As the Governing Scam Turns

I’ve found the ProCAP matter to highlight a thoroughly depressing fact of the modern civic arrangement, and it came to a point when Russ stated the following, in a comment to one of Andrew’s recent posts:

If providing a bridge loan is cheaper than taking over the functions that would be lost if PROCAP goes under, it’s money well spent. If not, it isn’t. Why is that so confusing?
I’m also not sure why you’d think it a concern for the city if PROCAP pays back loans with money from federal or other grants.

To the extent that such argumentation sounds reasonable, it emphasizes the approach to government spending that is leading to the downfall of the West. The objective is to find the cheapest way to provide each function, with the list growing every year (as with the state and federal foray into preschool), not to determine what functions government must cease to provide because there is no money.
That ProCAP operates with “federal or other grants” does not help the situation, because government is funded with money taken out of the economy across the board, and it is broke at every level. Here we have a collapsing quasi-public agency receiving a loan from a city in deficit, with both receiving payments from a state that must annually paper over its own fiscal gaps and a federal government in debt beyond imagining.
Mark Steyn’s column in the most recent National Review describes the scheme on the international level:

Oh, by the way, the IMF itself has spent most of the last few years operating with a $400 million budget deficit. So a broke G7 economy [Italy] is being bailed out by a broke transnational organization funded by a broke hyperpower. That seems likely to work.

Government finance has become a giant shell game in which there is no ball to find. Starting from the premise that this or that must be funded through public dollars, the plan is simply to assume that the money will come from somewhere. Miracles and breakthroughs are always possible, but the safe bet is that hard times are coming.

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Monique
Editor
9 years ago

” to determine what functions government must cease to provide because there is no money.”
The list of functions provided has only ever lengthened. One way to accomplish the above, then, is to do a “system restore” with the budget, choosing a fiscal year point of, say, five years ago when expenditures were more in line with the revenue stream of today.

Russ
Russ
9 years ago

The objective is to find the cheapest way to provide each function, with the list growing every year (as with the state and federal foray into preschool), not to determine what functions government must cease to provide because there is no money.

Ah, the difference being I live on the south side of Providence and know very well that the functions ProCap provides are necessary and essential. Not to mention that the organization works with
It’s quite a bit easier to blithely state without justification how the services provided to the seniors, children, the infirm, and the working poor aren’t necessary and should be eliminated when they are faceless people you’ve never met.
Quite the blog post for this time of year. Bah, humbug, eh?

Russ
Russ
9 years ago

Oops, was going to mention that they work with RI Community Food Bank.

Dan
Dan
9 years ago

There are a number of important economic principles that would-be central planner progressives like Russ fail to consider when making these kinds of simplistic public policy recommendations. They generally relate to what Bastiat described as the “seen” and the “unseen.” The progressive analysis tends to end at the “seen,” e.g., if it’s cheaper and saves a program we like, then we should do it. A thoughtful student of economics, by contrast, will ask the more difficult questions about what is “unseen.” What incentive and moral hazard problems might this create? What market effects might this have? Will the program fail again? Where would this money come from, and what are the opportunity costs, i.e., what will be foregone? The responsible answer is often “we don’t know,” a phrase you don’t hear very often in the progressive lexicon. Government as a loaner, investor, subsidizer, or underwriter should always make us wary and question why there are no private entities willing to serve the same function. These aren’t your textbook “tragedy of the commons” or “negative externality” problems that have traditionally been used to justify government intervention. This is something fundamentally different and far larger in scale, and what we are seeing now is that “government failure” can be far worse than what has rightly or wrongly been called “market failure.” There is no doubt that progressives like Russ would have supported Federal Stafford Loans and Pell Grants to subsidize higher education for the less advantaged. To the central planner, it’s a no-brainer. The result today is what was unseen – the response of “non-profit” colleges and universities to carve out this consumer surplus and tuition rates tripling over the past three decades. The “unfortunate” individuals who had difficulty affording college are now doubly unfortunate – it’s still expensive and they now… Read more »

Russ
Russ
9 years ago

Lol! The local community center is Dan’s idea of central planning. Get out of the house a bit more, Dan. You clealy have never spoken with anyone from ProCap or visited any of their locations.

Russ
Russ
9 years ago

Dan, do tell in this Christmas season about the “incentive and moral hazard problems” of following the teachings of Christ by providing food to the poor. I’m truly facinated.

Russ
Russ
9 years ago

“…question why there are no private entities willing to serve the same function.”
Excellent question… why are there no affordable after-school programs for city kids or programs for senior citizens in our communities? Folks like Dan think putting the kids on the streets and leaving our seniors out of site and out of mind is preferrable. On the south side, we know better. (talk about your “moral hazard problems”!)
Me, I say the world would be quite a bit better if people asked those questions. So why doesn’t our society provide these things for our youth and seniors?

Dan
Dan
9 years ago

Russ – Bailing out a bankrupt (and fraudulently mismanaged) social services organization with millions in public funds is a little more involved than a having a “local community center.” Interesting how in advocating for a bailout you describe the services as “essential,” but when cautioned about the dangers of central economic planning, these services are suddenly a trivial and de minimis expense.
Being set firmly in your world of progressive identity politics, it may shock you to learn that not all free market advocates are Christian or even religious. I don’t necessarily follow all of the “teachings of Christ,” although I do believe he was more of a proponent of private charity than supporting the Roman government in setting up a centrally administered welfare state.
The “leaving granny out in the cold” line is just a tired, braindead, recycled progressive meme that has nothing to do with the economics discussion at hand and employs the worst types of fallacies. Suffice it to say that absent a ProCap bailout, senior citizens will not be starving out on the street any more than the Washington Monument will close any time National Parks funding is cut by 1 or more percent.

John
John
9 years ago

Russ:
As we heard so often during the Clinton administration, “It takes a village…” Well, a village is not the federal government, it is the people living in the community who share the responsibility to care for their own, whether through their faith-based organizations or their volunteerism; maybe even through a local enterprise that can make a difference without gouging the people they serve.
The government’s succesful efforts to break down the family structure has left seniors without the expectation that family will provide support through their later years (or worse, they have been brainwahsed by the government to believe that they are suposed to be on their own) and children living in homes with no father and dependent on the state for their monthly “paycheck” and food allotment.

John
John
9 years ago

Russ:
As we heard so often during the Clinton administration, “It takes a village…” Well, a village is not the federal government, it is the people living in the community who share the responsibility to care for their own, whether through their faith-based organizations or their volunteerism; maybe even through a local enterprise that can make a difference without gouging the people they serve.
The government’s succesful efforts to break down the family structure has left seniors without the expectation that family will provide support through their later years (or worse, they have been brainwahsed by the government to believe that they are suposed to be on their own) and children living in homes with no father and dependent on the state for their monthly “paycheck” and food allotment.

Russ
Russ
9 years ago

“I don’t necessarily follow all of the ‘teachings of Christ’…”
No surprise there. Clearly we do have a difference of opinion on the meaning of “moral hazards.”

Dan
Dan
9 years ago

“Clearly we do have a difference of opinion on the meaning of ‘moral hazards.'”
It is a specific economics term regarding the insulation of a party from financial risk, so yes, we probably do have a different understanding of its meaning.
I’ll let my Jewish, Muslim, Buddhist, and Hindu friends know that not following all of Christ’s teachings makes them horrendous people in your progressive opinion. I’m sure it will have profound effects on their outlooks and behaviors.

Russ
Russ
9 years ago

“…a village is not the federal government, it is the people living in the community who share the responsibility to care for their own, whether through their faith-based organizations or their volunteerism…”
Well, John, I hope you and others will take that to heart and volunteer. There are many, many kids and seniors going without basic essentials in our cities this winter. And to be clear, ProCAP is a community organization so I’m not sure they aren’t the type of “local enterprise” you’re envisioning.
You seem to be arguing that nongovernmental nonprofits and faith based organizations should never recieve government funds so there I think we part ways. Certainly corporate interests receive much, much more in government largess. It’s interesting that it’s usually only when those grants benefit the poor that the right cries foul.
For my part, I’m with Paine:

There are, in every country, some magnificent charities established by individuals. It is, however, but little that any individual can do, when the whole extent of the misery to be relieved is considered. He may satisfy his conscience, but not his heart. He may give all that he has, and that all will relieve but little. It is only by organizing civilization upon such principles as to act like a system of pulleys, that the whole weight of misery can be removed.

Russ
Russ
9 years ago

Sheesh, who knew that talking about Christ this week would set some folks off. Merry Chistmas, Dan!

Dan
Dan
9 years ago

“There are many, many kids and seniors going without basic essentials in our cities this winter.”
Really? “Many, many” going without “basic essentials”? How many children and elderly persons starved to death in Rhode Island last year? How many died of exposure?
Care to provide any data or even educated guesses on that topic? Or perhaps you’d care to scale back the completely over-the-top rhetoric a bit?
My grandmother is 90, by the way, and lives with us. She is free to do so for the rest of her life. No government assistance necessary. I’m sure this blows your mind because “a true right winger” would tell her to move out and get a job, right Russ? Isn’t that your favorite caricature?

Patrick
Patrick
9 years ago

Ok, looping back around Russ and Dan part 47,927… Going back to one of Justin’s last lines, with regard to the sentiment of his post: “Government finance has become a giant shell game in which there is no ball to find. Starting from the premise that this or that must be funded through public dollars, the plan is simply to assume that the money will come from somewhere.” That is one of my frustrations and something I posted on here recently. People think that “the government will pay for it” or “we’ll let the Feds pay for it”. Regardless of the government origination, all money comes from the taxpayers, us. “The government” has no money. It has zero. I don’t mean it’s broke, I mean that the only way the government gets money is from the taxpayers. So to figure that we’ll prop up a local agency with federal grants, isn’t that much different than a RI bailout. It’s still taxpayer money. It’s still you and me paying it, regardless of whether it’s “state money” or “federal money”. As to Monique’s statement: “do a “system restore” with the budget, choosing a fiscal year point of, say, five years ago when expenditures were more in line with the revenue stream of today.” No no no no, Monique. Think big! Yeah, for various reasons, Ron Paul will not be the nominee, but he’s clearly on to something with his suggestion to remove five federal departments. I believe the five he named are Energy, Education, Commerce, Interior and HUD. He claims eliminating those will result in an immediate $1 trillion in savings. Anyone know the history of the Energy Department? Remember those long gas lines in the ’70s? It was created as a response to lessen the US’ dependence on foreign oil. How’s… Read more »

Dan
Dan
9 years ago

Theoretically, I agree with the spirit (and substance) of Paul’s statement, but if we want to significantly and realistically cut the size of the Federal government, we don’t have to completely cut five major departments.
Be honest, what percentage of the following Federal agencies have you even heard of? I’m more familiar with the “Administrative State” than most, and I readily admit that I have heard of less than 10-20%.
en.wikipedia.org/wiki/List_of_United_States_federal_agencies
Two years ago, I was offered a position with a DHS agency with the sole duty of shipping and monitoring the use of security X-ray machines abroad. Most of the people working for this agency earn over $100,000 a year. (I did not accept the position.)

Russ
Russ
9 years ago

“How many children and elderly persons starved to death in Rhode Island last year? How many died of exposure?”
Even one of too many, and there are deaths each winter. It’s sad that for some that’s what it would take for them to feel compassion for those with less.

Russ
Russ
9 years ago

Why is it you guys only care about “the taxpayers” when it’s about spending to help our youth, the poor, the elderly, or the infirm? Would that there was half as much attention paid to the trillions wasted on weapons. Clearly the “Defense” Department must be the model of efficiency, right?

Dan
Dan
9 years ago

Russ – Are you incapable of answering a straightforward question like how many children starved and froze to death in Rhode Island last winter, or do you choose not to? If the answer is “0” or “approximately 0”, as I fully believe that it is and is implied by your response, then perhaps you could explain exactly what you meant by “many, many” children in RI going without essentials. I want to help children every bit as much as you do. If you’re going to engage in this “silent holocaust” -type rhetoric, then let’s get into the numbers and figure out what might be done. You should be happy for the opportunity to make your case for more public funding and I am happy to listen.

Patrick
Patrick
9 years ago

“Clearly the “Defense” Department must be the model of efficiency, right?”
Wrong example. I and others have advocated for defense cuts in the hundreds of billions. I believe their budget last year was in the area of $700B. Could cut $200B and still be pretty safe.
NASA and its $20B price tag are a favorite of mine that should also be cut. Sell it to Branson for $1.

Russ
Russ
9 years ago

“I and others have advocated for defense cuts in the hundreds of billions.”
Well, good. That’s somewhere we can agree. Anyone ever write about that stuff over here? (I searched but couldn’t find anything)
No need to post the link. I’ll take your word for it. But is there any question that it’s at least 2 to 1 railing against social spending vs. bloated military expenditures (heck, 10 to 1… 50 to 1)? You can see how that might lead someone like me to think that it’s not taxes but social programs that the right truly wants to reduce.
I just find it curious that decorating a tree draws multiple diaries, but war and wasteful military spending go on and on without comment.

mangeek
mangeek
9 years ago

“You clealy have never spoken with anyone from ProCap or visited any of their locations.”
My girlfriend works for a similar organization. Even she’ll admit that there are HUGE problems with the way these places are funded and operated.
These non-profit grant-consuming organizations tend to operate as providers of crappy jobs instead of social services, they have less incentive to actually ‘do good’ (despite their best intentions) than they do to pull grants and spend money. At the end of the day, they justify their existence not by saying things like ‘we did X with Y’, but ‘we did X, and that’s A Good Thing!’.
Also, if you peel-back the shell, you’ll find that these places are rife with financial corruption and nepotism. My GF applied for a grant to have some energy-saving windows installed (free!) only to find out that her organization had ‘already had them installed’ years before she got the job… The windows at that site are over 50 years old. Someone took the money, allocated it for something else, checked the box in the grant paperwork that said ‘I spent the loot properly’, and nobody ever checked on it. Are you willing to let that sort of thing go?
I’m willing to bet that the fiscal paperwork for these organizations, on average in Rhode Island, has two orders of magnitude more discrepancies than the average foreclosure paperwork in the state.

Russ
Russ
9 years ago

“Are you incapable of answering a straightforward question like how many children starved and froze to death in Rhode Island last winter, or do you choose not to?”
Not sure your point. Yes, I chose not to.
fwiw, I belive something like 8 people died living on the streets in RI last year (note – ProCAP also provides services for treating addiction), and usually I see at least 1 death reported in Providence from exposure. Nationally the number is 700 preventable deaths each year among the homeless from exposure.
Feel free to keep putting a hyperbolic slant on everything. I just said I know the services that ProCAP provides and that they are needed. Exaggerate that statement all you like.

Russ
Russ
9 years ago

“These non-profit grant-consuming organizations tend to operate as providers of crappy jobs instead of social services…”
What! Outsourcing functions that could be provided by the government doesn’t always lead to efficiencies? Say it isn’t so!
“Are you willing to let that sort of thing go?”
No, it’s totally outrageous, perhaps criminal. What I’m for are things like keeping food pantries and the Elmwood Community Center open (next Dan will tell me kids in Elmwood don’t die on the streets either), etc. Don’t care at all what happens to a single mismanaged organization.

Andrew
Editor
9 years ago

Russ,
Mangeek’s example explains the situation perfectly. At some point, someone has to deliver the windows.
You can do it through system one: Government takes taxpayer money, and puts it under the care of a government bureaucrat, who picks someone to actually deliver the windows.
Or through system two: Government takes taxpayer money, and puts it under the care of a government bureaucrat, who transfers it to a quasi-governmental organization, who puts it under the care of one of its bureaucrats, who picks someone to actually deliver the windows.
The additional layers of bureaucracy and especially the loss of transparency and accountability, do nothing to enhance the delivery of the windows.

Patrick
Patrick
9 years ago

“At some point, someone has to deliver the windows.”
Which is also similar to the way that WIC and EBT abuse could be shut down or slowed down. Instead of giving people money to buy food, give them the food. If the whole point is to make sure people aren’t starving and have the essentials, then give them the essentials.
I’ve heard that method would be inefficient, but would the cost of this inefficiency be more than the cost of whatever level of fraud exists?

Russ
Russ
9 years ago

Hey, I don’t exactly disagree. Some of the worst cases of fraud and abuse in the recent U.S. military occupations have been via NGOs.
But the question for the Taveras administration was what to do right now when we’re at risk of losing necessary services in the short term. Framed that way, there were few (if any) alternatives to providing a bridge loan.

Dan
Dan
9 years ago

I accept that 1 or 2 homeless people will pass out in an intoxicated state and die of exposure each year, not because I don’t care about them as people or because I want them to die, but because there is absolutely nothing that government could do to stop that from happening short of forcibly removing them from the streets, locking them up in a facility, and monitoring them 24 hours a day, and even that would be no guarantee. No church or synagogue with which I am familiar would turn such people away if they were truly seeking help, so you can’t argue that the resources and willingness aren’t there. You simply can’t help people who are unwilling to help themselves, and throwing money at such problems is wasteful and can actually make the problems worse.
Your original statement was that “many, many” children and elderly persons in Rhode Island are living without “essentials,” which most people would interpret as food, shelter, and other things of that nature needed to live. Now that I have challenged this assertion, it’s changed to you lamenting the deaths of a couple of middle-aged homeless people each year who may or may not be mentally ill or drug abusers. Doesn’t quite tug at the heartstrings in the same way, does it? But that’s precisely why you made that original statement – to play on people’s emotions instead of appealing to reason.

mangeek
mangeek
9 years ago

Patrick, you actually bring up a good point…
I’m a believer that we definitely need strong social services to prevent starvation/freezing, but I also actually LIKE the idea of ‘taking dignity’ from people who are relying on those services. I’ve seen them abused by too many people.
So here are some ideas:
* Reallocate a big portion of food stamps towards vouchers that are worth double when purchasing from farmers’ markets or for produce, single when used at supermarkets, and cannot be used for ‘corporate junk food’ at all. Use biometrics to prevent fraud.
* Install radio-controlled programmable thermostats for people who get heating assistance. Limit the temperature setting to 62F while they’re on assistance. I GUARANTEE the $60 installation cost would pay itself off, on average, in two months.
I want a benevolent government that covers the bare-bones for everyone, but I want people to be ashamed to be dependent on it.

Russ
Russ
9 years ago

Sheesh, you’re the one that kept harping on the homeless issue. You insisted that I answer. I answered.
And it was you who claimed that we should only care about hungry children when they reach starvation levels of malnutrition. I have no doubt that what I said is accurate.
http://www.eastbayri.com/news/2011/dec/01/local-food-pantries-swamped/

Dan
Dan
9 years ago

Ok, so now it’s not that they lack “essentials,” it is that they might not be living comfortably. I appreciate the retraction and I can agree with that much.
I never said what you claim I said, or anything even resembling it, but everyone here expects that kind of distortion from you at this point.

Russ
Russ
9 years ago

Actually I said providing food to the hungry, shelter to the displaced, and heat to those who would otherwise have none are “nessessary and essential services.” You oddly take offense to that. Fair enough.

Justin Katz
Justin Katz
9 years ago

Russ,
I can think of no worse outcome for the poor and otherwise disadvantaged than for their cities, states, and nation to collapse under the weight of irresponsible and over-reaching government social management. You’ll disagree with me whether that’s a proximate possibility, but at the very least it can be said that it isn’t contrary to Christian morality to worry about the possibility… even during Christmas season.
Be that as it may, I can state with near certainty that charitable activities would derive much more from me individually if (1) I didn’t have to struggle so to get by (a reality for which I give public policy partial blame) and (2) government weren’t so large, inefficient, and corrupt that I feel that I can do the most good by addressing that particular problem.

joe bernstein
joe bernstein
9 years ago

Here’s a thought-PROCAP in and of itself provides necessary services.
Don’t throw the baby out with the bathwater.
Years of complacency and a ho-hum attitude that all is just fine is what led to this.One person statyed at the helm with apparently little or no oversight from a “board of directors”that apparently had their collective thumbs up their asses.
They liked the title but avoided the detailed work necessary to assure compliance with standards and ethics.
Corbishley got to run a nice little fiefdom.This kind of thing is the anathema of good public administration in any field.
Due to the sh*t economy,many landlords got foreclosed on-the tenants who may have been faithfully paying rent got screwed through exactly no fault of their own-some wound up homeless or paying more than they could really afford,so they don’t fit the mold of lifetime dependent people,but they are up against it now.It would be a bad time to stop asssistance given those circumstances.
the bridge lon might work out ok if REAL oversight is finally put into effect.

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