Sackett V. EPA

In August Business Week (linked in title) reported on a couple (Mike and Chantell Sackett) that purchased a piece of property in 2005. The couple hoped to build their dream home on the plot, which was located in a Residentially zoned area and surrounded by other houses. Business Week reports that after the Sacketts had begun digging they were approached by the EPA and told that they had to immediately stop construction, there land was deemed to be a wetland and protected under the law; if this was not completed they were to rack up sum $32,000 per day construction continued. Two Federal Courts turned down the Sakketts because the EPA had not asked to enforce the fine and no ruling could be made. However, the Supreme Court agreed to hear their case. Other background info is available in the article.

When I read this article I thought WWRCD? (What would Ronald Coase do?).

The article struck a nerve for me. It turned farmers and shepherds into real people and the government. Essentially, the government is using its monopoly on force to give itself the property rights to, and therefore rights to potential damages on, the "wetland" around and on the Sacketts' plot. There are two things that stick out in this assertion. (1) Its use of monopoly power and (2) property rights and solutions. I focus first, and mainly, on this second point.

Lets think for a moment what would happen if the EPA were not a government agency but a private business ( EPA Inc.) and EPA Inc. owned the surrounding land. According to Coase, the Sacketts would be allowed to build on their property but EPA Inc. would have their own tool bag full of property rights. WWRCD? It would seem that the Sacketts would be liable for damages on EPA Inc.’s property. Upon showing the degree and nature of the damages that ‘spill over’ from the Sackett residence to EPA Inc.’s property an internal equilibrium could be found. The Sackett’s could agree to implement the proper cleansing procedures to ensure that no damage leaves the property, or agree to pay EPA Inc. the necessary amount to proceed with cleaning. The Public Good that is the wetland, owned by EPA Inc. would not be harmed under such an agreement and the Sacketts would be able to build their dream home. In essence, the two parties would internalize the externality. Well-defined property rights see the day done and a positive sum game is established. The Sacketts live in their home (+), and the wetlands remain undamaged(+) (assumed there are any damages).

However, what happens when the EPA (as we know it) attempts to define property in the way that it does: The Sacketts have rights to the physical plot, but the EPA controls the “public” aspect of the property i.e the wetlandness of the property. There now seem to be two possible outcomes. (1) The Supreme Court rules in favor of the EPA (government) and the Sacketts pay all the accrued fines, cannot build their home and face a potential criminal suit (---), but the wetland is saved (+)or (2) The Supreme Court Rules in favor of the Sacketts they build their home (+), but the wetlands are potentially damaged (-)(though I’m not convinced) by the residence. It seems to be a zero sum game either way, if not a negative one.

A question is how I will respond to the first point I wanted to address. Is the $32,000/day fine and criminal charges the result of equilibrium, or is the government able to gain economic rent by using its monopoly on force to increase the price?

What do you think (about everything especially the first point made)?

Also, as of yesterday, the Supreme Court opened the case to petitioners. LOOK!

Tax Increases and Median Voter Theory

This article refutes the argument that Obama’s new push to raise taxes on the rich only appeal to left wing Democrats and will alienate voters in the center. It states that, “while it’s true that Obama’s new posture is partly about firing up his base, he and his advisers also view it as the best way to win back moderates and independents.” According to the median voter theory that we discussed in class this makes sense; in a two party system politicians gravitate to towards the middle of the political spectrum to get the most votes. Obama, or any political candidate, will try to locate themselves as centrally as possible without alienating their voter base or causing indifference between the two parties. They therefore wouldn’t support measures that would dramatically shift them to one side of the spectrum

Considering that, according to the US Census, the real median household income in the United States in 2010 was $49,445, it seems unlikely that a policy taxing the rich (income of $250,000 or more) would alienate the median voter; they wouldn’t have to pay this tax. The polls (as shown in the article) show that moderates support tax increases. Looking at it form this perspective it seems weird that Republicans are so adamantly opposed to raising taxes for the rich; shouldn’t they be drifting towards the middle as well? Of course, in the real world things are more complicated: voters abstain and there are multiple dimensions. As the article suggest, Republicans can also use a slippery slope argument that Democrats are “tax-hikers;” the current tax would only increase taxes for the rich, but the next tax might affect the median voter as well. Maybe, the median voter opposes tax hikes from an ideological perspective or they expect to make over $250,000 in the future. Overall though, the argument that tax increases for the rich appeal to the median voter seems reasonable.

Environmental Externalities

Gernot Wagner's recent New York Times article addresses the problem of market externalities in relation to the global climate crisis. Carbon dioxide pollution is seriously damaging to "economies, ecosystems and health," but individuals are not made to pay the full costs of their own carbon emissions. As a result, we have ended up with what Wagner calls "planetary socialism": a classic case of negative externalities, in which society as a whole bears the costs of individual actions. In order to preserve our climate, we as a society must collectively reduce our emissions, but there are no incentives in place to force individuals to make these necessary cuts. In Wagner's view, the best way to solve this problem would be through a government-imposed limit on total carbon emissions (a "cap-and-trade" system).
The argument for government intervention runs counter to the ideas of the Coase Theorem. Coase argued that, given adequately defined property rights, the problem of externalities could be solved through the free market: negotiations between the producer of an externality and the affected party could lead to the 'internalization' of the externality (the individual costs of the action would adjust to reflect its social costs.) However, in this case, a Coasian solution might not be a viable option. Such a solution would face serious challenges, such as the "Assignment Problem" outlined by Gruber. For instance, we can't realistically assign property rights to the air we breathe. And it would be equally difficult to assign blame for environmental damage: if all of our emissions together are contributing to this damage, there is no easy way to determine the degree of blame to assign to each individual person. Government intervention is likely the best solution in this case.

Less Differentiation Between Communities, Less Migration

On his blog on the Washington Post website, Ezra Klein linked to a NBER paper that states that “By most measures, internal migration in the United States is at a 30-year low.” This is particularly relevant to discussion of mobility as a key assumption in the Tiebout model.

Klein’s article points out that the fall in migration is largely because of: “technological advances” that have reduced “the need for workers to move,” locations that are “less specialized and in what kind of goods and services they produce,” and changing social trends as less Americans are “moving for matrimony.”

Interestingly, the first of these reduces the cost of moving between communities. According to Tiebout, this should increase migration. However, the homogenization of locations has also reduced the benefits of moving. This should reduce migration. It is difficult to see exactly how the changing marriage trends should be interpreted in the Tiebout model. This then seems to demonstrate that even if close to perfect mobility is being achieved, migration may fall if communities cease to differentiate themselves from each other.

From Primaries to the General Election

In this article, the idea that Ron Paul's viewpoints to be more similar to those held by members of the Democratic Party is criticized. The arguments being made are interesting to think of when applied to the median voter theory.

During primaries, the ideological location of the median voter would be shifted. By arguing that Rep. Paul's ideology is closer to a Democrat's standpoint, his opponents are trying to move him further from the primary's median in the eyes of voters. What is almost ironic about this is that a similar shift would theoretically benefit Rep. Paul in a race against a Democrat (assuming a one-dimensional scale). In reality, since there is more than one scale in which candidates are compared, it is difficult to say whether this argument would hold weight in different dimensions (ie. in some areas Paul is closer to the median and in others he is farther away, but in different directions and dimensions than left and right).

Music and Positive Externalities

The EU has recently voted to extend copyright on sound recordings from 50-70 years, allowing the music industry to claim intellectual property rights, and therefore royalties, for longer. 

The record music industry has seen a very sharp decline in profits since the advent of the internet and file sharing, illegal downloading, etc. In the past there might have been some positive externalities in the record music industry (eg. CDs could be copied onto cassette disks and distributed), but its current scale is unprecedented.  The prices paid for music no longer come close to reflecting the Social Marginal Benefit as more and more people can enjoy music for free. The Coase Theorem states that the allocation inefficiencies that result from externalities can be eliminated when property rights are clearly defined. Critics of the new law say that it will not benefit the artists themselves but rather their record labels. However, who receives the property rights is irrelevant for efficiency reasons; as long as property rights are assigned, prices should increase towards the SMB.  Still, it remains doubtful if the increased copyright laws are going to truly reduce the industry’s positive production externality since it will only affect legally exchanged music, and not illegally downloaded music which seems to be the biggest culprit in creating this externality anyway.

The Republican Primary and the median voter

The current race for the Republican presidential nomination is a great example of how Anthony Downs’ median voter theory can dictate campaign strategy. The candidates have to balance the need to win the Republican nomination by exhibiting strong conservative views, especially with the rise of the Tea Party movement, and the need to lay down a solid track record that will appeal to the median voter in the general election.

The two attached links provide analysis of Ron Paul, Mitt Romney and Rick Perry's campaign thus far. According to Washington Post reporter/blogger, Chris Cillizza, Ron Paul has failed to abide by Downs' theory that candidates need to formulate policy to win elections, instead of winning elections to formulate policies. Ron Paul's view on the causes of the 9/11 attacks showed that he was unwilling to compromise his views to attract the most votes. This has helped keep Paul near the bottom in the polls. The Politico article and the NPR article discuss the front-runners Rick Perry and Mitt Romney respective campaign strategies. Rick Perry has come out with a strong conservative campaign that has helped vault him into the lead of the GOP nomination race, while Romney, according to the blogs, has remained less conservative than Perry and therefore more electable in the general election. These articles exhibit the interesting dynamic of trying to win the Republican nomination while also being attractive to the median voter in the general election.

The Washington Post - What We Learned

Politico - Survey Raises Electability Questions for Perry

NPR - Perry's Social Security Stance Raises Electability Questions

Thanks but no thanks!

In this article, it is quite surprising to read about how Michele Bachmann (R-Minn.), Rep. Steve King (R-Iowa), Lynn Westmoreland (R-Ga.) and Jim Jordan (R-Ohio) declined appropriations committee spots very recently. This is almost unheard of.

The appropriations committee is usually very coveted because, most usually, the focus is bringing earmarks back home. The job of the committee (especially for the conservatives) will be very different at this point, and for the foreseeable future: finding $100 billion in spending cuts. Even though the conservatives were voted into office (mainly) because of their firm stance on cutting spending, the committee members will be “accused of hating seniors, hating education, hating children, hating clean air and probably hating the military and farmers, too,” This creates interesting (and backwards) incentives. As the representatives that accept a position in the committee “will have to make some tough votes”. Taken to the extreme this could mean that the representatives that have a choice (the ones with enough seniority that is) will try as hard as they can to stay out of the appropriations committee, and that the ones that don’t have much of a choice (the freshman) might end up on that committee. And if cutting spending generates as much dislike as is claimed in the article, these representatives are almost guaranteed to be voted out of office in 2 years.

“The chairman needs to have some young stallions in there who are ready to back him or her up,” Kingston said. “And you’re going to do this in the face of Democrats and the press and the administration fighting you on it all the way.”

Bob Livingston, who chaired Appropriations from 1995 to 1999, however thinks that any representative can “make a darn good campaign out of going on the Appropriations Committee and cutting the budget. They can make a name for themselves by cutting spending.” And I wonder if the senior representatives that have been in the appropriations committee prior to the last midterm election wouldn’t be making a huge mistake by potentially loosing a lot of credibility.

How much of these spending cuts will actually happen? All the representatives, apart from the ones in the committee, will have huge incentives to vote for spending cuts, the ones in the committees have huge incentives to not cut spending. How will this work out? With so much incentives to not cut spending, what will happen?

Congressional Housing Lottery

Unlike while vying for committee placement, all new, incoming lawmakers have to enter a lottery to determine which remaining office they can occupy for the upcoming term. Yahoo Political News details the procedure of occupying newly emptied legislator offices and unlike all other aspects of election, it relies really nothing on merit, campaigning, or even fund raising - it's all decided by luck of the draw. Contrary to both Mueller and Weingast & Moran's analysis of the Congressional committee and sub-committee effectiveness, Congressional office lottery is neither truly hampered by bureaucracy, nor does it in any way work to exercise systematic control over bureaucracy. It's really funny to note that the worst office selections are considered so due to a lack of amenities in cases, and otherwise due to oddities - such as the office at 128 Cannon, which has a women's public bathroom cut into it. Unluckily for him, Republic elect Robert Hurt from Virginia drew lottery number 85/85 and was forced to occupy an office in between a bathroom and a stairwell. Regardless of the terrible location, it's interesting to note that his office is still 842 square feet - considerably larger than many studio apartments. Before you start feeling bad for the incoming lawmakers that drew late numbers, realize that illustrious employees across the world would gladly trade anything for an 842 square foot office. Additionally, Rep. Gary Peters makes everyone feel no sympathy or pity for the rookie legislators by saying, "They spend very little time actually in the office." Judging by the upcoming predicted gridlock on the floor, due to highly diversified party representation, the legislators won't spend very much time making laws either.

The TSA vs. The American Traveler Dignity Act of 2010

The link found in the title describes a proposed bill by Congressman Ron Paul. In reaction to the Transportation Security Administration's (TSA) heightened security checks using x-ray technology and enhanced pat-down screening protocols, Mr.Paul has written out H.R. 6416:The American Traveler Dignity Act. This bill proclaims that "no law...shall be construed to confer any immunity for a Federal...agency...who subjects an individual to any physical contact...x-rays...as a condition...to be in an airport or to fly in an aircraft."

In light of this development, how can Niskanen's traditional approach help us understand the TSA's actions and the response by Congressman Paul? One of the crucial implications of Niskanen's view is that the federal agency, like a monopoly supplier, will want to produce more than the sponsor wants, thereby getting more profits/funds/power. In accordance with this view, because of 9/11 and terrorist threats, the TSA has expanded and ramped up its efforts to ensure that airports remain safe. Because the demand for their services has become rather inelastic, they have the ability to extract more surplus value. Congressman Ron Paul's proposed legislation though illustrates how the Congress can in fact curve a bureau's ability to "run wild." Some would therefore claim that this provides evidence for Weingast and Moran's model that argues that to "understand regulatory policymaking we must understand legislative politics." Although legislators may not be continously or directly monitoring the federal agency, Congress possesses sufficient rewards and sanctions to creative an incentive system.

The problem with this argument in this particular case is that the legistlation proposed still has to pass through the House Judiciary committee for approval. One of the essential components of the Congressional Dominance Approach is that rewards "go to agencies that pursue policies of interest to the current committee members" while "those agencies that fail to do so are confronted with sanctions." Therefore this bill is not an example of the relevant committee demonstrating its influence over the TSA; rather, this bill seeems to be evidence that the federal agency has operated independently of Congress. Ron Paul, who oftentimes points out the inefficiency of federal agencies, is trying to explicitly limit the power of this "unaccountable government entity." (from Paul's speech) In order to know which model is more accurate, we will have to see what the House Judiciary committee and the subcomittee on the Constitution, Civil Rights and Civil Liberties in charge of overseeing the TSA deciedes. Furthermore, the Weingast and Moran model still might hold because the committee might in fact favor the actions taken by the TSA to heighten security screenings, thus explaining why Mr. Paul's legislation will not pass and the status quo persists. More importantly, if H.R. 6416 fails, it will demostrate how the isolation of some federal agencies allows them to increase their power and reach without being subject to efficiency incentives.

The Energy and Commerce Committee and the FCC

This article from Politico is a great example of Weingast and Moran’s congressional dominance model. It describes how the Republican representatives who could potentially come to lead the Energy and Commerce Committee in January are issuing a clear warning to the FCC (which it oversees) to stop pursuing net neutrality. Net neutrality is a set of regulations that would require all internet providers to treat all web traffic equally. The reaction from the representatives followed an announcement that the FCC would address net neutrality in its December meeting. A total of 19 representatives signed a letter warning the FCC that moving forward with net neutrality would be “a mistake.” Rep. Fred Upton (R-Mich), considered the frontrunner to lead the committee threatened that “the FCC will be prominently featured and Chairman Genachowski will soon be a familiar face on Capitol Hill” if the FCC moves ahead with net neutrality. As Weingast and Moran’s model predicts, the FCC was proceeding with little congressional interference, until there was a change in the policy preferences of the relevant committee. This change in interest has been made clear and congress has asserted its dominance over policy by issuing threats of hearings and investigations. Also interesting are Rep. Upton’s top campaign donors, AT&T, Comcast, the National Cable and Telecommunications Association, and Verizon all of which have an economic interest in preventing net neutrality regulation.

The Bleakness of a Bureaucratic Lifestyle

This article from The American Thinker, published in 2007, explains the failures of a system entrenched with bureaucracies, at almost every level of organization, that are doomed to fail. The author writes three examples, each with starkly different circumstances, where bureaucratic thinking led to disastrous results. The first was the failure of the British Navy in the Persian Gulf, the second was the tragic school shooting at Virginia tech, and the third is the War on Terror.

In the first event, priceless time was spent checking and rechecking with officers and superiors to determine what should be done, resulting in a "humiliation by a militia of speedboats." He tells an anecdote of legendary Horatio Nelson, who decided to ignore an order he thought must be a mistake, and went on to win a crucial naval victory. The author claims this blatant disregard of standard procedure was the obvious correct choice. At Virginia Tech, despite numerous incidents that seem like clear red-flag-raising warnings, nobody could connect the dots and declare Cho Seung-hui a threat. And in the War on Terror, the author says the problems of bureaucracy are "everywhere."

Though it seems hasty to claim that following orders in the military equates to dumbly obeying an inefficient bureaucracy, he says, "It used to be understood that there where times when you would throw out the rule book." Easier said then done, obviously, but that's entirely his point. He sees the system overrun with bureaucratic incompetence, where we believe, in government at least, that it's "The only way of doing things." He mentions the typical argument that one makes about bureaucracies: that they are self perpetuating, and that they don't work to the ends for which they were created. He also mentions a different problem: bureaucracies rely on rational rule-following for people whom, he says, are often unpredictable or irrational. And in some situations, trying to follow a by-the-book paint-by-numbers solution is the most impractical thing to do.

What is his solution? It's bleak, really, because as he points out: any chances at reform of the bureaucracy must make it through a bureaucratic system. No, he says, the only thing that can save us is individual willpower and determination, an inherent drive to be self-sufficient. Hard to do when you have to fly home this Thanksgiving break and enjoy some quality time with the TSA agents.

Homeland Security: Boom and Bust

Even though Congress doesn't devote a lot of resources in assessing the effectiveness and faithfulness of various bureaucratic departments, there are plenty of watchdog groups who are fully committed to reporting shirking in U.S. politics. The Center for Public Integrity is one such group and this year they have published an extensive report on the Department of Homeland Security (DHS). The report is extremely thorough as it demonstrates how officials have used funds in each state. My favorite is in California, where "a university campus police department purchased a $2,300 plasma TV." It is true that we cannot measure how many units of protection that the DHS has produced, but I am not sure the DHS can justify a lot of the ways that money has been used in the states. The problem is that the government has been streaming money non-stop to the DHS; after all, they are the ones responsible for domestic safety, and who are we to know better? It certainly looks as though the DHS operates independently from Congress, which continues to give it money without question.
Determining whether bureaucracy or Congress wields the power in the DHS is a worthwhile endeavor. One can easily see how the DHS' monopoly on the knowledge on how best to protect this nation elicits a very generous budget from Congress, but could it be that this budget actually stems from the Congressmen's constituents' desires for more security? It wouldn't be an exaggeration that Americans are more paranoid since 9/11. The report criticizes the fact that there is no oversight over the DHS, but maybe the department is just going in the direction that Congress wants. It could be that by pouring money into the DHS, Congress is reassuring its constituents that the US is getting the best protection it can afford. It seems like a two-way street; Congress wants the DHS to achieve more security, as per constituents wishes, while the DHS wants as much funding as it wants to do it, however it does it. If it is true that constituents have a lot of influence on Congressmen, then third-party organizations like the Center for Public Integrity are crucial. To stem this kind of reckless spending, as we have read, requires significant feedback from the vaguely informed voters. But given the rational ignorance of voters, it would be difficult to know what's actually happening in the government without the efforts of such organizations.

BP and the Minerals Management Service

This New York Times article talks about a recent report compiled by a committee of experts within the National Academy of Engineers. The report puts blame not only on BP for the gulf coast oil spill, but also on the Minerals Management Service. The Minerals Management Service was the federal agency in charge of monitoring offshore drilling. Since the spill the agency has been dismantled and replaced by the Bureau of Ocean Energy Managment. The article says that there were insufficient checks and balances for the decisions made at BP and the committee found that "the minerals agency had failed to put in place the oversight that could have helped prevent the blast, as well as procedures that could have saved lives." Our recent study of bureaucracy identifies two different camps that address the relationship between government agencies, Congress, and the resulting inefficiency in bureaucracy. First, we can consider that the bureau was acting autonomously and decisions they made were insulated from both Congress, and from American citizens. They had no incentives to put in extra monitoring effort of BP and as long as nothing terrible was happening, everyone was content with the results. Alternatively, we can consider the congressional dominance model and would then need to place blame on BP, on the Minerals Management Service, and also on Congress. This model asserts that agencies are controlled by incentives and rules put in place by Congress. In this case, this kind of analysis would assume Congress either put limits on the investigatory power of the Minerals Agency and/or did not provide incentives for the agency to provide sufficient oversight. If the congressmen essentially controlling the Minerals Agency are elected by voters who support big business and receive campaign contributions from BP and other big oil companies this view definitely makes sense and would then extend blame for the oil spill to Congress as well.

What motivates HUD Secretary Shaun Donovan?

In this article from Thehill.com Rep. Dennis Cardoza (D-Calif.) and other House Democrats angry with the HUD’s response to the housing crisis escalated their fight Thursday by stripping the U.S. Department of Housing and Urban Development (HUD) Secretary Shaun Donovan of his travel budget in response to a trip Donovan took to Rio de Janeiro, Brazil. The House approved Cardoza’s amendment by voice vote, and it was later set on the Transportation, Housing and Urban Development spending bill. In this circumstance the "Budget Maximizing Bureaucrat"as Mueller would put it, used his budget for his own self use and as a consequence congressional action was taken against him. This also questions what really drives a senior Bureaucrat. In this circumstance, we see that Congressional oversight had control of HUD's budgetary process, which Weingast and Marshall state is one of three factors that allow congress to exercise control. So, even though in the case of most bureaucracies personal utility is not affected by job utility, in this case the repercussions not only affect Secretary Donovan but also affect the budget of the whole agency in achieving its goals of better housing for U.S. citizens. In a separate article from Federal News Radio, Secretary Donovan has also led HUD in Hiring Reform, in order to meet President Obama's goal of 80 days to bring in a new federal employee. The article states that , "The Department of Housing and Urban Development went from being the poster child for the dysfunctional federal hiring process to being a model of what others are striving for." I can attest to that after working there for the past four summers, trust me it has gotten a lot better (lol). The main point here is that there is most likely some ulterior motive that just wanting to adhere to the President's goal of 80 days to bring in a new employee. If the reputation of the agency or the output of the Bureau increases for the better, that will positively reflect on the Senior Bureaucrat, Shaun Donovan. So, there are a lot of motives for this reform that might not be clear to the average person. So it would seem, based on the information contained in these two articles, that the utility function of a Senior Bureaucrat discussed in Mueller is pretty applicable to Shaun Donovan because almost all of the criteria that make up that utility function can be seen in the actions of Shaun Donovan.

The Government Really Wants You To Eat Cheese

The U.S. Department of Agriculture created “Dairy Management” in 1995 as a marketing organization to promote dairy products. Its annual budget approaches $140 million, funded mostly by a government-mandated fee on the dairy industry. According to this NY Times article, the U.S.D.A. also gives several millions of dollars to the organization, “appoints some of its board members, approves its marketing campaigns and major contracts, and periodically reports to Congress on its work.”

Lately, the organization has been adamantly pushing cheese to the American consumer. Dairy Management partnered with Domino’s pizza to create a new, “better-tasting” pizza that contains 40% more cheese. A few years back, Dairy Management also created a marketing campaign around the premise that consuming more dairy products could lead to weight loss, even though no research asserted this fact.

By law, the secretary of agriculture approves Dairy Management’s contracts and advertising campaigns. Nevertheless, the article claims that the organization has become a full-blown, relatively independent company. The government has recently warned about the dangers of a diet high in saturated fat, yet it allows Dairy Management to market increased cheese consumption. This view of the Dairy Management organization follows Niskanen’s traditional view of bureaucracies that they act independently of the wishes of their sponsors (i.e. that a government bureau pushes for increased cheese consumption despite government warnings for reduced consumption).

However, I would argue that Dairy Management exactly follows the wishes of Congress and exemplifies the model of bureaucracy presented in Weingast and Moran. Undoubtedly, Congress members on the agriculture subcommittee for dairy closely follow and are happy with the work of Dairy Management. An increase in dairy sales pleases their dairy farmer constituents, and thus gives congressmen more votes. The government’s message for a reduced-fat diet (i.e. less cheese) is half-hearted – congressmen want votes more than they want healthy constituents. Therefore, Dairy Management isn't the one to credit for increased dairy consumption. Congress is.

Florida Congressman Takes Issue With the TSA

As the wave of protest against purportedly out of control government agencies continues to influence the public conscience, one agency in particular is taking a beating in the news. The TSA has come under heavy fire recently for its use of full-body scanners that have the potential to expose and embarrass airport patrons as well as its practice of rough and invasive pat-downs for those who opt out of the scans. One Florida congressman, Rep. John Mica, who is the ranking Republican on the House Transportation and Infrastructure Committee and is likely soon to be its chairman, has stepped up to advocate for airports to drop TSA agents in favor of employing private contractors.

"I think we could use half the personnel and streamline the system," Mica said Wednesday, calling the TSA a bloated bureaucracy.

The primary argument cited by Mica and his fellow critics is that TSA agents lack the incentive to treat passengers humanely, as they see no additional compensation for their efforts and the TSA bureaucracy is slow to respond to allegations of misconduct by their employees. Throwing more private contractors into the mix could add an element of competition and accountability that critics argue the TSA lacks.

Of course, airports can’t just hire anybody they wish – the TSA still needs to screen, select, and pay the contractors. In addition, contractors would have to follow all TSA regulations, which would still include the body scan (where available), shoe removal, and pat-downs. How is this much better than just having the TSA supply its own agents? Some proponents are arguing that these private contractors would be more responsive to patrons because they “would need local support to continue…business with the airport.” Contractors would also have more freedom to bring in part-time staffers during especially high-traffic periods, helping to prevent bottlenecks at security checkpoints.

If Rep. Mica gets his way, 100 of the largest airports in the nation might soon be weighing the costs and benefits of such a switch.

If Olson was a sports fan, this would have been his perfect nightmare

A year or so ago Brian Frederick created an interest group called the Sports Fans Coalition and has been trying to find and organize a diverse group of American sport fans in order to give them a voice in Washington. His main objective is to target “television blackouts, the Bowl Championship Series, and the ballooning costs of attending games” and making sports fan’s voices heard on related public policy issues.

Frederick states that finding potential members has been the easy part (there are millions of fans out there); organizing the fans and raising money from members has been the difficult part. Currently Frederick has found a way to raise money for his interest group other than membership dues. Verizon and Time Warner Cable—“both concerned with access to sports programming on its systems”—have made generous donations to the cause. Nevertheless, Frederick wants break away from depending on corporage donations and become a member-funded organization. Had Frederick read Olson's work he would have realized what he was getting himself into. As Olson predicts, in large groups there is a huge incentive for members to free ride; assuming sports fans are economically rational what incentives would they have to share costs (especially when everyone already has to pay for cable or satellite)?

Another concern is the difference between what Frederick considers the interest of the group versus the interests of each member. Frederick is organizing a group of many different sports fans. A baseball fan may not follow football, and vice versa. Who says the baseball fan is willing to share the costs of reducing ticket prices to a football game? That’s just one conflict of many.

Spending Under Control?

This afternoon, House Republicans voted in favor of eliminating earmarks on legislation passed during the upcoming session of Congress. The incoming Majority Leader, John Boehner claims that, “’Earmarks have become a symbol of a Congress that has broken faith with the people.’” This would signal the intention of representatives to follow the wants of their constituents instead of shirking their responsibility. However, this will make a great deal more difficult to obtain subsidies and benefits for their constituents, which will negatively affect them. This does not appear to be as large a concern to Republicans, who ran on a platform of greater fiscal conservation during these elections.

“House and Senate Republicans are now united in adopting earmark bans,” said Mr. Boehner, who will be the new Speaker of the House, inn his statement. “We hope President Obama will follow through on his support for an earmark ban by pressing Democratic leaders to join House and Senate Republicans in taking this critical step to restore public trust.”

At this point, Senate Democrats haven’t agreed, and it remains to be seen whether the House would vote on bills from the Senate that included earmarks.

The End of US Postal Service

      In a recent Washington Post article, the USPS reported an $8.5 billion loss this past fiscal year, claiming that it will run out of money by 2011 unless Congress takes action, with most of the losses coming from obligations to retiree health benefits and workers’ compensation. This all happened even with cuts in costs and the removal of 105,000 jobs. The inefficiencies of a bureaucracy are clearly portrayed through this example.

      The USPS works as the agency between the citizens and the government that makes the laws and regulations. Because the USPS is such a huge organization, the relationship between the individuals and the government leadership is very distant. As a result, the bureaucrats are not urgent to make changes to the regulations and laws because they don’t have an incentive to please the individuals. They don’t really worry about it either, because they don’t have to deal with the complaining directly. It is extremely hard to get anything done.

      Chief Financial Officer of the Postal Service Joe Corbett calls for a change in legislation, regulation, and labor contracts. However, the presumptive future chairman of the postal affairs House committee Darrell Issa suggests that the USPS should cut costs even more, rather than risk changing the workings of a postal system that currently does not use taxpayer funding. In addition to the lack of incentive, representative Issa may be doing this to gain more power. Because he doesn’t gain anything if the USPS does well, he has more control and power when the USPS does poorly and comes to him asking for help.

      To circumnavigate this problem, the Postal Service proposed plans that would allow them to make changes without congressional approval. To decrease the losses, the USPS also wants lawmakers to change the law that requires $5 billion in annual payments to retiree health benefits. The fate of our mail depends on if Congress decides to make some changes!