Category: Government

Government Wastes Millions on Corrupt Nanotech Boondoggle

(p. A19) In Utica, a former industrial hub in upstate New York where the near collapse of manufacturing has made for a scarcity of jobs and a rarity of good news, the announcement in August 2015 that an Austrian chip maker had decided to put down roots in a fabrication plant built by the state was cause for jubilation.
Gov. Andrew M. Cuomo celebrated with an appearance in Utica, promising $585 million in state funds to cement the public-private partnership, which was to create 1,000 jobs. Some in the crowd wept with emotion.
But last week, after months of delays and mismanagement that culminated in September with federal prosecutors revealing a far-reaching bribery and bid-rigging scheme, state and local officials said that the Austrian chip maker, AMS, had abandoned the project.
The Utica project was merely one chunk of the multibillion-dollar investment with which the Cuomo administration has pledged to seed nanotechnology and high-tech industries in upstate cities starved for economic growth.
. . .
For the state, it seems, the strategy developed by Mr. Kaloyeros and trumpeted by Mr. Cuomo — to lavish hundreds of millions of dollars in state subsidies on corporate partners to create high-tech jobs — is unblemished. Yet the model has come in for repeated criticism from government watchdogs, who say an economic policy that tries to create risky new industries virtually from scratch, and that spends millions in taxpayer dollars to create every new job, is folly.
“We’re incredibly skeptical of the economic logic behind these projects because they’re too expensive,” said John Kaehny, the executive director of Reinvent Albany, a good-government group. “There is no economic logic to (p. A21) this, really. But there’s a huge political logic to it. The governor desperately needs for this to be a success for his political legacy in New York.”

For the full story, see:
VIVIAN YEE. “How Missteps Doomed Plan for Growth, Foiling Cuomo.” The New York Times (Weds., DEC. 28, 2016): A19.
(Note: ellipsis added.)
(Note: the online version of the story has the date DEC. 27, 2016, and has the title “How Cuomo’s Signature Economic Growth Project Fell Apart in Utica.”)

Government Sugar Protectionism Kills More Jobs than It Saves

(p. A13) As if domestic price-fixing by the government–here, driving prices up by setting production limits–weren’t enough, the feds then set a limit on sugar imports, and punish any imports above that limit with heavy tariffs.
The result? Countries such as Canada openly advertise to U.S. companies that use sugar–for instance, in the food industry–that they will enjoy lower business costs if they move. And when companies leave, like some candy makers that have moved production overseas, they take their jobs with them. Even the Commerce Department admits that for every job that the sugar program “protects,” it kills three others.
Reforming this policy sounds like a no-brainer, but the small number of beneficiaries use their benefits to influence–by lobbying, for instance, or with campaign contributions–politicians who block any reforms. No wonder sugar was the only commodity program not to be reformed by having its subsidies reduced in the most-recent farm bill, in 2013.

For the full commentary, see:
JOE PITTS and DAVID MCINTOSH. “Your Funny Valentine Candy Pricing; Making a box of chocolates more expensive is one of many ways federal sugar policy hurts U.S. taxpayers.” The Wall Street Journal (Fri., Feb. 12, 2016): A13.
(Note: the online version of the commentary has the date Feb. 11, 2016.)

One Way to Defend Free Trade (in Honor of Reagan’s Birthday)

(p. A9) Baldrige also knew how to use humor to deflate tense moments, as when the U.S. toy balloon industry petitioned for protection against cheap Mexican imports. Baldrige was opposed, but after debate the entire cabinet favored sanctions. Sensing this was not where the president wanted to go, Baldrige pulled from his pocket a dozen toy balloons and tossed them on the cabinet table. As the room filled with laughter, he said, “This is what we are talking about.” Reagan denied the sanctions.

For the full review, see:
CLARK S. JUDGE. “BOOKSHELF; The Cowboy At Commerce; During tense talks over steel imports, Baldrige insisted the tired Europeans work through lunch. He’d hidden snacks for his team nearby.” The Wall Street Journal (Tues., Jan. 5, 2016): A9.
(Note: the online version of the review has the date Jan. 4, 2016, and has the title “BOOKSHELF; The Cowboy At Commerce; During tense talks over steel imports, Baldrige insisted the tired Europeans work through lunch. He’d hidden snacks for his team nearby.”)

The book under review, is:
Black, Chris, and B. Jay Cooper. Mac Baldrige: The Cowboy in Ronald Reagan’s Cabinet. Lanham, MD: Lyons Press, 2015.

British Government Ignored Scurvy Cure

(p. C14) Scurvy, we know today, has a single and simple cause: lack of vitamin C. But between the years 1500 and 1800, when an estimated two million sailors died from the disease, it seemed to defy all logic.
. . .
The conventional medical narrative holds that the mystery was solved by James Lind’s announcement, in his “Treatise of the Scurvy” (1753), that it could be cured by drinking lemon juice. But in “Scurvy: The Disease of Discovery,” Jonathan Lamb, a professor at Vanderbilt University, shows that the story is nowhere near so simple and that scurvy was a much stranger condition than we imagine, with effects on the mind that neuroscience is only now beginning to elucidate. The result is a book that renders a familiar subject as exotic and uncanny as the tropical shores that confronted sailors in the grip of scurvy’s delirium.
James Lind was not the first person to recommend the lemon-juice cure. Contemporaries of Francis Drake had discovered it 150 years before, but the secret was lost and found again many times over the centuries. Some citrus juices were much more effective than others, and their efficacy was reduced considerably when they were preserved by boiling. The British admiralty ignored Lind’s researches, . . .

For the full review, see:
MIKE JAY. “The Disease of the Enlightenment.” The Wall Street Journal (Sat., December 10, 2016): C14.
(Note: ellipses added.)
(Note: the online version of the review has the date Dec. 9, 2016, and has the title “Scurvy: The Disease of the Enlightenment.”)

The book under review, is:
Lamb, Jonathan. Scurvy: The Disease of Discovery. Princeton, NJ: Princeton University Press, 2017.

Governments Encourage Drink that Consumers Are Rejecting

(p. A9) From coast to coast, urban planners are increasingly looking to craft breweries as the magic elixir to renew struggling urban cores.
Two years ago, Richmond, Va., put up $33 million in public money and incentives to entice Stone Brewing to build a retail store, tasting room and East Coast distribution center. Shortly thereafter the state of Virginia extended $1 million in grants and $1 million in matching tax credits to help Hardywood Park Craft Brewery expand into an office park in Goochland County. The Richmond Times-Dispatch reported at the time that Virginia had specifically “targeted craft beverages as part of the state’s economic development strategy.”
. . .
Small towns are getting in on the action, too. At a meeting in November, the city council of Florence, S.C., population 38,000, approved an incentive package totaling $180,000 to encourage a craft brewery to set up shop beside town hall. The month before that, the city council of Reidsville, N.C., population 14,000, voted to sell a city-owned building for $1 to a startup brewing co-op. In tiny Perry, N.Y., population 4,000, a public development corporation matched bank financing this year to help a microbrewery build in its downtown.
. . .
But here’s the rub: Demand for beer overall has been sliding in the U.S. for years. Twenty years ago, nearly three-quarters of young people said it was their favorite alcoholic drink, according to surveys by Gallup and Goldman Sachs Investor Research. Less than half feel that way now. The market is shrinking, and craft beer has grown at the expense of national brands like Budweiser, Miller and Coors.

For the full commentary, see:
JEREMY BAGOTT. “What Craft Brewers Want to Tap Next: the Taxpayer; Trendy suds are seen as a way to save city centers, never mind that beer sales have been sliding for years.” The Wall Street Journal (Sat., Dec. 31, 2016): A9.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Dec. 30, 2016.)

When Winston Churchill Met Mark Twain

(p. C13) . . . [a] pleasant immersion in America’s political history is Mark Zwonitzer’s “The Statesman and the Storyteller: John Hay, Mark Twain, and the Rise of American Imperialism.” It is a story of a friendship that flourished in spite of differences about momentous issues of war, peace and national identity. All of Mr. Zwonitzer’s pages are informative and entertaining, but none are more so than those recounting the meeting between the 65-year-old Twain and a 26-year-old British parliamentarian at the Waldorf-Astoria in Manhattan in 1900. Suffice it to say that Twain and Winston Churchill differed vigorously about the Boer War.

For Will’s full book recommendations, see:
George F. Will. “12 Months of Reading.” The Wall Street Journal (Sat., December 10, 2016): C13.
(Note: ellipsis, and bracketed word, added.)
(Note: the online version of the review has the date Dec. 7, 2016, and has the title “George F. Will on Stalin’s last spy.”)

The book recommended, is:
Tombs, Robert. The English and Their History. New York: Alfred A. Knopf, 2014.

Deer Dies from Stress Caused by Bickering Governments

(p. A1) A white-tailed deer that went from being a minor celebrity in Harlem to a cause célèbre after its capture, died in captivity on Friday [December 16, 2016], moments before it was to be driven upstate and released.
The preliminary causes of death, according to a New York City parks spokesman, were stress and the day and a half that the deer spent at a city animal shelter in East Harlem. But that did not begin to tell the absurd tale of how the buck, known as J.R., for Jackie Robinson, and Lefty, because of his crumpled left antler, came to die.
The deer had become the latest and most unlikely casualty of the feud between Mayor Bill de Blasio and Gov. Andrew M. Cuomo, an animosity that has manifested itself mostly on big issues like education, safety at homeless shelters and funding mass transit.
But the tussle over the deer was extraordinary even by the standards set by Mr. Cuomo and Mr. de Blasio. All day Thursday and into Friday, the city and state issued competing and sometimes self-contradicting updates on the deer and what should be done with him.
The buck had spent two weeks attracting adoring, snack-proffering crowds at Jackie Robinson Park, where he often was seen near a chain-link fence across the street from a bodega. How he traveled to a park in the middle of a crowded Manhattan neighborhood remains unclear.
. . .
After it looked like the deer might live, allies of the mayor and governor took the opportunity to throw a few jabs.
“Bureaucracy lost,” Richard Azzopardi, a spokesman for the governor, wrote on Twitter.
“Andrew Cuomo is an idiot,” posted Bill Hyers, who managed Mr. de Blasio’s 2013 mayoral campaign.
. . .
. . . the Harlem deer was no ordinary deer. He was beloved, a holiday-season gift to a beleaguered city, a surrogate reindeer camped out just a block from St. Nicholas Avenue.
. . .
The deer was condemned to die, then he was not, then he was, then he was not.
For a few surreal minutes Thursday night, the deer, like Schrödinger’s cat, was both alive and dead, with a city official insisting he had already been euthanized and the state insisting he had not.
Then, just before 2 p.m. with workers from the state Department of Environmental Conservation and the federal Department of Agriculture gathering at the Animal Care Centers of NYC shelter on East 110th Street, a city parks spokesman announced that the deer had died.
The spokesman, Sam Biederman, blamed the state.
“Unfortunately because of the time we had to wait for D.E.C. to come and transport the deer, the deer has perished,” he told reporters, adding that the city had wanted to euthanize the deer all along. “This was an animal that was under a great deal of stress for the past 24 hours and had been tranquilized for much of that time.”
The state, naturally, blamed the delay on the city.

For the full story, see:
ANDY NEWMAN. “Condemned, Reprieved, Then a Sudden Ending.” The New York Times (Sat., DEC. 17, 2016): A1 & A18.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date DEC. 16, 2016, and has the title “Harlem Deer Caught in City-State Tussle Has Died.”)

Government Permission to Build Takes Longer than It Takes to Build

(p. A21) America used to be the envy of the world in building great projects responsibly, efficiently and on time. The Pentagon was built in 16 months. The 1,500-mile Alaska-Canadian Highway, which passes through some of the world’s most rugged terrain, took about eight months. Today, infrastructure projects across America often require several years simply to get through the federal government’s pre-build permitting process. Consider a few examples.
New U.S. highway construction projects usually take between nine and 19 years from initial planning and permitting to completion of construction, according to a 2002 Government Accountability Office study. It will have taken 14 years to permit an expansion of Gross Reservoir in Colorado, and it took almost 20 years to permit the Kensington gold mine in Alaska.
It took four years to construct a new runway at Seattle-Tacoma International Airport, but it took 15 years to get the permits. Todd Hauptli of the American Association of Airport Executives bitterly joked to the Senate Commerce Committee last year, “It took longer to build that runway than the Great Pyramids of Egypt.”
These problems have been building for decades as the U.S. regulatory state has grown.

For the full commentary, see:
DAN SULLIVAN. “How to Put Building Permits on a Fast Track; It can take 15 years to win approval for a new airport runway. No wonder U.S. infrastructure needs a lift.” The Wall Street Journal (Mon., Dec. 5, 2016): A21.
(Note: the online version of the commentary has the date Dec. 4, 2016.)

$19 Billion in Farm Subsidies Mostly Go to Big Farms

(p. A17) President-elect Donald Trump’s vow to “drain the swamp” in Washington could begin with the Agriculture Department. Federal aid to farmers is forecast by the Congressional Budget Office to soar to $19 billion in 2017. Farmers will receive twice as much of their income from handouts (25%) this year as they did in 2013, according to the USDA. Whoever Mr. Trump names as his agriculture secretary should target wasteful farm programs for spending cuts.
. . .
While generous government subsidies are defended by invoking the “family farmer,” big farmers snare the vast majority of federal handouts. According to a report released this year by the Environmental Working Group, a Washington-based nonprofit research organization, “the top 1 percent of farm subsidy recipients received 26 percent of subsidy payments between 1995 and 2014.” The group’s analysis of government farm-subsidy data also found that the “top 20 percent of subsidy recipients received 91 percent of all subsidy payments.” Fifty members of the Forbes 400 list of wealthiest Americans have received farm subsidies, according to the group, including David Rockefeller Sr. and Charles Schwab.

For the full commentary, see:
JAMES BOVARD. “Living Off the Fat of Washington; If Trump is going to ‘drain the swamp,’ he might start with wasteful ag subsidies.” The Wall Street Journal (Mon., Dec. 12, 2016): A17.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date Dec. 11, 2016.)

Unbinding Entrepreneurs Can Create Jobs and Speed Growth

(p. A21) This week more than 160 countries are celebrating Global Entrepreneurship Week. The Kauffman Foundation, which I once led, created this event eight years ago to encourage other nations to follow the American tradition of bottom-up economic success. Yet this example has been less powerful in recent years, as American entrepreneurship has waned. Fortunately, President-elect Donald Trump has plenty of options if he wants to resurrect America’s startup economy.
Consider the economic situation that the president-elect is inheriting. Despite the addition of 161,000 jobs in October, the labor-force participation rate fell to its second lowest level in nearly 40 years, according to the St. Louis Federal Reserve. More people have joined the ranks of the chronically unemployed, slipping into poverty at alarming rates as their skills decay and dependency on public assistance grows. Considering population growth, America needs at least 325,000 new jobs every month to stanch the growing numbers of discouraged workers, according to the Bureau of Labor Statistics.
Merely bringing back factories from overseas will not solve this problem. Technology has made every factory more productive. Fewer workers make more goods no matter where they’re located. At the same time, fewer U.S. businesses are being started. New firms are the country’s principal generator of new jobs. Data from the Kauffman Foundation suggest companies less than five years old create more than 80% of new jobs every year. While the nation seems more enthusiastic than ever about the promise of entrepreneurship, fewer than 500,000 new businesses were started in 2015. That is a disastrous 30% decline from 2008.
. . .
What can President Trump do to encourage more entrepreneurship?
. . .
Government must . . . widen the scope of innovation by stepping back and letting the market find the future. By promoting trendy ideas and subsidizing politically favored companies, government dampens diversity in creative business ideas.
. . .
Mr. Trump can also reverse regulatory sprawl and cut government-imposed requirements that add to every entrepreneurs’ costs and risks. Anti-growth policies like ObamaCare and minimum-wage increases make hiring workers prohibitively expensive.
. . .
With these policies in mind, President Trump should set another goal: that his administration will create an environment that enables one million Americans to start companies every year. Such an outcome would assure his target of 4% GDP growth, as well as full employment.

For the full commentary, see:
CARL J. SCHRAMM. “The Entrepreneurial Way to 4% Growth; Trump should set a goal: fix the business climate so a million Americans a year can start companies.” The Wall Street Journal (Weds., Nov. 16, 2016): A21.

Jane Jacobs Studied the “Mess of Everyday Life”

(p. C6) The decidedly unpredictable and unscientific mess of everyday life was the passion of the urban theorist Jane Jacobs. For her, studying the street and the city was the key to understanding how things work. Robert Kanigel’s “Eyes on the Street: The Life of Jane Jacobs” has taken a place on my bookshelf right next to Robert Caro’s landmark biography of her nemesis, Robert Moses.

For Bierut’s full book recommendations, see:
Michael Bierut. “12 Months of Reading.” The Wall Street Journal (Sat., December 10, 2016): C6.
(Note: the online version of the review has the date Dec. 7, 2016, and has the title “Michael Bierut on Jane Jacobs.”)

The book recommended, is:
Kanigel, Robert. Eyes on the Street: The Life of Jane Jacobs. New York: Alfred A. Knopf, 2016.