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The difficult first step

By Daniel M. Ryan
web posted March 20, 2017

True to earlier weeks, last week’s instalment of the Trump Administration gave us some dillies from the news. Rachel Maddow breathlessly announced on Twitter that she had gotten a two-page client copy of Donald Trump’s tax return from 2005, which she milked for about twenty minutes on her show. She then revealed that Trump paid 36.5 million smackers on a taxable income of $153 million, meaning that Trump’s rate of tax paid was higher than Mitt Romney’s Bernie Sanders’ and President Obama’s. It was anticlimactic enough to be in the same league as Geraldo Rivera’s 1986 mega-bust Al Capone’s Vault; Mr. Rivera was kind enough to inform Ms. Maddow of this.

And over in the corner of Hawaii, a judge put a stay on President Trump’s narrowed Executive Order belaying entry from seven trouble-spot countries. Once again, the legal reasoning (such as it was) distinguished itself by its thinness. Once again, we were treated with seeing President Trump’s campaign statements (!) being treated as admissible in terms of intent. Once again, we saw a partisanized standard applied ad hoc. Just imagine the lawsuits had Obama’s statement “If you like the doctor you have, you can keep your doctor, too�? been ruled admissible!

Fittingly, the judge who tripped up the Trump Administration had been appointed by none other than Barack Obama. And what do we see here? A picture from March 15th of none other than the same judge posing for a picture with none other than Barack Obama. A chummy snapshot taken before that same judge issued the stay, on the same day no less.

Leave it to former President Obama to give us a taste of what governance would have been like had his chosen successor won the White House.

Since the Resistance wouldn’t be the Resistance without a silly side, we got treated to a burst of plain gossip spread around as ‘news’. Former U.S. Attorney Preet Bahara became an ex-U.S. Attorney last March 11th, as part of a reboot exactly like 1993’s. Unlike then-U.S.-Attorney Sessions back in ‘93, Mr. Bahara did not step down quietly; the Internet was graced with sounds of protest. And last Friday, out came the gossip.

Thankfully, the week did have its serious side. Smack in the middle, President Trump unveiled his first budget request. It got the usual skim-the-surface treatment, which is what we’re inured to expect. That’s a shame in a way, because the full document [ .pdf file] shows that President Trump is quite serious about draining the swamp. If you voted for him on the grounds that he’d bring his business experience to paring down an overbearing federal government, you’ll find the entire document a pleasant read.

The Turnaround Budget

As Swamp-drainer-in-Chief, as a reform President, President Trump has set himself a challenging task. Even in the business world, the task is the most challenging assignment a CEO can undertake. President Trump’s budget is in essence a turnaround budget.

One of the main engines of government growth is an iron law of politics: it’s easier to say “We need a new program�? than it is to point out what existing programs are and how they work. If there’s complaints about poverty, it’s much easier to put up a law for a new poverty program than it is to dig into the ones extant and fine-tune them. Consequently, the number of programs multiply to the point of mind-numbing incomprehensibility. This metastasis has been true for a long time. Back in the late 1970s, Jimmy Carter vowed to reform the welfare system. He found out that the federal government contained more than 125 separate programs. Retreating, he exclaimed: “The complexity of the system is almost unimaginable.�?

Adding to the cruft is an essentially simple-minded evaluation of government programs. Stripped of its articulateness, the kernel of MSM-level analysis is surprisingly simplistic: “more money -> greater results.�? It has a lot in common with the notions of lottery winners. Most of them end up back where they were within five years. Contrary to what you may think, these folks do not blow their winnings on high living. They start small businesses - and find out that money cannot substitute for shrewdness and business experience. After starting with high hopes – and a “more money -> more profitable�? mindset, those folks wind up running through their winnings.

It’s an acquired skill – for many, a hard-to-acquire skill – to learn how to spend money shrewdly: to tie spends with feedback that tells you if the funds were spent wisely or foolishly. Consider education spending. Legions of folks with expensive formal educations stay stuck in the simple-minded mindset of “more spending per pupil -> better results.�? Never mind that it’s been demonstrated that there’s no statistical relationship between per-student spending and results; never mind that this lack has been an open secret for a long time. They still fall into the same old habit, and belt out strong-drink words when someone tries to shake them out of it. That truculence could be faith-based, but it could be rooted in nothing more that them getting angry because they’ve been made to feel stupid.

That thought-barrier isn’t stupidity, it’s force of habit. Back in the days when the biotech industry was getting off the ground, some startups got themselves into trouble because their chief scientists – who were very smart people – couldn’t shake themselves loose from their academy-bred habits. When they got their hands on financing, they treated the funds like an academic grant and proceeded accordingly. Whizzes in basic research, they found it hard to turn to producing products that would secure a profit. This got a lot of early biotech firms in trouble, and some of them went belly-up. Lack of smarts wasn’t the issue; the problem was a habit that amounted to “Money -> Publication.�? If the advances can’t be tied to profitable products, then it doesn’t matter how path-breaking the research.

The troubles with Big Government are similar. One of the most frequent reasons for cutting spending in the Trump budget is “duplicates other programs.�? A consequence of that iron law and the resultant mind-numbing complexity is a system where the right hand doesn’t know it’s doing the same thing as the left hand.

Another frequently-mentioned reason is “lack evidence�? that they work or “unable to demonstrate strong performance outcomes.�? The Dems have made a big fuss about “evidence-based policy,�? but their actions have shown that this neat-o slogan is just another sexy-sounding buzzword. President Trump’s budget shows that he and Mick Mulvaney are taking it seriously. Cutting or reducing a program on the grounds that money spent has not led to improved outcomes is evidence-based policy-making. If there’s no evidence that the money spent is doing any good, then the money shouldn’t be spent. That’s what policy based on evidence entails.

A third reason for cuts is prioritizing spending towards approaches that do have evidence that they work. In some cases, this means leaving it to the States or private enterprise. In other cases, it means abandoning one approach and redeploying government funds to another. “[F]ocuses spending on the highest priority activities necessary to effectively operate these programs.�? This too is implementing evidence-based policy: direct funding to the programs which show effectiveness. It also shows a realization that the government does not have a magical money tree which will bloom money forevermore. It shows budgetary maturity.

All in all, President Trump’s first budget shows that he’s quite serious about reducing governmental inefficiency. It’s like those diets designed for people who eat when they please. These diets start off by allowing for the same calories but on a fixed schedule. They do work – they work far better than fad diets or the good ol’ crash diet – but they’re hard. They’re hard because they feel radical, due to the breaking of dysfunctional habits and picking up better habits, and they also feel pointless. While the bad habits are lost and the good habits are instilled, you don’t lose any weight: it seems like you’re suffering for nothing. But it’s those new habits that enable you to reduce your intake. You have to see through the frustrating part before you reduce your intake and see the weight loss you’re sacrificing for.

Slimming down government requires the same restructuring. The first part, frustrating but crucial, requires breaking the old “problem -> spending�? habit and learning how to spend smarter: how to prioritize and how to judge spending by results. True: the total reduction in discretionary spending is small, and overall spending will not change all that much. But underneath the surface, the Trump budget shows a definite aim at breaking the old free-spending habits and replacing them with new, smart-spending habits.

It shows that he’s very serious about getting government spending under control – and about making government less dysfunctional. Even if the results don’t show right away, there is a lot under the surface.

As many already know, the wackiness in the news cycle is concealing President Trump pursuing real structural reforms that will make things better. If you voted for President Trump because of his business acumen, you are getting your vote’s worth. ESR

Daniel M. Ryan, as Nxtblg, is shepherding the independently-run Open Audi Initiative Prediction Market Shadowing Project. He has stubbornly assumed all the responsibility and blame for the workings and outcome of the project.



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