waste

Not at all, to be honest. For starters, the very notion of stimulus violates basic economics. Taking money out of the economy and then putting it back in has no net effect. But it gets worse. Much worse.

When that money is put back into the economy, it goes to the weirdest places — $3.4 million is going to Florida to build a tunnel under U.S. Highway 27, so turtles can cross safely. A fish hatchery in South Dakota is getting $20,000 for new light fixtures. $50,000 is being spent to resurface a tennis court in Bozeman, Montana.

And so on.

These boondoggles aren’t getting nearly enough press. To help fill the vacuum, the good folks at Citizens Against Government Waste have put up a new website, MyWastedTaxDollars.org. Click on over and check it out. The best feature is an interactive map that shows just how unwisely stimulus funds are being spent all over the country.

Stimulus is worse than a zero-sum game. It is actively harmful. It is government saying that it knows how to spend your money better than you do; stimulus is the ultimate act of hubris. Kudos to CAGW and MyWastedTaxDollars.org for providing hundreds of examples of why government hubris should be replaced with government humility.

Some of the stranger governmental goings-on I dug up over the week:

-EnergyStar has been certifying bogus products, such as a gas-powered alarm clock and a space heater with a feather duster stuck in it. Out of 20 fake items that the GAO submitted, 15 were approved, 2 were rejected, and 3 received no response.

-NASA spent $500,000,000 on a launching pad for a rocket that will probably never be built.

-In Norfolk, VA, it is illegal for hens to lay eggs between 4:00pm and 8:00am.

-In Minnesota, it is illegal for women to play Santa Claus.

-In California, it is against the law to enter a restaurant on horseback.

-From Jeff Flake’s office: The federal government is spending $935,000 on pasteurizing shell eggs in Michigan.

-The federal government is spending $73,000,000 this year on the Agricultural Water Enhancement Program.

New York City’s public schools spent $18,365 per student in the 2007-2008 school year. That spending has been growing at more than double the rate of inflation over the last decade. That’s a lot of money. But since it isn’t spent very wisely, nowhere near that amount actually reaches the classroom.

Instead of firing teachers for incompetence (and sometimes worse), the district re-assigns bad teachers to “rubber rooms,” where they do nothing except receive their full salary. Maybe play Scrabble or surf the Internet. But mainly sit around and get paid.

Average teacher pay in New York City is approaching $70,000. There are about 700 teachers in rubber rooms. Assuming the rubber room teachers draw roughly average salaries, we’re talking about as much as $50 million that never makes it to the classroom from rubber rooms alone. That’s nearly $50 per student right there.

To make up for some of the money that gets lost in rubber rooms and central offices, schools often have fundraising events like bake sales.

Well, not anymore. At least not bake sales. Those are basically banned in New York City. Mayor Bloomberg and the city’s Department of Education worry that bake sales contribute to child obesity.

Bake sales are technically still legal. But only approved foods can be sold. And only at approved times. And never before the end of lunch hour. And you have to keep detailed records. And so on.

Complying with all the rules is just too difficult for a school basketball team raising money for a new scoreboard, or to cover the cost of traveling to a tournament.

Anything goes after 6:00 pm, food-wise. But hardly anybody stays in school that late. PTAs are given a longer leash. But even they cannot hold more than one bake sale per month.

(Hat tip: Fran Smith)

The Chicago Tribune has a jaw-dropping story of regulators gone wild:

Department of Health inspectors seized, slashed open and poured bleach over thousands of dollars of local peaches, pears, raspberry and plum purees owned by pastry chef Flora Lazar… Inspectors cited no health problems with any of the food.

And that’s just the beginning. Read the whole thing. This is a scandal. Ms. Lazar is out of business for six months and has lost about $6,000. There is no evidence of harm. This is no way to treat a small business. Especially during a recession.

(Hat tip: the ever-resourceful Brian McGraw)

The federal government’s $800 billion stimulus package, which failed to cut unemployment, is now forcing states and local governments to raise taxes. The Wall Street Journal describes how “stimulus dollars came with strings attached that are now causing enormous budget headaches . . . At the behest of the public employee unions, Congress imposed ‘maintenance of effort’ spending requirements on states. These federal laws prohibit state legislatures from cutting spending on 15 programs,” such as ”welfare, if the state took even a dollar of stimulus cash,” even if a state’s tax revenue has since fallen due to the recession.  “So when states should be reducing” their spending ”to match. . . lower revenue collections, federal stimulus rules mean many states will have little choice but to raise taxes.”

Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package actually would shrink the economy “in the long run.”  Unemployment has skyrocketed past European levels, as big-spending countries have fared worse than thrifty ones.

The Washington Examiner says that “75,000 jobs” Obama has claimed credit for are “clearly imaginary” or “highly doubtful.”  That includes thousands of jobs the administration claims credit for creating in nonexistent Congressional districts. As the Examiner notes:

If his stimulus program was approved, Obama promised, unemployment would not go above 8 percent this year. The reality is that it passed 10.3 percent in October. So now the stimulus books are being cooked to mollify an anxious public worried that real-world jobs continue to disappear and angry that Obama has thrown almost $1 trillion down the stimulus rathole.

The stimulus package actually destroyed thousands of real world jobs by triggering trade wars with Canada and Mexico that killed jobs in America’s export sector (the stimulus package barred a measley 97 Mexican truckers from U.S. roads, a minor NAFTA violation that led to massive Mexican retaliation against U.S. exports of 40 farm products and kitchen goods worth $2.4 billion).  It also is wiping out jobs by inflicting costly mandates on state governments (such as repealing welfare reform, and imposing costly “prevailing wage” regulations and expensive racial set-asides).

The stimulus package has since spawned countless examples of government waste and corruption.  Recently, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento.  Obama’s alleged justification for firing the inspector general turned out to be false.

A politician wasting taxpayers’ money is generally not surprising. A congressman spending nearly $13,000 on a telephone town hall meeting, though, certainly is.

Last week Representative Ron Klein (D-Fla.) spent $12,964 of federal money to hold a town hall meeting on health care reform by way of a conference call. The Palm Beach Post reported that the call lasted approximately 70 minutes and had 6,350 listeners. Some have suggested that one of the reasons that Klein held the meeting over the phone was to avoid anti-socialized health care crashers.

This isn’t the first time Klein’s wasteful spending has graced the pages of CEI. Rep. Klein is famous for his co-sponsoring of the Homeowners’ Defense Act, a bill that would promise federal money for state-run insurers in the event of catastrophes like hurricanes. CEI’s Center for Risk, Regulation, and Markets refers to the bill as the Beach House Bailout bill, saying that the legislation would make the whole country pay to subsidize the insurance of those living in riskier areas like Florida.

Waste: Uncovering the Global Food Scandal, a new book by British author Tristram Stuart, will soon be hitting shelves in the UK and the US. It’s is a detailed indictment of the massive amount of edible food that industrialized countries throw away, both in the factory and at home. “In America, around 50 per cent of all food is wasted,” the Telegraph summarizes, “while over here [in the UK], we dump 20 million tons of food every year. Put all this together and—to make a wearisomely predictable but inescapable point—you could easily feed the world’s hungry several times over.”

The Movement Behind the Man

Both the book and its author have close ties to a new kind of conservationism, colloquially known as “freeganism.” Members of the movement cut down on waste—and make a point at the same time—by living partially or entirely off of food they find in other people’s trash. Lars Eighner described the practice in his famous essay “On Dumpster Diving,” and freegans like Stuart have turned that efficiency into advocacy. The Guardian described their message: “If we waste less food, we’ll need less land to grow it on, and hence will cut down fewer trees; we’ll use less water to irrigate that land and less carbon to transport and process the food it produces.”

dumpsterdiving

One man's trash is another man's lunch.

That message is catching on. A Welsh millionaire and professional sculptor has taken up the freegan lifestyle, inspired by his experiences with discarded electronics in Japan. A new website, freegan.info, notifies the community about big scavenging opportunities like college move-outs.

The relentless drive for efficiency has motivated some excellent innovations. Stuart himself claims to make cottage cheese from leftover custard donuts. Food banks have expanded, particularly in the US, to help grocery stores donate their unsold extras to the homeless. At the same time, Stuart leaves some questions unanswered. Waste criticizes stores and factories for overstocking their products, but as the Financial Times points out, overstocking can make good economic sense. How can what looks like a complete waste of private property be the daily routine of a profitable, competitive industry?

Questions like that aren’t particularly important to culture and lifestyle, and they’ve rightly taken a back seat to more pressing issues, like how to make cottage cheese. Inevitably, though, freeganism and other conservation movements are growing out of private life and into public policy. In the halls of government, those nagging questions of efficiency are critically important, and the economic underpinnings of this cultural movement will demand some scrutiny.

As it turns out, Stuart makes a common but crucial mistake. He ignores the invisible. With all the focus on obvious waste—dumpsters, landfills, and so on—it’s easy to forget that our most precious resource is something we never find in those places. And no, I’m not talking about air.

The Question Restated

nails

Paying less for a better product.

When we recall the industrial successes that have shaped modern life, we usually think of new inventions—plastics, automobiles, and so on. The greatest victories of industry, however, came not from new products but from making old products cheaper. Most of what we consume today—food, clothes, housing, refrigeration, steel, light, and so on—has been available for centuries. Our products are usually nicer, but the biggest difference is the price.

It’s not immediately obvious why our goods should be so cheap. After all, the nails I buy in a hardware store are made with machines vastly more expensive than the forges and hammers blacksmiths once used. They’re also shipped farther, and their quality is more consistent. By all rights they should cost more than they used to, but instead they cost orders of magnitude less. Why?

In Nature, Much Goes To Waste

Although a wire nail requires more machinery, electricity, and gasoline than the cut nails and hand-made nails that came before it, it demands much less of one crucial ingredient: human effort.

The most important resource in the world is us. Our labor and our time. Our blood, sweat, and tears. Things that still take a lot of human effort to make are expensive. Nearly everything else is cheap, because we’ve figured out how to get it without working so hard.

gdp

What capitalism has done for you lately.

If we look at the history of America’s GDP per capita, a rough estimate of how much stuff the average American made each year, we can see that process in motion. The typical worker in 1790 had a harder job with longer hours, yet he produced forty times less than he would today. Forty times less. Compared to the modern workforce, early American workers wasted more than 98% of their time and energy.

As human effort has become more productive, it has also become more expensive. Many early conservation practices—using the entire buffalo, so to speak—no longer make sense now that the proverbial buffalo is cheap and the labor to process it is expensive. This is what Tristram Stuart is missing when he criticizes our overstocked grocery stores and factories. True, their garbage is red ink on the balance sheet, but getting rid of it requires learning more about what customers will buy and applying that knowledge at every stage of production. That costs precious time and effort, which are too valuable to waste on a problem that overstocking solves so cheaply.

Once again, the answer to our question is Henry Hazlitt’s most important lesson. The challenge of economics is to mind all costs, both the obvious, like a pile of garbage, and the invisible, like an hour misspent.  Human effort is our dearest resource, and we should be happy to spare it even at great material expense. Conservation movements all too often neglect these human costs, and if our governments make the same mistake, we’ll find ourselves a good deal poorer with no idea why.

Obama’s $800 billion stimulus package was purged of most investments in roads and bridges, and filled instead with welfare and social spending, out of political correctness, after feminist leaders complained that building and repairing roads and bridges would put unemployed blue-collar men to work, rather than women.

Christina Hoff Sommers points out that “of the 5.7 million jobs Americans lost between December 2007 and May 2009, nearly 80 percent had been held by men. . . .Men are bearing the brunt of the current economic crisis because they predominate in manufacturing and construction, the hardest-hit sectors, which have lost more than 3 million jobs since December 2007. Women, by contrast, are a majority in recession-resistant fields such as education and health care, which gained 588,000 jobs during the same period.”

But when the Administration floated the concept of “an ambitious . . . stimulus program to modernize roads, bridges, schools, electrical grids, public transportation, and dams” as a way of “reinvigorating the hardest-hit sectors of the economy,” “Women’s groups were appalled,” asking “Where are the New Jobs for Women?” and denouncing what they called “The Macho Stimulus Plan.”

The Obama Administration quickly knuckled under to this pressure, replacing its recovery package with an $800 billion stimulus package that instead “skews job creation somewhat towards women” by spending money instead on social services like welfare that are administered mostly by female employees.

“A recent Associated Press story reports: ‘Stimulus Funds Go to Social Programs Over ‘Shovel-ready’ Projects.’ A team of six AP reporters who have been tracking the funds find that the $300 billion sent to the states is being used mainly for health care, education, unemployment benefits, food stamps, and other social services.” Or, as another AP report put it, “Stimulus Aid Favors Welfare, Not Work, Programs.”

The stimulus package also repealed welfare reform, as Slate’s Mickey Kaus and the Heritage Foundation have noted. Obama ran campaign ads claiming to support welfare reform, even though he had actually fought against meaningful welfare reform as an Illinois legislator. The stimulus package largely repeals the welfare-reform law passed by Congress in 1996.

Obama claimed the stimulus package was needed to prevent the economy from suffering from “irreversible decline,” but the Congressional Budget Office admitted that the stimulus package would shrink the economy “in the long run.” The stimulus package has since destroyed thousands of jobs in America’s export sector, and subsidized countless examples of government waste and corruption.

Recently, Obama fired an inspector general, Gerald Walpin, who uncovered millions of dollars of waste and fraud in the AmeriCorps program, including by a prominent Obama supporter, endangering the Obama supporter’s ability to administer federal stimulus spending in Sacramento.

The stimulus package also imposes on states racial set-aside requirements and prevailing-wage requirements, which increase the cost to taxpayers of government contracts. The prevailing-wage requirements will inflate the cost of state construction and transportation projects by at least $17 billion. Racial set-asides also are very costly to taxpayers.

The $800 billion stimulus package signed by Obama not only will make the economy shrink over the long-run, it will pay $88.6 million for unnecessary new construction in the Milwaukee School District, whose enrollment is shrinking so fast that it already has 15 vacant schools. And it will funnel over $355 million into the corrupt, racist Detroit schools, no strings attached.

Detroit is the fastest-shrinking big city in America. It once had two million people, but it has lost so many people that now it has only 800,000 residents, even as population in its suburbs holds steady. Its city council is blatantly, unapologetically racist toward white and Asian residents, something Obama’s Justice Department ignores.

Stock markets, which earlier fell after the Administration’s $8 trillion in new deficit spending spooked investors, are rising today on speculation that costly mark-to-market accounting rules will be suspended. But the Treasury Department says that the rules, which have been described as some of the “most destructive policies of the Bush Administration,” will merely be tweaked. If such rules had been in effect in the 1980s, “every major commercial bank would have collapsed.”

The stock markets fell like a stone since the Obama Administration pushed through its bailout and stimulus packages. Investors were spooked, as Stanford University economist Michael Boskin noted in his Wall Street Journal column, “Obama’s Radicalism Is Killing the Dow.”

Working in Washington, D.C. for the last decade, I’ve become familiar with the experience of criminal conduct in city government. The city sports a culture of corruption so brazen that it has included everyone from the (former) mayor down to local beat cops. The crimes perpetrated include everything from selling drugs to demanding kickbacks from government contractors to a $50 million embezzlement scam perpetrated by local tax officials.

It is therefore with a spirit of weary amusement that I read about a group of Chicago Public Schools officials and their recent purchase of $67,000 worth of espresso makers:

Chicago public school bureaucrats skirted competitive bidding rules to buy 30 cappuccino/espresso machines for $67,000, with most of the machines going unused because the schools they were ordered for had not asked for them, according to a report by the CPS Office of Inspector General.

That was just one example of questionable CPS actions detailed in the inspector general’s 2008 annual report. Others included high school staffers changing grades to pump up transcripts of student athletes and workers at a restricted-enrollment grade school falsifying addresses to get relatives admitted.

In the case of the cappuccino machines, central office administrators split the order among 21 vocational schools to avoid competitive bidding required for purchases over $10,000. As a result CPS paid about $12,000 too much, according to Inspector General James Sullivan. “We were able to find the same machines cheaper online,” he said.

So is that the problem – not that someone spent $67,000 on fancy coffee makers – but that they paid slightly too much for them? Would things have been acceptable if they had ordered them off of the website the IG found for $1,833 each instead of the actual purchase price of $2,233? More importantly, are they keeping them or can I buy one off of eBay at a massive discount?

One more thing: D.C. has, of course, had plenty of public school officials playing fast and loose with government money as well – amazingly, some of them even went to jail! In their defense, though, D.C. public school employees can be forgiven for thinking the District has an unlimited supply of cash. We spend about $24,600 per pupil per year — about $10,000 more than the average for area private schools.