Public Choice – Page 34 – artdiamondblog.com

In Greece’s Bloated Bureaucracy “It’s All about Who You Know”

“Police officers, firefighters and coast guard officers protested austerity measures in Athens on Monday.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A5) ATHENS — Stories of eye-popping waste and abuse of power among Greece’s bureaucrats are legion, including officials who hire their wives, and managers who submit $38,000 bills for office curtains.

The work force in Greece’s Parliament is so bloated, according to a local press investigation, that some employees do not even bother to come to work because there are not enough places for all of them to sit.
. . .
Some experts believe that Greece could reap significant savings by reducing its bureaucracy, which employs one out of five workers in the country and by some estimates could be trimmed by as much as a third without materially affecting services. But though salaries have been cut, the government has yet to lay off anyone.
The main reason is also one of the very reasons that Greece got into trouble in the first place: The government is in many ways an army of patronage appointments built up over decades. When election time rolls around, state workers become campaign workers, and their reach is enormous. There are so many of them that almost every family has one.
. . .
Whether the right workers will be laid off remains an open question. “A lot of people in the government are terrified,” Mr. Hlepas said. “They don’t think any of those people over in Parliament are going to go. They think the ones that do the work will get cut.”
Thomas Tsamatsoulis, 41, who works for the Greek equivalent of the Federal Aviation Administration, said he found himself on an early list headed for the reserve pool, though he had been sent to the United States for electronics training and now has a skill that is rare in his agency. At the same time, Mr. Tsamatsoulis said, the agency, which has just two airplanes, has more than 15 pilots.
“You want to believe the government will do this right,” he said. “But it is very difficult. It’s not how it has worked in the past. It’s all about who you know.”
Greece’s bureaucracy has been growing steadily since democracy was reinstated in 1974, with each new administration adding its supporters to the payroll — and wages rising steeply in the past decade, experts say.
“There was really a party going on,” said Yannis Stournaras, an economist and the director of the Foundation for Economic and Industrial Research in Athens. “The government kept adding bonuses and benefits and pensions. At election time there was a boom cycle as they handed out jobs.”
“Now they need to cut,” he added. “But they have already lost precious time.”
Stories of excesses abound. Mr. Papandreou told Parliament that one of his ministers found a predecessor’s $38,000 bill for curtains when the Socialists returned to power in 2009. Mr. Mossialos said he found that his own ministry, for media and communication, was spending $750,000 a year for office space for just 11 people.
But some experts question whether the culture of bloat and favoritism will ever be conquered.

For the full story, see:
SUZANNE DALEY. “Bureaucracy in Greece Defies Efforts to Cut It.” The Wall Street Journal (Tues., October 18, 2011): A2.
(Note: ellipses added.)
(Note: the online version of the article is dated October 17, 2011.)

The Lancet Accused Snow of Being “in the Pocket of Business Interests”

(p. 365) It is hard now to appreciate just how radical and unwelcome Snow’s views were. Many authorities actively detested him for them. The Lancet concluded that he was in the pocket of business interests which wished to continue to fill the air with ‘pestilent vapours, miasms and loathsome abominations of every kind’ and make themselves rich by poisoning their neighbours. ‘After careful enquiry,’ the parliamentary inquiry concluded, ‘we see no reason to adopt this belief.’

Source:
Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.
(Note: italics in original.)

Solyndra Debacle Illustrates Why Feds Should Not Pick Tech Winners

The Daily Show with Jon Stewart
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The clip above is embedded from the Jon Stewart “The Daily Show” episode that was aired on Thurs., September 15, 2011.

Government “industrial policy” is likely to fail for many reasons. One is that the government decision makers are unlikely to know which future technologies will turn out to be the best ones. Another reason is that even if they know, government decision makers often decide based on what is politically expedient or what is beneficial to their friends.

Solyndra is a case in point, as Jon Stewart hilariously reveals.

Navigation Acts, Were “Insanely Inefficient, but Gratifyingly Lucrative to British Merchants and Manufacturers”

(p. 297) Many of Monticello’s quirks spring from the limitations of Jefferson’s workmen. He had to stick to a simple Doric style for the exterior columns because he could find no one with the skills to handle anything more complex. But the greatest problem of all, in terms of both expense and frustration, was a lack of home-grown materials. It is worth taking a minute to consider what the American colonists were up against in trying to build a civilization in a land without infrastructure.
(p. 298) Britain’s philosophy of empire was that America should provide it with raw materials at a fair price and take finished products in return. The system was enshrined in a series of laws known as the Navigation Acts, which stipulated that any product bound for the New World had either to originate in Britain or pass through it on the way there, even if it had been created in, say, the West Indies, and ended up making a pointless double crossing of the Atlantic. The arrangement was insanely inefficient, but gratifyingly lucrative to British merchants and manufacturers, who essentially had a fast-growing continent at their commercial mercy. By the eve of the revolution America effectively was Britain’s export market. It took 80 per cent of British linen exports, 76 per cent of exported nails, 60 per cent of wrought iron and nearly half of all the glass sold abroad. In bulk terms, America annually imported 30,000 pounds of silk, 11,000 pounds of salt and over 130,000 beaver hats, among much else. Many of these things – not least the beaver hats – were made from materials that originated in America in the first place and could easily have been manufactured in American factories – a point that did not escape the Americans.

Source:
Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

Political Ideology Matters in Hiring and Tenure

Source of book image:
http://images.borders.com.au/images/bau/97816025/9781602582682/0/0/plain/compromising-scholarship-religious-and-political-bias-in-american-higher-education.jpg

(p. 34) . . . when a faculty committee is looking to hire or award tenure, political ideology seems to make a difference, according to a “collegiality survey” conducted by George Yancey.

Dr. Yancey, a professor of sociology at the University of North Texas, asked more than 400 sociologists which nonacademic factors might influence their willingness to vote for hiring a new colleague. You might expect professors to at least claim to be immune to bias in academic hiring decisions.
But as Dr. Yancey reports in his new book, “Compromising Scholarship: Religious and Political Bias in American Higher Education,” more than a quarter of the sociologists said they would be swayed favorably toward a Democrat or an A.C.L.U. member and unfavorably toward a Republican. About 40 percent said they would be less inclined to vote for hiring someone who belonged to the National Rifle Association or who was an evangelical. Similar results were obtained in a subsequent survey of professors in other social sciences and the humanities.

For the full commentary, see:
LAURA PAPPANO. “The Master’s as the New Bachelor’s.” The New York Times, EducationLife Section (Sun., July 24, 2011): 34.
(Note: ellipsis added.)
(Note: the online version of the commentary is dated July 22, 2011.)

Book mentioned:
Yancey, George. Compromising Scholarship; Religious and Political Bias in American Higher Education. Waco, TX: Baylor University Press, 2011.

Bricks-and-Mortar Restaurants Use Police (Instead of Better Food) to Beat Food Trucks

“Kim Ima and Kenny Lao parked their food trucks on Front Street in Dumbo.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. D4) FOOD trucks, those rolling symbols of New York City’s infatuation with haute casual food, are suddenly being chased from Midtown Manhattan. In the last 10 days, the Treats Truck, which has sold cookies and brownies for four years during lunchtime at West 45th Street near Avenue of the Americas, has been told by police officers that it is no longer welcome there, nor at its late-afternoon 38th Street and Fifth Avenue location. The Rickshaw Dumpling truck, a presence for three years at West 45th Street near the Treats Truck, has been shooed away as well.

The police “have told us they no longer want food trucks in Midtown,” said Kim Ima, the owner of the Treats Truck, a pioneer of the city’s new-wave food-truck movement, who began cultivating customers on West 45th Street in 2007.
. . .
Mr. Lao and other food-truck operators said they suspect that the police are responding to complaints by brick-and-mortar businesses that resent competition. Such was the case last year, when store merchants on the Upper East Side complained about Patty’s Taco Truck, which sold tortas, tacos de lengua and cemitas on Lexington Avenue. The truck was towed several times and the operator arrested, prompting the Street Vendor Project, an advocate for vendors based at the Urban Justice Center, to file the lawsuit that resulted in Judge Wright’s ruling, which said food is merchandise that can be regulated.

For the full story, see:
GLENN COLLINS. “Food Trucks Shooed From Midtown.” The New York Times (Weds., June 29, 2011): D4.
(Note: ellipsis added.)
(Note: the online version of the story is dated June 28, 2011.)

Government Administrators Steal Money, Food and Benefits from Poor in India

(p. A8) NEW DELHI — India spends more on programs for the poor than most developing countries, but it has failed to eradicate poverty because of widespread corruption and faulty government administration, the World Bank said Wednesday.
. . .
One of the primary problems, the World Bank said, was “leakages” — an often-used term in development circles that refers to government administrators and middle men stealing money, food and benefits. The bank said that 59 percent of the grain allotted for public distribution to the poor does not reach those households.

For the full story, see:
“India’s Anti-Poverty Programs Are Big but Troubled.” The New York Times (Thurs., May 19, 2011): A8.
(Note: ellipsis added.)
(Note: the online version of the story is dated May 18, 2011, has the title “India’s Anti-Poverty Programs Are Big but Troubled,” is attributed to Heather Timmons, and is considerably more detailed than the published version.)

Georgia Taxpayers Pay for “Go Fish” Museum in Former Governor’s Home Town

“A largemouth bass dominates the hatchery display at Go Fish Georgia Educational Center, a museum financed partly by the state and approved when the economy was more robust.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A14) PERRY, Ga. — Every weekend, Michael Morris and his 2-year-old son, Jacob, visit this small town’s enormous new $14 million fishing museum. They watch bream and bass swim in aquarium-size tanks. They play with an interactive model of a fishing boat and try to catch fish on a computer simulation using a rod and reel connected to a video screen.

And because the museum, the Go Fish Georgia Educational Center, is primarily financed by the state, their father-and-son outings cost only $5.
. . .
But not all Georgia taxpayers are so thrilled. Even before the museum opened in October, “Go Fish” had become shorthand in state political circles for wasteful spending. Republicans and Democrats alike groaned over $1.6 million a year in bond payments and operating costs. And even supporters concede that the museum would never have gotten financed in 2007 if the legislature knew where the economy was headed.
. . .
And then there is the controversy over the museum’s location — in the home county of its main supporter, former Gov. Sonny Perdue, a Republican who left office this month after two terms.

For the full story, see:
ROBBIE BROWN. “New Fishing Museum Becomes Symbol of Waste in Georgia.” The New York Times (Tues., January 18, 2011): A14.
(Note: ellipses added.)
(Note: the online version of the article is dated January 17, 2011 and has the title “Fishing Museum Is Symbol of Waste in Georgia.”)

To Do Business in India, Bureaucrats Still Must Be Bribed

“In the twilight of his career heading Tata Group, Ratan Tata says he was thwarted in his homeland by arbitrary regulatory decisions and corruption.”

(p. B1) NEW DELHI–Ratan Tata has transformed Tata Group into the world’s best-known Indian company, the owner of Jaguar cars, the Pierre Hotel in New York and Tetley tea.

But in the twilight of his career as chairman of the $67.4 billion conglomerate, Mr. Tata, 73 years old, is frustrated that he hasn’t been able to expand more in his native India. He says bureaucratic delays, arbitrary regulatory decisions and widespread corruption have thwarted his domestic ambitions in such sectors as steel, power, aviation and telecommunications.
. . .
. . . 20 years after . . . reforms began, New Delhi still exerts tight control over large swaths of the economy. All too often, Mr. Tata and other critics say, regulators are picking winners and losers through their decisions, either by delaying certain projects and green-lighting others or by freeing up natural resources for some companies at the expense of others.
“Economically it is a much more open environment. It’s one that fosters a fair amount of free enterprise until you need approvals or some kind of sanction to get something done,” Mr. Tata said during an interview at the Tata-owned Taj Mahal hotel in New Delhi. “Then you still have problems, and maybe more acute then you did before.”
. . .
As chairman, one of Mr. Tata’s first goals was to get Tata back into the airline business. The company’s former airline had been nationalized to form Air India. He planned a venture with Singapore Airlines. But, he says, aviation ministry bureaucrats held up his application for years despite his constant prodding. An aviation ministry spokeswoman didn’t respond to a request for comment.
In 1998, after seven years of government inaction, Mr. Tata withdrew the application. “We went through three governments, three prime ministers, and each time there was a particular individual that thwarted our efforts,” he said in a TV interview last fall. He recalled a conversation with a fellow industrialist several years ago. “He said, ‘I don’t understand. You people are very stupid…. Why don’t you just pay?'”
Paying bribes isn’t his style, Mr. Tata says. “Maybe I’m stupid or old fashioned, but I really want to go to bed at night saying I haven’t succumbed to this.”

For the full story, see:
AMOL SHARMA. “India’s Tata Finds Home Hostile; Chair of Nation’s Best-Known Company Says Bureaucracy Slows Domestic Growth.” The Wall Street Journal (Weds., April 13, 2011): B1-B2.
(Note: ellipses added, except for the one after the word “stupid” which appears in the original.)
(Note: in the online version of the article, the final paragraph quoted above reads: “Mr. Tata says paying bribes isn’t his style. “Maybe I’m stupid or old fashioned, but I really want to go to bed at night saying I haven’t succumbed to this,” he says.”

Father of Cornhusker Kickback Is Named “2010 Porker of the Year”

(p. 6A) Sen. Ben Nelson can’t shake the “Cornhusker Kickback.”
This week, a government watchdog group named the Nebraska Democrat its “2010 Porker of the Year,” based on an online poll.
Citizens Against Government Waste included Nelson in the poll, citing his role negotiating a provision of the federal health care bill that would have exempted Nebraska from paying the added costs of the law’s expanded Medicaid coverage. That provision was later dropped in favor of relief for all states, which Nelson has said was his goal all along.
Nelson cast the decisive 60th vote for the bill in late 2009.
. . .
Mark Fahleson, chairman of the Nebraska Republican Party, said Nelson was trying to rewrite history. “The fact is he’s the father of the Cornhusker Kickback,” he said.

For the full story, see:
MICHAEL O’CONNOR. “Nelson rejects group’s ‘Porker of Year’ label.” Omaha World-Herald (Fri., March 4, 2011): 6A.
(Note: ellipsis added.)

How Bacardi Fought Predatory Taxation in Pre-Castro Cuba

Source of book image: http://www.nytimes.com/2008/09/21/business/21shelf.html?_r=1

(p. W6) When it comes to chronicling the Bacardi rum dynasty, the best model may be “Buddenbrooks” or some other novelistic attempt to capture the experience of a family business trying to survive across generations. Tom Gjelten’s “Bacardi and the Long Fight for Cuba” — though fact-driven history and far more upbeat that Thomas Mann’s tale of dynastic decline — feels very much in this literary tradition.
. . .
Perhaps the most fascinating figure in the Bacardi tale is José Bosch, called Pepín, a young businessman who also married into the Bacardi family and was an early opponent of Gerardo Machado’s corrupt rule in the 1920s. Machado made Bacardi, one of Cuba’s most successful companies, a target of predatory taxation, but a proposed rum tax was more than the distiller could stand. Bacardi opened new facilities in Mexico and threatened to move its operations there if the tax was enacted. The Cuban legislature dropped the idea — and Bacardi soon found itself with a Mexican distillery it didn’t need, trying to sell a liquor to tequila- quaffing public that didn’t want it.
Bosch was dispatched in 1933 to shut down the Mexican facility, but instead he saved it. “Noticing that Mexicans drank a lot of Coca-Cola,” Mr. Gjelten writes, Bosch urged the company to promote Bacardi-and-Coke cocktails. Observing the rich tradition of Mexican handicrafts, he also suggested that the locals would be more inclined to drink rum if it was sold in the sort of wicker-covered jugs often used for it in Cuba. Sales in 1934 doubled.

For the full review, see:
ALVARO VARGAS LLOSA. “The Family Spirit.” The Wall Street Journal (Fri., September 12, 2008): W6.
(Note: ellipsis added.)

The book being reviewed, is:
Gjelten, Tom. Bacardi and the Long Fight for Cuba: The Biography of a Cause. New York: Viking Penguin, 2008.