14 January 2013
Who Benefits From Austerity?
For ordinary people, including families and businesses, when they find they have a budget shortfall, they either need to increase revenue somehow--get a job, for example--or practice austerity--belt tightening, cutting back on expenses. Putting off buying a car, moving to a house with lower rent or mortgage, perhaps even smaller measures, like saving a little on food or entertainment, may make the difference between positive and negative cash flow. But what happens if a whole community is having a budget shortfall at the same time? One persons spending is another persons income. What happens is the whole community declines--a "race to the bottom". John Maynard Keynes called this "the paradox of thrift". They only way to break the vicious cycle is for somebody to spend. Often this is an outsider. If a community can attract an outside business by giving it tax breaks or other concessions, it creates employment for locals. But in the larger economy, this is a losing game. If you attract Walmart or a factory to your community by giving it tax breaks or a non-union workforce, you have deprived the businesses that tried to compete with Walmart of their revenue, including other communities, you've deprived yourself of taxes to provide necessary services such as roads and welfare, and you've deprived your workers of protections from abusive management. The factory was going to go somewhere. Your town may benefit over the short term, but the larger economy does not.
Government can play the role of the outsider--government spending doesn't doesn't really come out of the economy--nearly all that spending goes to businesses and workers. It's merely redistributive. Moreover, provided government taxes equally, those taxes don't hurt anybody--everybody is left with exactly the same buying power. Government is one of the few organizations whose interests are purely those of the country at large. It risks being corrupted--to redistribute unfairly, to those with political influence--but as long as most decision making is conducted in the open, the people have a chance to fight this.
Government debt is unlike family or business debt, or even that of a larger community, like a state. The small unit can get itself over a bad spell with austerity. But the government cannot. Broad austerity just lowers spending for everybody. But there's a way out: the government has the ability to print money. Too much of this causes inflation, with the instability that brings, but within moderation, this can be a good thing. Among other things, inflation makes debts get smaller. The people who sell debt try to calibrate them to inflation, but there's a market for that, and if they go too far, the borrower will look elsewhere. Government, uniquely, has the ability to set its own rates.
So who is it that is trying to convince us that government austerity is an important thing? The people who make a profit by keeping interest rates high relative to inflation--the people who are lending to government: the big banks. The thing they least want is for government to inflate its debt away. They have an easy to understand analogy that their spokesmen and lobbyists pitch: family belt tightening. But the government is not a family. Do they care that their greed is keeping the economy down and ruining the future prospects of tens of millions of Americans? Not a whit.
No country has ever cut it's way to prosperity. Government and business spending is the only way it's ever been done. Neither is happening right now, and it's killing us.
12 January 2013
The Disenfranchisement Strategy
One of the most insidious rhetorical strategies is to disenfranchise
your opponent. This can occur in many ways, but logically, they boil
down to the "no true Scotsman" falacy: believing such a thing renders
you unworthy to participate.
At the moment, a series of mass shootings has elevated the topic of gun control in the public consciousness. The gun lobby, predictably, says that after such a shooting is not the time to have such a discussion and we shouldn't let our emotions overcome the supposedly reasoned position they want us to take. These shootings have become so commonplace that by that logic, there will never be a time to discuss this. Of course, that's exactly what they want. Their goal is to disenfranchise everyone who disagrees with them.
The "voter fraud" meme became a popular strategy for the Republican party in 2004, when they first started losing a few elections. Here in Washington State, Dino Rossi attempted to prove that illegal voters in Democrat leaning districts had boosted their results. When the courts did a careful examination, nearly all of the "illegal" registrations proved to be a misunderstanding on the part of those claiming voter fraud. In fact, election fraud is quite an old problem, and the Republicans have been very guilty of it. This came to a particular head in November 2000. Using a technique called "caging", legitimate voters with recent address changes in districts tending to vote Democratic were sent a letter. The addresses included soldiers recently called to duty, college students, and others who would likely be living at a temporary address. The subject of the letter contained harmless Republican politicing, but the trick was on the envelope itself, which said "Do Not Forward". Letters returned to sender would be used to generate a list, which was sent to a cooperative voter registration officer to remove those names from the list of registered voters. At least 40,000 such names were removed from Florida polls shortly before the election of 2000. The official (not recounted) result from this election was Bush winning by 537 votes. When attempts to recount the ballots that were cast were made, Republican troublemakers disrupted the recount effort, culminated in the Republican-dominated supreme court determining that it was impossible to complete a recount in the time available. In the election of 2004, evidence for hundreds of thousands of miscounted or bogus votes in Ohio, Florida and other swing states--more than enough to change the result and consistent with the surprising difference between exit poll results and the final tally.
In 2012, many states had efforts to disenfranchise voters by requiring them to have some piece of ID that would be difficult to obtain if they were poor--generally called "voter suppression laws". The courts overturned most of these, but several Republican operatives openly admitted that the strategy was disenfranchisement of voters likely to vote Democratic.
William F Buckley was a master of techniques that would confuse or quiet his opponent. The simplest and most frequently used was to shout louder--Bill O'Reilly and a number of others frequently use this technique today. But another was to say something that would leave his opponent confused or startled, during which time Buckley would prattle on about his own position, leaving the quieted opponent looking helpless and foolish. During a panel discussion after the TV nuclear winter movie "The Day After", Buckley said "But don't you think [the movie] is tendentious?" It was obvious that nobody else on the panel knew what the word meant, but didn't want to admit it. (I had to look it up. Tendentious means "intending to promote a particular point of view, especially a controversial one") The correct response was "yes, of course it is, that's the whole point of the movie."
The Republicans strategy in the late 90s and early '00s was to create a "Permanent Republican Majority", to make sure they'd preserve power even if they couldn't win it legitimately. In quite a few states, they've gerrymandered congressional districts to the point that even though there were a clear majority of Democratic votes, the states sent a Republican congressional delegation. They've been very good at winning the elections that counted for redistricting: 2000, 2010, by hook or by crook, and have used those wins to retain power against fairly severe defeats.
The current US Senate filibuster is another illustration: if the majority can't muster 60%, the minority can block any measure or nomination, simply by saying so.
At the moment, a series of mass shootings has elevated the topic of gun control in the public consciousness. The gun lobby, predictably, says that after such a shooting is not the time to have such a discussion and we shouldn't let our emotions overcome the supposedly reasoned position they want us to take. These shootings have become so commonplace that by that logic, there will never be a time to discuss this. Of course, that's exactly what they want. Their goal is to disenfranchise everyone who disagrees with them.
The "voter fraud" meme became a popular strategy for the Republican party in 2004, when they first started losing a few elections. Here in Washington State, Dino Rossi attempted to prove that illegal voters in Democrat leaning districts had boosted their results. When the courts did a careful examination, nearly all of the "illegal" registrations proved to be a misunderstanding on the part of those claiming voter fraud. In fact, election fraud is quite an old problem, and the Republicans have been very guilty of it. This came to a particular head in November 2000. Using a technique called "caging", legitimate voters with recent address changes in districts tending to vote Democratic were sent a letter. The addresses included soldiers recently called to duty, college students, and others who would likely be living at a temporary address. The subject of the letter contained harmless Republican politicing, but the trick was on the envelope itself, which said "Do Not Forward". Letters returned to sender would be used to generate a list, which was sent to a cooperative voter registration officer to remove those names from the list of registered voters. At least 40,000 such names were removed from Florida polls shortly before the election of 2000. The official (not recounted) result from this election was Bush winning by 537 votes. When attempts to recount the ballots that were cast were made, Republican troublemakers disrupted the recount effort, culminated in the Republican-dominated supreme court determining that it was impossible to complete a recount in the time available. In the election of 2004, evidence for hundreds of thousands of miscounted or bogus votes in Ohio, Florida and other swing states--more than enough to change the result and consistent with the surprising difference between exit poll results and the final tally.
In 2012, many states had efforts to disenfranchise voters by requiring them to have some piece of ID that would be difficult to obtain if they were poor--generally called "voter suppression laws". The courts overturned most of these, but several Republican operatives openly admitted that the strategy was disenfranchisement of voters likely to vote Democratic.
William F Buckley was a master of techniques that would confuse or quiet his opponent. The simplest and most frequently used was to shout louder--Bill O'Reilly and a number of others frequently use this technique today. But another was to say something that would leave his opponent confused or startled, during which time Buckley would prattle on about his own position, leaving the quieted opponent looking helpless and foolish. During a panel discussion after the TV nuclear winter movie "The Day After", Buckley said "But don't you think [the movie] is tendentious?" It was obvious that nobody else on the panel knew what the word meant, but didn't want to admit it. (I had to look it up. Tendentious means "intending to promote a particular point of view, especially a controversial one") The correct response was "yes, of course it is, that's the whole point of the movie."
The Republicans strategy in the late 90s and early '00s was to create a "Permanent Republican Majority", to make sure they'd preserve power even if they couldn't win it legitimately. In quite a few states, they've gerrymandered congressional districts to the point that even though there were a clear majority of Democratic votes, the states sent a Republican congressional delegation. They've been very good at winning the elections that counted for redistricting: 2000, 2010, by hook or by crook, and have used those wins to retain power against fairly severe defeats.
The current US Senate filibuster is another illustration: if the majority can't muster 60%, the minority can block any measure or nomination, simply by saying so.
11 January 2013
Suspension of Due Process
Several recent cases have illustrated how wrong it is to suspend due process. There is never a crime so heinous, or a case so cut and dried, that due process can be suspended. These cases include the Bradley Manning/Wikileaks case, the Adnan Farhan Abdul Latif Guantanamo case, and the Indian gang rape case.
In only one of these cases is there clear evidence that a crime had been committed by the person being held. In that case, the evidence is so clear, and the outrage so widespread, that few lawyers wanted to take the case for fear of social repercussions. This an outrage almost as bad as the original crime. The lawyer is not responsible for the crime; they are responsible for seeing that due process is properly observed. Being associated with a repugnant criminal should reflect on the lawyer as heroic. In India, it may take some education to get this point across, but even in this country, political ads attack defense lawyers for playing their role in due process.
Manning may have committed a crime, or he may have merely committed an act of whistleblowing, but it seems clear that holding him in solitary confinement for many months or even years, is much more severe than any crime that Manning himself may have committed. The harm he may have caused is mainly that carefully maintained secret relationships between the state department and some fairly bad actors came to light. This may make it harder to cultivate such relationships in the future. But Assange and the newspapers he was working with had made it clear that he would cooperate with the state department to minimize this. Instead, the state department refused, leaving Assange no recourse but go through with his release. The first murders committed by the Apache in 2007 were a clear case of the Fog of War. The helicopter gunners saw a camera with a big lens and mistook it for an RPG. Through careful review of the video, there appeared to be at most two guns, probably AK-47s, in the group, and it's clear in hindsight that these were there to protect the photographers in an area that had recently been a hot battle. This was terrible and should have been used to teach the pilots and gunners to be more careful. But the subsequent shooting of the van (containing two children) attempting to rescue victims was a war crime. Instead, the messengers, Manning and Assange, have been treated as criminals. Manning has not had anything even resembling due process. The guys who laughed when they killed photographers and children haven't either.
The criminal justice system is imperfect. Thousands of innocent have been wrongly punished and millions of guilty have not been. Trials often become media circuses. That the system is imperfect is not a reason to ignore it. It is a reason to keep trying to make it better.
In only one of these cases is there clear evidence that a crime had been committed by the person being held. In that case, the evidence is so clear, and the outrage so widespread, that few lawyers wanted to take the case for fear of social repercussions. This an outrage almost as bad as the original crime. The lawyer is not responsible for the crime; they are responsible for seeing that due process is properly observed. Being associated with a repugnant criminal should reflect on the lawyer as heroic. In India, it may take some education to get this point across, but even in this country, political ads attack defense lawyers for playing their role in due process.
Manning may have committed a crime, or he may have merely committed an act of whistleblowing, but it seems clear that holding him in solitary confinement for many months or even years, is much more severe than any crime that Manning himself may have committed. The harm he may have caused is mainly that carefully maintained secret relationships between the state department and some fairly bad actors came to light. This may make it harder to cultivate such relationships in the future. But Assange and the newspapers he was working with had made it clear that he would cooperate with the state department to minimize this. Instead, the state department refused, leaving Assange no recourse but go through with his release. The first murders committed by the Apache in 2007 were a clear case of the Fog of War. The helicopter gunners saw a camera with a big lens and mistook it for an RPG. Through careful review of the video, there appeared to be at most two guns, probably AK-47s, in the group, and it's clear in hindsight that these were there to protect the photographers in an area that had recently been a hot battle. This was terrible and should have been used to teach the pilots and gunners to be more careful. But the subsequent shooting of the van (containing two children) attempting to rescue victims was a war crime. Instead, the messengers, Manning and Assange, have been treated as criminals. Manning has not had anything even resembling due process. The guys who laughed when they killed photographers and children haven't either.
The criminal justice system is imperfect. Thousands of innocent have been wrongly punished and millions of guilty have not been. Trials often become media circuses. That the system is imperfect is not a reason to ignore it. It is a reason to keep trying to make it better.
20 December 2012
Ethanol
For a little while there, ethanol was being pushed as the replacement fuel of the future. The corn lobby was the biggest advocate, but other environmental-seeming groups jumped in. The future of the automobile seemed bright, and even though corn was quickly recognized as not optimal, switchgrass and other approaches seemed popular for a while. It looks like the hype has now died off, which is a good thing. Much of the support was coming not from people concerned with improving the environment, but from front groups sponsored by fossil fuel companies.
Professor Patzek puts the energy inputs to produce corn ethanol at about 7 times the energy produced. Today, nearly all of this is from fossil fuels, mostly petroleum and natural gas. These include agricultural inputs--fertilizer and pesticides, (which are substantially petroleum products) fuel to operate machinery, harvesting, processing (distillation being the big one), and transport costs. Ethanol is too volatile to be shipped in pipes--it has to be shipped in tanks, on trucks or trains. This is also why gasoline with some ethanol in it--typically E10--goes bad after a few months. All of these inputs are ignored and ethanol is treated as a zero emissions biofuel, for computing subsidies and tax breaks, over and above the crop subsidies for growing corn. This clearly not true, and is bad policy, at many levels. The process could be improved: no-till agriculture eliminates most fertilizer and pesticides and some of the other fuel consumption. Agricultural waste could be burned to power some of the distillation process (for corn, there's not enough of it to do it all). Converting to switchgrass would improve much of this. But even making the most optimistic assumptions, the energy required to produce ethanol is about four times the energy produced.
The bottom line is that ethanol, especially corn ethanol, is a boon to the fossil fuel and corn companies. The subsidies have distorted the market, and the corn and fossil companies have put up a big environmental-appearing front to try to improve their own profits. But it's a fraud.
Professor Patzek puts the energy inputs to produce corn ethanol at about 7 times the energy produced. Today, nearly all of this is from fossil fuels, mostly petroleum and natural gas. These include agricultural inputs--fertilizer and pesticides, (which are substantially petroleum products) fuel to operate machinery, harvesting, processing (distillation being the big one), and transport costs. Ethanol is too volatile to be shipped in pipes--it has to be shipped in tanks, on trucks or trains. This is also why gasoline with some ethanol in it--typically E10--goes bad after a few months. All of these inputs are ignored and ethanol is treated as a zero emissions biofuel, for computing subsidies and tax breaks, over and above the crop subsidies for growing corn. This clearly not true, and is bad policy, at many levels. The process could be improved: no-till agriculture eliminates most fertilizer and pesticides and some of the other fuel consumption. Agricultural waste could be burned to power some of the distillation process (for corn, there's not enough of it to do it all). Converting to switchgrass would improve much of this. But even making the most optimistic assumptions, the energy required to produce ethanol is about four times the energy produced.
The bottom line is that ethanol, especially corn ethanol, is a boon to the fossil fuel and corn companies. The subsidies have distorted the market, and the corn and fossil companies have put up a big environmental-appearing front to try to improve their own profits. But it's a fraud.
11 December 2012
The Failure of Banking
In the past few decades, banks and similar institutions have been allowed to consolidate, to get involved in businesses that had previously been out of bounds for them, to engage in a wide variety of scams, cons and ponzi schemes, all with impunity. Anyone familiar with the work of the Pecora Commission, John Maynard Keynes, and a host of others, could have predicted the consequences, and many did, from Byron Dorgan to Paul Krugman, to Brooksley Born, to Noriel Roubini. But they proved Cassandras. Five years after the bubble collapsed, the big banks are even bigger, yet instead of providing better services at lower cost, they're engaging in an ever growing list of petty scams--instead of offering interest and free checking, banks are charging for everything. A series of probably criminal and certainly incompetent screwups at Chase, Citi, HSBC and others indicate that this is not a successful business model. This is a race to the bottom. An astonishing series of unchallenging interviews by supposedly real reporters reveals that the men in charge do not understand, and do not care how the economy works, and do nor care what the consequences of their behavior is to 99.999% of the population. They're only interested in feathering their own beds.
The right thing at this point would be to do what Simon Johnson recommended 4 years ago and nationalize the banks. It might not be necessary to take them all, but certainly anybody with more than a handful of branches....assets over around $500M or so. The local banks and credit unions are often doing reasonably good service but are being swept up by the downdraft of the giants. All senior management of the giants should be banned for life from any business related to banking. I'm thinking burning at the stake would be about right, but sadly, the constitution bans that. The "national" bank would renegotiate mortgages and other loans and begin lending at traditional market rates. Like banking, it could be a profitable business, but as a government bank, it would be forbidden from making a profit, which eliminate most of the scams that the big banks now employ. As the economy improves, it could begin spinning off more and more small banks, which engage strictly in commercial banking and have rules analogous to the FDIC rules about capitalization, leverage and types of investment. But whenever one of them exceeds the size threshold, back into the national bank they go. If the banks are smart, they'll split themselves up before this happens.
It's probably not necessary to put such an onerous size limit on investment banks. They deal with larger amounts of money--frequently a single investment is larger than the cap on bank size would be. They're also not as subject to capitalization requirements. But they should still be small enough that if they fail, they fail, period, and the government can never feel tempted to step in. I think this puts an absolute limit of about $50B on them--about 1/3% of GDP.
In 1911, Standard Oil, which until then had about 70% of the US petroleum market, was split into 33 smaller companies. Within 5 years, 9 of them were larger than Standard had ever been. Petroleum was at the time a growing business, while banks are necessarily a finite share of the economy, but this is suggestive of what could happen if we broke up the banks. Imagine banks gaining customers because they're providing better service! I remember that happening in the 1970s and even into the 1980s a little. I know it could happen again. It doesn't need to be a race to the bottom, and we must not allow it to happen again.
Unfortunately, we probably missed our moment--the year or so after the Sept 2008 collapse. During the '30s, President Hoover and his allies did almost exactly the wrong thing, so Roosevelt had a mandate to really fix the problem. Bush, Paulson, Bernanke and Obama didn't actually compound the problem the way Hoover had, and although they didn't actually fix it, the TARP, the ARRA, Quantitative Easing and the symbolic but feckless "stress tests" put enough of a band-aid over it to start a slow recovery. We may need another bank-driven recession to give us the political will. The consequences of this will be terrible, but it may make us stronger in the end.
The right thing at this point would be to do what Simon Johnson recommended 4 years ago and nationalize the banks. It might not be necessary to take them all, but certainly anybody with more than a handful of branches....assets over around $500M or so. The local banks and credit unions are often doing reasonably good service but are being swept up by the downdraft of the giants. All senior management of the giants should be banned for life from any business related to banking. I'm thinking burning at the stake would be about right, but sadly, the constitution bans that. The "national" bank would renegotiate mortgages and other loans and begin lending at traditional market rates. Like banking, it could be a profitable business, but as a government bank, it would be forbidden from making a profit, which eliminate most of the scams that the big banks now employ. As the economy improves, it could begin spinning off more and more small banks, which engage strictly in commercial banking and have rules analogous to the FDIC rules about capitalization, leverage and types of investment. But whenever one of them exceeds the size threshold, back into the national bank they go. If the banks are smart, they'll split themselves up before this happens.
It's probably not necessary to put such an onerous size limit on investment banks. They deal with larger amounts of money--frequently a single investment is larger than the cap on bank size would be. They're also not as subject to capitalization requirements. But they should still be small enough that if they fail, they fail, period, and the government can never feel tempted to step in. I think this puts an absolute limit of about $50B on them--about 1/3% of GDP.
In 1911, Standard Oil, which until then had about 70% of the US petroleum market, was split into 33 smaller companies. Within 5 years, 9 of them were larger than Standard had ever been. Petroleum was at the time a growing business, while banks are necessarily a finite share of the economy, but this is suggestive of what could happen if we broke up the banks. Imagine banks gaining customers because they're providing better service! I remember that happening in the 1970s and even into the 1980s a little. I know it could happen again. It doesn't need to be a race to the bottom, and we must not allow it to happen again.
Unfortunately, we probably missed our moment--the year or so after the Sept 2008 collapse. During the '30s, President Hoover and his allies did almost exactly the wrong thing, so Roosevelt had a mandate to really fix the problem. Bush, Paulson, Bernanke and Obama didn't actually compound the problem the way Hoover had, and although they didn't actually fix it, the TARP, the ARRA, Quantitative Easing and the symbolic but feckless "stress tests" put enough of a band-aid over it to start a slow recovery. We may need another bank-driven recession to give us the political will. The consequences of this will be terrible, but it may make us stronger in the end.
06 December 2012
Bus Fares and Extrinsic Costs
In a busy society there are a lot of things which have extrinsic benefits and costs. The most popular example is pollution: in a laissez-faire world, a company can dump whatever it wants into the environment. If the company were living in a closed environment (think of a space station), it would have to deal with this pollution itself, but for centuries, they were allowed to pollute the (seemingly infinite) atmosphere, wetlands and waterways. During the 1970s it started to become clear that these were far from infinite and governments instituted various measures to force the companies to clean up. The companies resisted, of course. Now that it's becoming clear that CO2 is such a problem with particularly dire consequences, the polluters are resisting again.
Not all extrinsic effects are negative. Public transit is a benefit to everybody, but especially to the companies and their employees whose riders use it to commute to and from work. Many communities installed transit in the late 19th and early 20th centuries, generally subsidized by real estate developers. For a few decades, the fares collected from riders were sufficient to pay for operating costs, but as demands for expansion and maintenance grew, these became insufficient. Generally, city fathers have been farsighted enough to subsidize them from the broader tax base, but in the cases where they have cut back, the loudest complaints have been from corporate executives: employees can't get to work! They're getting the benefit, but not paying for it--very much like what was happening with their ability to pollute. Ultimately, society has to be taxed.
As a society, we need to face these extrinsic costs and benefits and be willing to pay to make them work as well as practical. There are lots of them--road construction and maintenance, public safety such as police and fire, building inspection, bank regulation, the postal service, lots more. These things are necessary. They don't always have to be government run: for example, most road construction and maintenance is done under government contract by private businesses, although a lot of emergency services--snowplows, sanding, pothole repair--are government workers. When it's practical, we can charge user fees to put as much of the costs as we can onto the people using the facility the most. Gas taxes and bus fares are good examples of this.
But we must not let the fact that some of the costs can be paid this way confuse us into thinking that these are like private businesses. They are not; they are public utilities. These fees should be the highest they can be without discouraging use, but no higher. Bus fares for poor people getting to work should not eat significantly into their take-home pay. To the contrary, we want to encourage people to use it, by making it cheap and desirable.
Not all extrinsic effects are negative. Public transit is a benefit to everybody, but especially to the companies and their employees whose riders use it to commute to and from work. Many communities installed transit in the late 19th and early 20th centuries, generally subsidized by real estate developers. For a few decades, the fares collected from riders were sufficient to pay for operating costs, but as demands for expansion and maintenance grew, these became insufficient. Generally, city fathers have been farsighted enough to subsidize them from the broader tax base, but in the cases where they have cut back, the loudest complaints have been from corporate executives: employees can't get to work! They're getting the benefit, but not paying for it--very much like what was happening with their ability to pollute. Ultimately, society has to be taxed.
As a society, we need to face these extrinsic costs and benefits and be willing to pay to make them work as well as practical. There are lots of them--road construction and maintenance, public safety such as police and fire, building inspection, bank regulation, the postal service, lots more. These things are necessary. They don't always have to be government run: for example, most road construction and maintenance is done under government contract by private businesses, although a lot of emergency services--snowplows, sanding, pothole repair--are government workers. When it's practical, we can charge user fees to put as much of the costs as we can onto the people using the facility the most. Gas taxes and bus fares are good examples of this.
But we must not let the fact that some of the costs can be paid this way confuse us into thinking that these are like private businesses. They are not; they are public utilities. These fees should be the highest they can be without discouraging use, but no higher. Bus fares for poor people getting to work should not eat significantly into their take-home pay. To the contrary, we want to encourage people to use it, by making it cheap and desirable.
28 November 2012
Going Halfway
Someone1 once said "There is nothing so useless as half of a bridge. You've wasted resources that could have been used on something useful, and you still can't get across the river." There are a lot of things which are like bridges, and are worse than useless if you don't finish them. But there are a lot of things that are worth starting even if you can't finish. If you're starving, it's worth eating a little, even if you can't afford a full meal. Likewise, if you've got a federal deficit, raising taxes on rich people will reduce the political pressure to resolve the problem and not hurt the economy in any way that is borne out by economic history, even though it won't completely solve the problem.
There are lots of cases where going halfway is a lot worse than finishing the job. The space shuttle was conceived as a much bigger project, with more, larger vehicles. Cost cutting reduced the efficiency of the ultimate design to the point that the total cost of the program was 450% (correcting for inflation) of the predicted cost of the more ambitious program delivering less than 10% of the projected payload to space. Most experienced engineers have been involved in projects where cutbacks intended to reduce development time or costs had the effect of increasing them--while damaging the product more than could possibly be made up by reduced costs2.
When deciding to cut back a project, be it a small engineering project or a national health care system, it's important to try to decide if you're saving money or producing half of a bridge. The evidence is pretty overwhelming--single payer healthcare, such as US medicare or the British national health, is far cheaper and produces better outcomes than piecemeal "market based" systems. People must have adequate health care. Cutbacks to medicare and medicaid will either make healthcare more expensive, or kill thousands.
1 I think this may have been the military strategist Karl von Clausewitz, but I haven't been able to find the reference.
2 My own experience with this was Microsoft C6. We'd planned an 18 month development cycle, but about 4 months in, this was shortened to 6 months. Three years later, we finally shipped a vastly inferior product to the one we'd have built on the original schedule, at perhaps triple the cost, to great loss of market share and prestige, and provoking most of the technical talent to leave the team.
There are lots of cases where going halfway is a lot worse than finishing the job. The space shuttle was conceived as a much bigger project, with more, larger vehicles. Cost cutting reduced the efficiency of the ultimate design to the point that the total cost of the program was 450% (correcting for inflation) of the predicted cost of the more ambitious program delivering less than 10% of the projected payload to space. Most experienced engineers have been involved in projects where cutbacks intended to reduce development time or costs had the effect of increasing them--while damaging the product more than could possibly be made up by reduced costs2.
When deciding to cut back a project, be it a small engineering project or a national health care system, it's important to try to decide if you're saving money or producing half of a bridge. The evidence is pretty overwhelming--single payer healthcare, such as US medicare or the British national health, is far cheaper and produces better outcomes than piecemeal "market based" systems. People must have adequate health care. Cutbacks to medicare and medicaid will either make healthcare more expensive, or kill thousands.
1 I think this may have been the military strategist Karl von Clausewitz, but I haven't been able to find the reference.
2 My own experience with this was Microsoft C6. We'd planned an 18 month development cycle, but about 4 months in, this was shortened to 6 months. Three years later, we finally shipped a vastly inferior product to the one we'd have built on the original schedule, at perhaps triple the cost, to great loss of market share and prestige, and provoking most of the technical talent to leave the team.
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