixture of taxes and bond issues by the State of California. As such, payment of taxes for the construction of the viaduct and for making the bond payments is mandated.

    But suppose instead, the State of California had said, okay we are going to sell tax breaks at a discount (pay $1000 in taxes today to cover $1500 in taxes 5 years from now) and used the money from the sale of tax breaks to build the viaduct. Notice that it would be completely up to each individual resident whether he / she wanted to buy the tax break, and the returns on investment for the tax break buyer would be contingent solely on the individual's future tax liability.

    Would you or the Cato institute have a problem with these "boondoggles"?

    I guess the question is, do you object to the "waste of money" as implied in your short story, or do you object to the mandated taxes being used to fund these projects?

    Yes, I understand that to build the viaduct, the State of California may have exercised "eminent domain" to buy the property for the viaduct (or maybe not, I honestly don't know).

  3. Christo had a comparative advantage in wrapping. Let's wrap nothing and be done with it.

    Transportation improvements can sometimes be addressed without dependence on narrow interest groups, maybe. :-)

  4. I don't think banning intenal combustion will change the train viability, as it won't significantly lower co2 emissions. You will more electrical power on top of current production, you will start cutting emissions compared to the petrol scenario after you replaced 100% of current production.
    I don't think we will live to see that day. Maybe if they start building nukes like there's no tomorrow

    1. May I remind you the train also needs electric power, and concrete is huge carbon emitter. The case for the train is based on replacing gasoline-burning cars down I-5, not better watt-hours per mile than electric cars

    2. I thought the case for the train was mostly about speed. For replacing gasoline I both agree and stand my case: it's pointless with or without electric cars

  5. Amateur bridge design by Cal politicians, mainly Jerry Brown. He left a bridge to nowhere in San Jose, butted into the failed design of the new bay bridge, and left a huge Arch de Choo Choo over Fresno sunken freeway. The bridges generally have entertainment value.

  6. Aren't California budgets squeezed because of Covid?? Why the hell are we pushing on with this train nonsense?

  7. The Wikipedia article suggests "Man Controlling Trade" was the original title and intent, though not terribly clear

  8. did you mean 'New Deal sort of way' instead of 'start of way'?

    And I like the 'strangling trade' label better as well.

    c andrew

    1. My continuing love-hate relationship with autocorrect... Had I only paid attention in typing class 50 years ago...

  9. Worry not. Either we'll all be walking or using horses again or we'll all be driving electric cars powered by solar. Ha. I prefer the latter. Infrastructure matters, however. Look at the Romans and their construction of roads and castrums.

  10. Totally off topic, but here it goes.

    The media fascination with Wall Street ignores a significant attribute of human nature. People are more likely to take risk if they have a hand in the outcome.

    A simple example is the World Series of Poker that many people have either watched on ESPN or participated in personally. Entry fee is $30,000 (last time I checked). Suppose you had that kind of money laying around and decided to take a shot. Would you let some stranger in the crowd of spectators play your hands or would you insist on playing the hands yourself?

    This is why people need to rethink their assumptions when they say that to improve the nation's productive output, 401k plans and other retirement vehicles need to be expanded.

    Productive capacity extends beyond the reaches of the 500 companies in the S&P 500, the 20 or so companies in the DOW, or the NASDAQ, or the Wilshire, or the Russell listed companies.


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