It reminds me a bit of Lincoln’s wellknown wisecrack about the man who was tarred and feathered and ridden out of town on a rail, somebody asked him how he liked it, and his reply was if it was not for the honor of the thing, he would much rather walk. I see that Illinois’s public pension system has made RealClearPolicy’s “Waste of the Day” to the tune of more than $15 billion per year:

While businesses struggled under the lockdowns put in place by Illinois Gov. J.B. Pritzker and Chicago Mayor Lori Lightfoot in 2020, the high-earning employees of state and local government had a record year.

Our auditors at OpenTheBooks.com discovered that more than 122,000 public employees and retirees earned over $100,000 last year, as compared to 109,000 employees in 2019 who collected that much.

I do wonder about how robust that finding is. They record that there are 16 school superintendents receiving $300,000 or more in pensions. I agree that’s excessive. But they don’t tell me, for example, how many of those present employees and retirees are drawing more than $150,000 per year. I agree that Illinois public pensions are exceedingly generous but I’m less concerned about those receiving $100,000 a year in pensions than I am about those receiving $130,000 or more in pensions. In statistics-speak what’s the mode on that finding?

To the extent that it exemplifies thinking in the New Right, I found this article by Cole Simmons at The American Mind interesting:

Before the Spirit of ‘76 there were two generations of theorizing and political change. From John Wise’s naughty little book to Patrick Henry’s noble speech in the Virginia House of Burgesses, nearly 60 years of theorizing and acting prepared for the emergence of the American. A new work is underway. We probably won’t be sticking to the name “American Whig” and I doubt there will be a republican solution. The republican was a great type of man in American history, but we cannot will him back into existence. The township cannot be artificially constructed. Property cannot be artificially made equal enough, and a relative equality in property would be necessary. We cannot make the populations small enough. The militia will never again be the backbone of our military. These hurdles and many others lead me to believe the republican character of the citizens is through.

Sadly, I find the thinking of the New Right just about as concerning as that of Bernie Sanders-style democratic socialists or Black Lives Matter activists. It is far too elitist, too rejectionist, and, frankly, not conservative at all.

I agree with the conclusions expressed in Steve Sacks’s post at The Diplomat on the strengths and weaknesses of the Chinese People’s Liberation Army:

Xi Jinping and the Central Military Commission recognize that the introduction of advanced weaponry to a military force that is ill-trained and ill-managed will not result in a PLA that can achieve the party’s strategic objectives. However, new hardware enables Beijing to perpetuate its projected images of military strength while concealing continued shortfalls related to military reform.

U.S. defense analysts and policymakers should watch for indications of improvements across Xi’s identified critical PLA shortfall areas to generate clear and comprehensive assessments of progress within both PLA modernization and reform campaigns. Indications of continued progress can provide critical insight into party leaders’ confidence in the PLA’s ability to compete, fight, and win wars, while also highlighting areas of continued shortfall throughout the force. If military analysts and policymakers focus solely on the procurement of new hardware, longer range missiles, more capable ships, and stealthier aircraft, they risk only seeing half the picture and risk making the PLA out to be 10 feet tall.

Although the more aggressive stance that China has taken lately towards its neighbors does concern me, I’m not as concerned about the threat posed by the CPLA as many people in the U. S. for two reasons. First, I think much of the CPLA is focused internally. Second, I think that military doctrine is a vital force multiplier and China has several handicaps in that regard that they cannot address either with new hardware or training.

I want to draw your attention to a fantastic post at Morningstar by John Rekenthaler on the relationship between the performance of individual stocks and the performance of the stock market indices. Here’s a snippet:

The larger companies were far more reliable than their smaller rivals. Whereas 42% of the overall stock universe persisted for the full decade and posted a positive total return, 77% of the biggest 1,000 companies did so. Conversely, once the larger fish had been removed from the list, the success ratio of the next 4,000 stocks dropped to just 33%. Even though the decade contained a prolonged bull market, most smaller stocks recorded a loss, not a gain.

It’s full of interesting graphs. Although I recommend reading the whole thing, if you’re not willing to do that I’ll summarize his findings:

• The majority of stocks either decline or cease to exist over time.
• The stocks that go up over time tend to be those of large companies.
• Almost all of the stock indices performance is produced by a very small number of stocks.
  

  Bessembinder’s boldest claim was that 4% of the U.S. stock market’s companies accounted for its entire gains. Such math does not hold during bull markets. (If an index appreciated by 1% for the year, a single stock could well be said to have accounted for all its gains. If the index appreciated by 30%, then many, many stocks will be required for the task.) However, as shown by the following table, which measures the performance con

I look forward eagerly to his next post on the implications of it all. I would add that the small companies tend to employ more people relative to their total earnings than large ones do and that large companies are more likely to be subsidized in one fashion or another. Since so much of the increase in income and wealth inequality is derived from stock market performance, that means that government policy is actually subsidizing reduced unemployment and inequality.

In an op-ed in the Wall Street Journal Elliot Abrams seeks to craft a new foreign policy consensus based on six principles:

First, American security depends on leadership. The U.S. must remain the most powerful and influential nation in the world. Tempting though it may be, threats won’t simply go away if America retreats into isolationism. On the contrary, these challenges are likely to get worse.

Second, a strong America is a safe America. The U.S. must have a well-funded, effective military and security infrastructure to protect its people and deter aggression.

Third, strategic cooperation serves U.S. interests. Robust alliances among sovereign nations and the strategic use of multilateral institutions advance American security. The U.S. alliance system is a huge asset that must be strengthened.

Fourth, free and fair trade advances the prosperity and security of the American people. The U.S. must sustain its defense industrial base, lead efforts against predatory economic practices such as intellectual-property theft experienced in recent decades at the hands of China, and promote respect for the rules of international trade and commerce.

Fifth, we support a proud U.S. foreign policy that champions American values without apology.

Sixth, foreign policy should be responsive to all Americans—not only those in Washington or with the clout to hire lobbyists. The effect of trade deals on employment, for example, should weigh at least as much on policy makers as their effect on the corporate bottom line.

I would propose just four:

1. American hard and soft power is based on its economic strength. Its economic strength depends on a diverse economy in which primary production and secondary production play prominent roles. We cannot base our economy primarily on retail and health care.
2. An American military that depends on imported goods cannot be a strong military.
3. An over-extended American military cannot be a strong military.
4. We do not go abroad in search of monsters to destroy. We are the well-wishers to the freedom and independence of all. We are the champion and vindicator only of our own.

I don’t think they’ll catch on because there is more money to be made from the way we’ve been doing things for the last 30 years.

The editors’ of the Washington Post’s snap reaction to President Biden’s spending proposals resembles mine above:

Democrats worked to slash child poverty in their last coronavirus aid bill by expanding the child tax credit. Mr. Biden proposed keeping the expanded credit only until 2025, probably because making it permanent would be very expensive. Fighting child poverty should take precedence over free community college, and if Democrats expect to continue the expanded credit beyond 2025, they should budget for it now.

Even after limiting child tax-credit spending, the taxes the president proposed would not cover the whole cost of his plan over 10 years. In theory, tax hikes from his previously proposed infrastructure plan could fill the gap in later years, but only if Congress allows the programs with expiration dates to end and new tax increases to remain in place permanently. Moreover, it is unclear whether the amount Mr. Biden proposed spending on Wednesday would be enough to guarantee quality child care, paid leave and other promised benefits.

Mr. Biden pledged not to raise taxes on anyone making less than $400,000 per year. Meantime, the federal government is running huge deficits, even as new census numbers show that the United States is aging and population growth is slowing, which will strain already expensive federal old-age programs. Climate change, future recessions and other issues may require emergency spending on a scale policymakers cannot anticipate. Though many in Washington have set aside concerns about the debt, the nation is still entering uncharted fiscal territory.

Mr. Biden can keep his tax pledge or create a strong, sustainable federal safety net. He probably cannot do both.

while the reaction of the editors of the Wall Street Journal is even more pointed:

One question to ask is: Haven’t we tried this before? What is Head Start if not government pre-school education and child care? Weren’t school lunches and the Women, Infants and Children program supposed to prevent child hunger? Food stamps, welfare checks, child-care subsidies and a supplement to earned-income, plus public housing. Weren’t all of these programs and more from previous decades supposed to end poverty?

Why did the trillions of dollars spent on those programs fail? And if they didn’t work, why do we need more?

For the candid answer, listen to Rahm Emanuel, the Chicago Democrat who explained the political calculation this week to the Washington Post: “Once everyone’s in, all the parents want in. Then it’s not a poor person’s program or a poverty program. It’s an education program. . . . That to me, that is essential. It changes the center of gravity once it’s for everybody.”

So much for the “safety net” to prevent poverty. This is now about mainlining benefits to middle-class families so they become addicted to government—and to the Democratic Party that has become the promoting agent of government.

Democrats are enamored of this principle of “universality” because it has worked to sustain the popularity of Social Security and Medicare, despite their failing finances. But those programs promise benefits in return for work across a lifetime. The Biden New Deal isn’t a deal at all. Most of its programs are free handouts on the model of the 1960s Great Society.

A limitation unmentioned by either is that the federal government does not have the authority to mandate two years of universal pre-school. It can make funds available contingent on such a mandate from the states but it cannot impose one itself.

As I said before I don’t object to education, health care, child care, or elder care but I do think that one year’s worth of spending on those things should be paid for with one year’s worth of taxes and if you don’t have the courage to do the latter, doing the former is not particularly virtuous. Both ends and means are important not just the benignity of your intentions.

Borrowing to pay operating expenses is a bad idea whether you’re talking about a family or a country. Road repair, health care, elder care, and child care are all operating expenses. If you’re committed to the idea that they should be funded by the federal government, that should be completely paid for through tax dollars. If you can’t pay for them through tax dollars, they shouldn’t be within the province of the federal government.

I want to point, approvingly, to another post at Project Syndicate by Mariana Mazzucato:

In my new book, Mission Economy: A Moonshot Guide to Changing Capitalism, I argue that NASA’s program to put a man on the moon still offers lessons in catalyzing and governing public-private relationships that deliver results. Costing taxpayers the equivalent of $283 billion today, the Apollo Program stimulated innovation in multiple sectors – from aeronautics and nutrition materials to electronics and software – while also strengthening the public sector’s own capabilities.

NASA paid hundreds of millions of dollars to companies like General Motors, Pratt & Whitney (known then as United Aircraft), and Honeywell to invent the new fuel, propulsion, and stabilization systems inside its legendary Saturn V rockets. These publicly funded technologies then created numerous spinoffs that we still use today, including baby formula (from the astronauts’ dried food) and cordless vacuum cleaners (from the machines that scoured the moon’s surface). The integrated circuits used for navigation were a foundation stone of modern computing.

Critically, NASA made sure that the government got a good deal, offering companies “fixed-price” contracts to force them to operate efficiently, while also providing incentives for continual quality improvements. And the contracts’ “no-excess profits” provisions helped to ensure that the space race was driven by scientific curiosity, not greed or speculation.

One thing that ever mission needs is a mission statement. Here’s a good one:

We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too.

It has all the components of a good mission statement. It is succinct; it states the goal in straightforward terms; it is inspiring; and it establishes a timeframe and deadline.

As should be apparent from that some projects lend themselves to good mission statements while others do not. Building a new power grid in ten years does; declaring war against cancer does not. Going to the moon does; systemic racism does not. Building Boulder Dam does; lowering carbon emissions does not.

I’m in favor of new federal missions but I’m opposed to open-ended, likely impossible, and questionably practical boondoggles. You can tell the difference between the two based on their mission statements and how they’re run and overseen.

It takes economist Michael J. Boskin a while to get to his point in his analysis of Joe Biden’s spending plans in a piece at Project Syndicate:

The Biden administration claims that this spending will dramatically spur growth, raising employment and incomes. The reasoning is that because government borrowing rates are low and below output growth, deficit financing amounts to a free lunch (which makes one wonder about the real motive for the tax hikes).

But this argument is nonsensical four times over. First, as Valerie Ramey of the University of California, San Diego and Edward Glaeser of Harvard University each note, infrastructure spending does not make for good short-run economic stimulus. Planning and approvals take time, and construction is often plagued by delays and budget overruns. As Obama himself admitted in 2010, “there’s no such thing as shovel-ready projects.” The New Deal did not end the Great Depression, nor did Japan’s massive ongoing infrastructure expenditures spare it from its “lost decades.” Most of the unemployed do not have the skills or experience to operate giant excavators and tower cranes.

Second, large public infrastructure projects (highways, bridges, dams, ports, and major repairs) are designed to last many decades, which will pose problems when interest rates on government debt eventually rise. The Congressional Budget Office estimates that by 2051, the ten-year Treasury rate will triple, and the federal government’s interest costs will sextuple, exceeding even rapidly growing spending on Social Security, and dwarfing all discretionary spending, including on defense.

Third, the economy is recovering rapidly from the pandemic and is projected to reach its output potential without additional spending. The accelerating vaccine rollout on its own will allow for a return to in-person schooling, dining, and shopping, as well as travel, which will sharply reduce unemployment in the sectors hit hardest by the pandemic. As such, a recent analysis from the respected Penn Wharton Budget Model finds that the package will actually shrink the economy over time, because of the harm from its tax hikes.

So, if infrastructure spending is not efficient economic stimulus, the period over which new infrastructure will need to be maintained far exceeds the period over which it will be funded, and it will cause spending on interest to increase to painful levels, and it may actually cause the economy to contract, why do it? I think there is one certain explanation and one possible explanation.

The certain explanation is that President Biden feels a significant need to do something. The possible explanation is that the boondoggles are the point. One is certainly tempted to speculate along those lines.

“Boondoggle” is an interesting word. It’s been around for at least a century but, perhaps not coincidentally, it came into common usage during the New Deal.