Congressional Inefficiency

The federal government is set to spend over $300 billion on programs with expired authorizations, meaning the programs have not undergone extensive analysis to determine their efficiency. The process to fund programs through committees is extremely complicated. Madeline Karon describes this arduous process in her article and mentions the time consuming nature of the committee system in Congress. She argues that the committee system is inefficient and does not positively contribute to Congress. Karon believes the committee system should be removed as it negatively affects the outcome of Congress.

Weingast and Marshall analyze the role of Congressional committees in their paper, “The Industrial Organization of Congress”. They argue that legislative institutions are organized in committees similar to market firms. The committee system of Congress as an enforcement mechanism is essential to ensure success. This contrasts with Karon’s argument as the Congressional committee system is actually a positive contribution. Weingast and Marshall propose that the committees, as groups, operate in order to monitor congress, distribute information, and mobilize support. Congressmen and women have comparative advantages when acting in Congress, which supports the theory of committees. Weingast and Marshall disprove Karon’s argument and show the essentiality of committees in Congress.

The Aging Committee

The Aging Committee in the Senate consists of twenty members- the majority leader is Senator Susan Collins from Maine and the minority leader is Senator Bill Nelson from Florida. It is no surprise that the two chairmen of the committee are from Florida and Maine. This is because Florida and Maine rank #1 and #2 respectively with the highest percentage of populations over 65 years old, according to World Atlas. The committee at large represents over half of the top 25 states with populations over 65. According to Weingast and Marshall, this representation is to be expected. The senators on the aging committee fight in the interest of pro-senior legislation, and being on this committee helps them represent almost a fifth of their possible voting populace.

Three days ago, Pennsylvania Senator Bob Casey was appointed the ranking member on the committee (also unsurprising as PA also ranks within the top ten oldest US state populations). Prior to the appointment, he worked on a subcommittee of the aging committee titled the "Special Committee on Aging", in which he did research into policy changes affecting "long-term care, elder fraud and abuse, [and] prescription drugs" which affect the lives of the elderly (Aging Edge). Having been on the committee since the start of his position, it is plausible to argue he is working his way to a significant position of power, such as chairman, with due time.

Between June and September of 2016, the Committee has unveiled 18 press releases on their website. Of these, 14 out of the 18 releases have been a joint release by the committee. The other four are Republican (since they hold the majority). According to Weingast and Marshall and the venn diagram discussed in class, the releases they pass and legislation and hearings they hold must be moderate enough to be palatable to the majority of the committee and the full Senate. Thus, it is intuitive that the output of the committee are a bipartisan result, rather than predominantly one-sided policies.

Niskanen and Corruption

In addition to the general bureaucratic benefits, bureaucrats in corrupt nations stand to benefit from their extortion. The size of the budget is positively correlated with the amount of that budget that they can extort. This can lead to corrupt bureaucrats having quite strong reactions in response to budgetary changes, as they did when India expanded its budget for the National Rural Employment Guarantee Scheme.  As a paper by Niehaus and Sukhtankar (of UVa!) describes, with the budgetary increase, the availability of future rent from corrupt activities increased, so bureaucrats’ jobs now became more valuable. Thus bureaucrats became more concerned with retaining those jobs. They valued their jobs so much that bureaucrats with a more varied pay structure actually reduced their theft, so that they could limit the probability of their termination. On one hand, this supports the Niskanen model since it demonstrates that bureaucrats aim to maximize their budget. However, it’s less clear how this relates to or supports Nisaken’s emphasis on the senior bureaucrat, since it was the local bureaucrats that stood to gain in India. And even though these local bureaucrats gained from the budgetary increase, how much power did they actually exert to make it happen?

It also opens the question: What happens when a project’s budget doesn’t correspond to that project’s output? The Niskanen model demonstrates that bureaus aim to overproduce, but it hasn’t so far explained the gap between budget and output. Though these gaps and inefficiencies exist in all nations, they are particularly egregious in corrupt nations, where corruption can result in astoundingly high leakage rates. In Uganda, an educational block grant was estimated to have a leakage rate of 87%, meaning that only 13% of the budget actually went to fulfilling the project’s aim. 

Airlines Flying High with Government Subsidies

  George Stigler wrote about groups, regulation and the use of the state. He determined that there are four types of public policies and uses of the state that industries seek. One type is that which deals with substitutes and complements. In his paper, Stigler mentions an example that “the airline industry actively supports the federal subsidies to airports,” and I have decided to do some research on what he is talking about.

   In 1978, the “Essential Air Service (EAS) program was put into place to guarantee that small communities that were served by certificated air carriers before airline deregulation maintain a minimal level of scheduled air service,” which involves subsidizing some flights and air carriers through its support of small airports. This program was supposed to last only a few years to give the airline industry a boost, but is still going strong in 2016. Some are calling for an end to in light of the current budget deficit but others like Rural Air Service Alliance Inc, a small lobby advocating for rural airports is hoping that it will stay in effect. Those that are fighting for the program's end, feel as though the government is paying for empty seats, citing several occasions where there has only been one or two passengers on an entire flight and focus some of their research on an airport in Alamosa, Colorado. The airport in Alamosa received 1.85 million dollars from the government in 2010 and in 2011 had a low load factor for flights of 29.1 to 53.85. The load factor  being "miles a passenger has been in a seat in proportion to the miles the seat was empty." The Rural Air Service Alliance Inc, coupled with support from Boutique Air, the airline who flies out of Alamosa, however is fighting back. With their help, the airport has continued to receive federal money and has seen its subsidy increase to 2.6 million, arguing that this money is necessary to stimulate and maintain economic growth in the area. Initially the Department of Transportation put a pause on this year's funds as they exceeded a cap of $200 per passenger but a week ago the hold on the funds was lifted and the airports received the money, as many local officials in Alamosa, including the state congressional delegation and governor voiced their support of the subsidy citing growth and touting Boutique Air's commendable record. The example in Alamosa shows how the airline industry is interested in supporting federal subsidies to airports because they receive the benefit as well, thus proving Stigler's third type of public policies sought by industries. 

Trump and Lobbyists: Is Stigler Correct?

In this episode of 60 Minutes, Donald Trump, President Elect is interviewed one on one and asked multiple probing questions. Right at the outset, Trump is asked about the fact that during his campaign he has condemned career politicians because they were 'owned' by lobbyists and big donors, yet he is now appointing and working with those lobbyists himself. This is exactly the sort of action that Stigler points out as well: politics are largely influenced by firms that own politicians and are seeking regulation in their self interests. The irony is that, although Trump has constantly trashed politicians that are influenced by lobbyists, he is now relying on these same lobbyists himself to help run the government until he can "get rid of them." According to Trump, they are the ones that know the government inside and out and he is forced to work with them as they are more adept at political maneuvering than he is.

Interestingly, Trump's claims that he will not be beholden to lobbyists and large firms seems to be folding in on itself the way Stigler would predict. He may not need their dollars, but he does need their votes, and because of this he will be beholden to them just the same. Stigler claims that government has become captured by industry to do their bidding, and Trump agreed with this throughout his campaign. It will remain to be seen whether or not he will be able to follow through on his promises to be different or if he will become captured by industry as well...

Uber vs. Taxis in NYC's L Train Crisis

This summer New York City confirmed plans for repairs on its L Train, which runs between Manhattan and Brooklyn, that will require the train to be shut down for a year and a half starting in 2019. New Yorkers are prediciting an "L Train Apocalypse" given that line currently serves heavily populated Brooklyn neighborhoods and will drastically increase the commute times of Brooklynites working on the other side of the river in Manhattan.

Uber and the city's many taxi services now find themselves in a race to replace the L Train, seeing potential for a massive revenue boost as many commuters in wealthy neighborhoods like Williamsburg seek to minimize their transportation time. Uber has announced plans for a new feature called Commuting Together, designed to match riders with other commuters who are already driving in the same direction, allowing many car owners to make money for a drive they would be making anyway. Uber hopes to get Brooklyn residents to work in the 18 months that they are without the L Train while also decreasing rush hour traffic on the already-congested Williamsburg bridge.

New York taxi services, however, are lobbying for industry regulation to limit Uber's growing foothold in the city. "Uber's absurd proposal is a street safety hazard waiting to happen," said David Baer, president of the Committee for Taxi Safety, a lobbying group supporting the taxi industry. Baer also cited Vision Zero, a traffic safety program adopted by NYC mayor Bill de Blasio in 2014 to decrease risk for pedestrians, as a policy infringed upon by Uber's innovations. As the above cited Newsweek article points out, the proposed regulations would require Uber carpoolers to "first spend three months getting a license from the Taxi & Limousine Commission, get special license plates for their vehicle, spend thousands of dollars on special commercial insurance, and take over 40 hours of training classes." The taxi industry's lobbying for regulation is a case of rent-seeking. As Stigler points out, lobbyists often point to public interest claims (Uber puts our pedestrians at risk) as justification for industry regulations. While driver and pedestrian safety are of high importance, the taxi industry is seeking extreme regulation to prevent Uber from dominating in the chaos that results from the L Train closure.

Rational Abstention hurts Clinton

The results of the presidential election were on all accounts, shocking. Many of us, including myself, thought the race would not even be close. Leading up to the election, many polls such as FiveThirtyEight or the New York Times had Hillary's chances of winning the election between 70 and 90 percent. But to their dismay, Trump won the election and decisively at that. So what happened?

I would like to postulate that the polls who had Hillary winning the election so convincingly, actually contributed to her eventual loss. In the months leading up to the election, when undecided or relatively ambivalent voters saw that it was a forgone conclusion that Hillary would win, they became disinterested and complacent.

(1) If an individual voter concludes that the race is all but decided even before they vote, they are even further incentivized to abstain. Why should I take the time out of my day to go to the polls and vote if the outcome has already been decided? (2) Furthermore, the societal pressure applied by family members and friends is reduced when the election is expected to be a blowout. Conversely, in a tighter race there is more societal pressure applied to undecided voters and undecided voters are more likely to perceive their vote as potentially decisive.

Effects (1) and (2) can be explained by the rational abstention equation outlined in Mueller chapter 14 and Johnson's paper Voting, Rational Abstention and Rational Ignorance. The readings state that voters must satisfy the equation (p)*B + D > C in order to vote. The two forces mentioned above decrease the left side of the equation. Effect (1) decreases (p) and effect (2) decreases D. By decreasing the left side of the equation voters are further incentivized to abstain.

Because of these two forces, on-the-fence voters had increased incentives to abstain from voting. In turn this caused noticeably lower voter turnout - 55% ( the lowest in 20 years). In the end, those who abstained were in large part moderate voters who Hillary was counting on to win this election.

Rationally Ignorant about the Board of Visitors

The Board of Visitors at the University of Virginia plays a very influential and powerful role. According to UVA's site:  "The Board approves the policies and budget for the University, and is entrusted with the preservation of the University's many traditions, including the Honor System." As the BoV is able to significantly shape students' experiences during their time at the University, I would expect students to be aware of the BoV's activities and the issues on which they vote. However, according to an article from The Cavalier Daily, "nearly 60 percent of students do not know enough about the Board of Visitors to form an opinion about them". This is an example of rational ignorance. Learning about the Board of Visitors takes time, and it is evident that the marginal benefit would be less than its associated marginal cost, if students were to gain additional knowledge about the BoV.

The student member of the BoV is trying to lower the marginal cost of acquiring knowledge on the BoV by "actively working to make information about the Board more transparent and accessible to the student body,” However, perhaps the reason the majority of students are not knowledgeable about the BoV is not because the marginal cost is too high, but because the marginal benefit of acquiring knowledge about them is too low. In this case, these students don't perceive the activities of the BoV to significantly affect their lives. Assuming they are acting rationally in their best interest, there is not much we can do!

Jason Kander vs. the NRA

Although the 2016 presidential election captured most of the public's political attention this year, down-ballot races brought just as much intrigue.  In fact, some of the best political ads of the season stemmed from congressional races, including a bold ad from Jason Kander on the topic of gun background checks.  In the incredibly effective ad, Kander, a Democrat, goes far to prove to his audience that he cares about their Second Amendment rights--a stance many Democrats would be loath to so brazenly address.  

Why did Kander feel the need to come out strong in support of gun rights while balancing his desire for strong background checks?  Kander was running for Senate in Missouri, a deeply red state in which Second Amendment issues get attention.  Kander had previously received an "F" from the NRA on defending pro-gun legislation, and clearly felt compelled to address this low rating, implying the NRA's significant influence in Missouri.  This is a classic example of Weingast and Marshall's first assumption:  congressmen represent interest groups powerful in their districts, and if they fail to faithfully represent, the group will report this failure and mobilize against them.  In this case, the interest group--rather than the effective ad--won the day; Kander lost to his opponent on November 8, lending validity to W&M's first assumption. 

*As a sidenote, while Kander's ad was well done, I don't know if anybody can beat this ad from Gerald Dougherty.