Showing posts with label budget. Show all posts
Showing posts with label budget. Show all posts

Thursday, April 28, 2011

A Dune Sea of red ink

If you haven't read this discussion on the economics of using the Death Star to destroy a planet, you really, really ought to. The writers have some very useful insights on why destroying Alderaan might make sense as a warning to other systems, even if it was costly in the short run. (Ever wonder why the Rebels were holed up on Hoth in Episode V? Because all the decent planet were too scared to give them shelter post-Alderaan.)

But there's a bigger issue here that I think needs addressing. Where did Palpatine get all the money? He apparently authorized the creation of the Clone Army (and all of its equipment, including some very large and costly star destroyers) before he was even emperor. And neither the Senate nor the Jedi Council knew about these expenditures until the clones just showed up. Surely the cloners wanted to see some kind of money up front.

On top of that, by the end of the Clone War, Palpatine's begun construction of a Death Star, something that is estimated to cost $15 septillion (although I think could be purchased for a few quintillion). Sure, it's far from completed, but he still would have had to purchased the raw materials, hired the laborers, etc. And we still see no sign that the Senate or the Council knew anything about it. (Remember how shocked Obi Wan was to learn of its existence in Episode IV?) Where did this money come from?

Frankly, it's amazing the Republic lasted as long as it did with such horrible budgetary oversight.


Update: Good point from David Bernstein that a vibrant media (all but invisible in Lucas' movies) would have shed light on this scandal early on. Similarly, the Trade Federation's denial of their invasion of Naboo in Episode I would have found fewer adherents had there been a single news crew there.

Monday, April 11, 2011

Comparing Shutdowns

I haven't seen a whole lot of ink comparing the results of the 1995-96 government shutdown with those of last week's almost-shutdown, so I sought out the opinions of Jonathan Bernstein, Sarah Binder, and Peter Hanson. The following are some reflections, informed by their input, on two key questions I keep asking:

Why was Obama apparently so eager to make a deal?
The conventional about the 1995-96 shutdown is that the event helped Bill Clinton and hurt congressional Republicans. We can certainly understand the logic of that: the president has the bully pulpit, he is a single voice facing off against numerous congressional leaders who don't always agree, he was defending popular programs, etc. And yes, the Republicans made a number of policy concessions to Clinton to end the shutdown. And Hanson tells me that veteran Republicans staffers on Capitol Hill widely regard the 1995-96 shutdown as a colossal screwup on their part. So why wouldn't Obama see a shutdown as his best friend? Why didn't he say, like Josiah Bartlett, "Shut it down."?

Well, part of the answer is that the shutdown didn't necessarily help Clinton as much as is generally believed. As John Sides shows, Clinton's approval ratings dropped during the shutdown and did not improve until roughly two months after it ended. Maybe that later rise was the result of the public processing the details of the shutdown, or maybe it had nothing to do with the shutdown at all. Obama can read polls and might be aware of this.

Second, John Boehner is no Newt Gingrich. To the extent the earlier shutdown was considered a Clinton win, that may have been entirely the result of Newt's antics, in which he whined about his seating assignment on Air Force One on the way to Yitzhak Rabin's funeral and wore unforgivably awful sweaters. While I don't envy Boehner's position, he certainly has more discipline as a politician and seems to be a better negotiator than Newt.

Third, the economy in the winter of 1995 was on surer footing than that of spring 2011. A multi-week shutdown now could have a much bigger impact on economic growth next year than $40 billion or so in budget cuts. Obama understands the relationship between economic growth and presidential vote shares and took this seriously.

Fourth, somewhat surprisingly, Obama does not seem impressed with the power of his own oratory. As with the tax cut deal late last year, Obama eschewed bully pulpit tactics and engaged in a ton of inside negotiations with congressional Republicans. (Bill Clinton, conversely, was happy to demonize Republicans publicly while still negotiating more privately, presumably to "go public" and enhance his negotiating hand.) Why is Obama, of all people, not using the bully pulpit? Well, it might be because he knows how to read a poll and understands that going public doesn't necessarily work in such a simplistic fashion. We have a lot of beliefs about how the president can change the public's mind and thus force Congress to do what he wants, but it's hard to point to many examples of this actually happening. Speeches, as Obama will surely tell you, can inspire people to service, encourage them to vote, rally your base, and many other things. But can they actually change your mind? Can they change the mind of a member of Congress? Not often.

Did Obama get more or less than Bill Clinton did?
This is really hard to answer. In some sense, they had similar outcomes from their respective moments of budgetary brinksmanship: they accepted certain levels of spending cuts while still protecting key priorities (Medicare in Clinton's case, health reform funding in Obama's, etc.) and kept most policy riders off the budget bills. We still don't know the entirety of the deal Obama struck, and it hasn't been approved by all the key people yet, so it's hard to assess everything. It's also worth restating that the 1995-96 shutdown did not have much of an effect on Clinton's approval rating, and while he may have been publicly labeled the "winner" of that round, within a year he would sign welfare reform and adopt deficit elimination as a goal, both of which were Republican priorities at the time.

One key difference is that Republicans emerged from the 1995-96 showdown terrified of another one. That strengthened Clinton's hand in future budget negotiations. This doesn't seem to be the case this time around, although it's still early. Republicans could again threaten a shutdown and just keep using it as a negotiating tactic. Perhaps actually having a shutdown would force them to reconsider that strategy, but it's difficult to know how that would affect them.

Wednesday, April 6, 2011

Reflections of a non-essential employee

I was working in the White House Correspondence Office during the budget shutdown of 1995. Here's what I remember:

  • The executive branch had a pretty strict definition of the term "non-essential personnel." As I recall, pretty much everyone below the level of deputy assistant to the president was sent home. We weren't allowed to work, even for free. (Something about the 13th amendment.) They wouldn't let us in the doors. Interns, however, could still show up, and were given unprecedented access to senior staff. Among these interns was one Miss Lewinsky....
  • The Congress got to make its own determination about which employees were essential. I had several friends who were legislative aides on Capitol Hill, and they continued to work throughout the shutdown.
  • I got to spend roughly a month at home, mostly reading, following the news (it was an eventful time, with the shutdown and Rabin's assassination), and catching up on my coursework for the night classes I was taking at GW. I wore sweatshirts every day and shaved infrequently. We were not getting paid at this time, although we were hopeful that we would eventually get back pay. (We did, but the uncertainty put a damper on my holiday spending.)
  • Society managed to function -- we still had a postal service, a military, police, hospitals, Social Security, etc. We could not use national park facilities. We could not go to museums. We could not tour federal buildings or memorials. It was not a very fun time in the District of Columbia, but it wasn't exactly 1991 Sarajevo, either.
I'm sort of curious how things would be different today. With the rise of e-government, a lot more governing functions (research, tax filing, benefit applications, etc.) can be done without employees, at least in the short term. I'm assuming those servers would continue to function. Also, John Boehner strikes me as a lot less prone to temper tantrums and bad sweaters than Newt Gingrich was, so maybe the Republicans would have a somewhat easier time controlling the news cycle than they did in 1995. Still, I think the public would end up siding with the president on this one.

Wednesday, March 3, 2010

Majority rule breaking out all over

New California Assembly Speaker John PĂ©rez is seeking to change the state's constitution to allow budgets to pass with a simple majority vote.  Supermajority budget passage rules are far from the state's only problem, but they're a big one.  Good luck, Mr. Speaker.