Wasted Money

I'm curious about something. About a decade ago the LA Community College District floated a series of massive bond issues for building construction. Gale Holland and Michael Finnegan of the LA Times spent 18 months looking into how that money has been spent, and the last of their 6-part series on the building projects is in today's paper. They document boondoggles galore, including some extremely timely questions about the widespread use of politically connected "body shops" who paid the salaries of consultants at seemingly indefensible markups.

But here's what I'm curious about. The district has so far spent $2.6 billion on its construction program. I went through all six parts of the Times series, and if I added things up correctly, they identified about $100 million in wasted money of various kinds. That's about 3.8% of the total.

So is that good or bad? Serious question. If someone told you that a public agency was embarking on a multi-billion dollar building project, and in the end about 96% of the total would end up being used properly and 4% would end up wasted, would you consider that a decent outcome or not? In any big project like this, how much waste should you reasonably expect, once all is said and done?

UPDATE: I added a bit of this in comments, but just to clear up a couple of things.....

Yes, that $100 million is only what the Times uncovered. Maybe there was more. On the other hand, all I did was add up all the numbers in the series, and some of it might not really count as waste. Sometimes construction projects go over budget for perfectly defensible reasons. So that $100 million number could be either high or low.

Oversight of public programs like this is important, and I think the Times series was terrific. I'm glad they were willing to spend the resources on it. Still, whenever I see a piece like this, I automatically think in terms of percentages. Horror stories are worth telling, but I still want to know what the total damage is, and I want to know how that compares to other similar programs. After all, construction projects are famous for running into problems and going over budget, and you'd be foolish not to expect any of that in any big building program. But stories like this never seem to provide that kind of comparison, and it's one that I think is important.

Bradley Manning

No blogging for me this weekend, but I'd just like to second Jane Hamsher, Mark Kleiman, Glenn Greenwald, and everyone else who's appalled at the way we're treating Bradley Manning. If he's guilty of a crime, then try him and sentence him. Until then, as Mark says, "This is a total disgrace. It shouldn’t be happening in this country. You can’t be unaware of this, Mr. President. Silence gives consent."

Friday Cat Blogging - 4 March 2011

Today's catblogging is dedicated to that traditional favorite, cats inside of things. On the left, Inkblot is peering out of the box my new desk chair came in. It's a drafting stool, which allows me to sit higher and hopefully ease the strain on my arm and shoulders caused by typing and mousing too much. On the right, Domino is staring suspiciously outside her grocery bag because she's attracted a visitor. This means everyone gets a double dose of Inkblot this week, but who'd complain about that?

In the Boston Review, Stephen Ansolabehere and James Snyder write that the tea party movement has been overrated:

It is tempting to believe that the Tea Party endorsement moved voters. Indeed, the candidates endorsed by these groups did well: 64 percent of Republican candidates endorsed by the Tea Party Express or FreedomWorks (or both) won, while only 52 percent of non-endorsed Republicans won. The numbers look even more impressive among non-incumbents: almost 52 percent of endorsed candidates won, while only 28 percent of non-endorsed candidates won.

But the tea party groups mostly endorsed candidates in heavy Republican districts who were going to win anyway. If you take a look at the vote percentage of tea party candidates (shown with black Ts in the chart below), it looks pretty similar to the vote percentage of all the other Republican candidates:

This seems pretty plausible, especially since it matches what seems to have happened in the Senate, where tea party candidates didn't do any better — and might even have done worse — than other Republicans. On the other hand, I think it's possible that this might miss what happened in the primaries, where tea party endorsements helped power conservative candidates to victory over more moderate ones. That doesn't show up in the general election results, but it's a real effect nonetheless.

The Glenn Beck Vortex

I almost agreed to do a piece about Glenn Beck for the next issue of the magazine, but in the end I begged off. I just couldn't do it. The tipping point came a week after I'd said I'd do it, when I was in a bookstore and decided that if I was going to do a Beck piece, then I guess I'd better read his latest book. So I took a copy off the shelf and started browsing. And the pit in my stomach grew. I just couldn't dive down that rabbit hole for the next month.

Besides, I was also halfway convinced that Beck had also reached a tipping point and might very well have imploded completely by the time the magazine hit the newsstands. In the New Republic today, James Downie recounts Beck's steep decline in the ratings and suggests that the implosion might have happened already:

Beck, says [biographer Alexander] Zaitchik, was caught “in a vicious circle”: To keep viewers coming back, he had to keep creating new, more intricate theories. Last November, in a two-part special that indirectly invoked anti-Semitism, he accused liberal Jewish financier George Soros of orchestrating the fall of foreign governments for financial gain. During the Egyptian Revolution, Beck sided with Hosni Mubarak, alleging that his fall was “controlled by the socialist communists and the Muslim Brotherhood.” Beck is now warning viewers not to use Google, accusing the search-engine giant of “being deep in bed with the government.” In recent months, it seems, Beck’s theories became so outlandish that even conservatives—both viewers and media personalities—were having a hard time stomaching them. Now, each new idea appears to be costing Beck both eyeballs and credibility. “At some point,” says Boehlert, “it doesn’t add up any more.”

I caught a few minutes of Beck's show yesterday for the first time in a while, and he was rattling on about.....Van Jones. Jesus. Surely he's milked that dry even for an audience as credulous as his? And that's his problem. He either replays his greatest hits over and over, which starts to get preposterous even for his biggest fans, who must have an increasingly hard time believing that Van Jones is literally at the center of all that's wrong with the world. Or he creates ever more convoluted alternate universes that are not just harder to follow, but are also increasingly hard to believe for an audience that basically just wants to hear that Barack Obama is Satan. There's really no way off this carousel.

11-Dimensional Chess

I disagree completely with Ezra Klein's blanket statment that "No one can carry out complicated plans." People can! If you're willing to put in a lot of hard work and clear thinking, you absolutely can make complicated plans and carry them out successfully fairly often.

However, I agree completely with Ezra's specific observation that politicians are rarely as sneaky and devious and 11-dimensional-chess-ish as we think:

Partisans are very good at recognizing disarray and incompetence on their side of the aisle, but they tend to think the other side is intimidatingly capable and unburdened by scruples or normal human vulnerabilities. And there's so much press interest in Svengali political consultants like Karl Rove or David Plouffe, all of whom get built up in the press as infallible tacticians, that the place just looks a lot more sophisticated than it really is.

But I tend to be shocked at how sophisticated it isn't. Communication between various political actors — a crucial ingredient in any serious plan — is surprisingly informal and inadequate....There's also a lot less long-term planning than you might think. In general, politicians are overworked and understaffed....The most common lamentation you'll hear from congressional staffers when a legislative fight starts going badly is "didn't anyone think of this beforehand?" In general, the answer is yes, someone saw the fight over the excise tax or the expiration of the Bush tax cuts coming. They just didn't have enough time, or couldn't get their boss and the relevant principals and staff members from other offices to put aside the time, to plan for it.

I don't have even a scintilla of personal experience observing Washington strategists up close, but even from 3,000 miles away this rings true. There's no 11-dimensional chess. There are no bank shots. Virtually all political plans are straightforward efforts to figure out how to persuade more people to support you. Sometimes those plans are sophisticated and sometimes they're bumbling, but they're almost never anything other than what they seem. At most, they're hidden by the usual thin veneer of hypocrisy or self-righteousness, and that's about it.

Bernanke Betrays the GOP

Bloomberg reports that the Republican whip in the House is sad:

U.S. Representative Kevin McCarthy thought he had an ally in Federal Reserve Chairman Ben Bernanke on the impact that Republican budget cuts will have on jobs.

McCarthy, of California, the third-ranking House Republican, said this week the spending cuts won’t cost the nation jobs, pointing to Bernanke for support. Within hours, Bernanke testified on Capitol Hill that the budget reductions may lead to the loss of 200,000 jobs.

The Fed chief said the House Republican plan to slash $61 billion from 2011 government spending could also subtract “a couple of tenths” of a percentage point from U.S. economic growth over several years.

So did McCarthy change his views once Bernanke set him straight? I know you can't wait to find out, so click the link to learn the exciting answer!

Building Better Kids

We are obsessed with education in America. We are obsessed, in particular, with the notion that our schools are failing and have to be fixed. We need to test kids. We need to identify and fire bad teachers. We need merit pay. We need charter schools. We are all waiting for Superman. Philanthropists and the federal government spend billions of dollars per year on programs to promote better schools.

James Heckman doesn't quite say that this is all a waste of money. But he comes close. In a new essay summarizing his recent work on skill formation in children, he says the chart below tells you most of what you need to know about educating our kids:

The chart shows achievement test scores for children of mothers with different levels of education. Children of college graduates score about one standard deviation above the mean by the time they're three, and that never changes. Children of mothers with less than a high school education score about half a standard deviation below the mean by the time they're three, and that never changes either. Roughly speaking, nothing we do after age three has much effect:

[These] gaps arise early and persist. Schools do little to budge these gaps even though the quality of schooling attended varies greatly across social classes. Much evidence tells the same story as Figure 1. Gaps in test scores classified by social and economic status of the family emerge at early ages, before schooling starts, and they persist. Similar gaps emerge and persist in indices of soft skills classified by social and economic status. Again, schooling does little to widen or narrow these gaps.

Heckman argues that these achievement gaps—between black and white, between rich and poor—are today less the result of overt discrimination than they are of skill gaps that open up very early in life and persist in the face of a wide variety of both good and bad schools. What's more, these gaps aren't purely, or even mainly, the result of differences in cognitive ability. At least equally important are soft skills: "motivation, sociability (the ability to work with and cooperate with others), attention, self regulation, self esteem, the ability to defer gratification and the like."

Why No One Cares About Unemployment

Chris Hayes explains why Washington elites don't seem to see high unemployment as an urgent problem:

There are two numbers that go a long way toward explaining it. The first is 4.2. That’s the percentage of Americans with a four-year college degree who are unemployed....So while the overall economy continues to suffer through the worst labor market since the Great Depression, the elite centers of power have recovered. For those of us fortunate enough to have graduated from college—and to have escaped foreclosure or an underwater mortgage—normalcy has returned.

The other number is 5.7 percent. That’s the unemployment rate for the Washington/Arlington/Alexandria metro area and just so happens to be lowest among large metropolitan areas in the entire country.

....What these two numbers add up to is a governing elite that is profoundly alienated from the lived experiences of the millions of Americans who are barely surviving the ravages of the Great Recession. As much as the pernicious influence of big money and the plutocrats’ pseudo-obsession with budget deficits, it is this social distance between decision-makers and citizens that explains the almost surreal detachment of the current Washington political conversation from the economic realities working-class, middle-class and poor people face.

I'm pretty sure I've made a similar argument from time to time, and I think there's a lot to this. Hell, I'm an employed college grad who lives in an area with a relatively good economy, and I certainly don't fool myself into thinking that I have the same sense of urgency about unemployment as someone in Los Angeles or Detroit.

But I think there's another factor at work here: deep in their hearts, nobody in Washington really believes they can do anything about unemployment these days. Republicans don't truly believe in their "growth agenda," they just want to cut taxes and slash spending on social programs. Democrats would like to believe that fiscal stimulus works, but I suspect the reality is that most of them are pretty skeptical. Ditto for jobs programs, training programs, mortgage cramdown legislation, and much more.

What's worse, even if you do believe these things work, it's pretty plain that no one's figured out a way to convince the public they work. Democrats barely even tried to persuade voters that the 2009 stimulus worked, and ended up getting completely hammered on the subject by Republicans. A few would occasionally mutter on camera that things would have been even worse without the stimulus, but that's a pretty tough sell even if you say it with conviction, and very few said it that way.

In some sense, this is the ultimate triumph of conservatism: no one in Congress, and no one in the electorate, really believes any longer that Washington can do much about the economy. And even if you think otherwise, what's the point of putting your career on the line over further stimulus if you know you won't get any credit for economic improvement regardless of how it turns out?

The public believes that Washington can control inflation. They believe that Washington can control the deficit. And they believe that Washington can control taxes. But they no longer believe that Washington can control unemployment. And neither does Washington.

Where's the Conservative Healthcare Plan?

The Wall Street Journal is unhappy with President Obama's support for allowing states to opt out of his healthcare reform law in 2014 rather than 2017. Why? Because to do so, states would have to come up with a plan that offered similar coverage and benefits to PPACA:

So perhaps states could opt out of some consumer or employer mandates, which is a minor release valve. But they would still need to find other mechanisms to achieve the same liberal priorities, which in practice leaves little room to innovate—especially for a straight tax deduction or credit to purchase individual coverage or alternative insurance designs like high-deductible or value-based plans. That's why Democrats had nothing to fear from adding such a provision originally. The Wyden-Brown bill merely moves it forward by three years, to 2014.

The reality is that the liberals who wrote this bill really do think they have a monopoly on good ideas, and they do not include markets. Democrats are more than happy to give the states more freedom, as long as the states use it to impose comparable government control.

Italics mine. If this is the state of the art in conservative thinking, then yes: apparently liberals really do have a monopoly on good ideas in the healthcare arena. As Jon Cohn points out, PPACA does, in fact, allow states to offer high-deductible plans. The table on the right is from the Lewin Group, and it outlines the typical coverage offered by a "Bronze" level plan under PPACA. It's pretty stingy! The deductible for a family is $5,000, the maximum out-of-pocket expense is $11,900, and the "actuarial value" — i.e., the percentage of total medical costs covered by the plan — is only 60%. If conservatives can't come up with a plan that competes with those targets, it means conservatives don't have a plan.

Of course, states would also be required to offer subsidies to low-income residents, and the amount of those subsidies is based on the price of "Silver" level plans. But that's only slightly better, offering an actuarial value of 70%. These just aren't high bars to meet.

If conservatives don't want to make health coverage widely available, they should just say so without the shilly-shallying. But if they do want to make it available — and in public, anyway, that's what they claim — the requirements of PPACA represent the bare minimum of what you can call "coverage" and still keep a straight face. If conservatives really believe they have a better way, PPACA provides both the funding and the minimal requirements to allow them to prove it. They should get busy doing so instead of spending their time inventing feeble excuses.