This doesn\’t work as a political policy

The performance of government improves dramatically when the president staffs government agencies with professionals rather than political cronies

Clearly and obviously true.

But you can\’t base a system of governance on the idea that the idiots (from whatever your pserpective is) will never get elected now, can you?

22 thoughts on “This doesn\’t work as a political policy”

  1. What Krugman means, as ever, is that government works best when run by lefties, preferably academic intellectual lefties such as himself. They know what’s best for all of us.

  2. Krugman’s argument seems to be that the government handled Sandy much better than Katrina.

    For those of you with short memories, Katrina was when the State of Louisiana completed screwed up and the like’s of Krugman blamed it all on GWB

  3. It’s a bit like saying that I should receive praise because my beans on toast is far tastier than my Salmon Wellington et jus de petit pois.

  4. Quite a few economists recently have suggested that democracy and responsible management of government finances don’t mix. That wouldn’t be to do with economists wanting to run the show without the hassle of hustings, now would it?

  5. Doesn’t the real empirical evidence show that putting technocrats in positions of power does not always work out for the best? The Chicago boys in Chile might have done ok but the major improvements in the economy seem to have happened since they departed. The “Rogernomics” in New Zealand seem to have been disastrous. And lurking over everything is the example of Julius Nyerere – graduate in Economics and History at Edinburgh University, who left Tanzania as “one of the poorest, least developed, and most foreign aid-dependent countries in the world”

    http://en.wikipedia.org/wiki/Nyerere

  6. Especially not when a lot of economists are raving leftie loons.

    I think there is some milage in the idea that democracy and good fiscal management are somewhat incompatible, certainly in the longer-term. There’s a reason why Friedman persistenly advocated constitutional amendments on spending as the solution.

  7. I note also that Roger Douglas’s credentials were a degree in accountancy – thus inviting parallels with a certain WGCE and retired accountant.

  8. Tripartite separation of powers: legislative, executive, and judiciary. All he’s saying is that we should elect the legislative but not the executive.

    In the UK we elect parliament (legislative) and we get professionals to run the civil service (executive). Admittedly the lines are more blurred, but the principle is reasonable. I’d rather not go down the American route (lampooned in the Simpsons) of having to elect every small town sanitation commissioner.

    Mayors are tricky, because they often combine both legislative and executive.

  9. Neither works.

    If politicians have to reward their coalitions with jobs instead of money, then they will appoint useless people to positions.

    But if civil servants cannot be sacked by anyone, they will be useless too.

    So who can we make civil servants accountable to, if not politicians? The answer is obvious. A monarch! Or shareholders. Civil servants have to be accountable to someone, but democracy is a problem too. Whereas if the owners of the state, the beneficiaries of tax revenue, are formalised as shareholders, then they can appoint competent managers.

    Just as shareholders appoint a CEO, who appoints managers. The CEO pays shareholders their dividends, rather than having to appoint them to “jobs”. Compensation is formal rather than furtive, so it doesn’t have all the unfortunate side-effects of political coalitions.

  10. Alternatively government could be small enough for the corruptions and incompetences to not cause distortions to markets.

  11. In what way was Roger Douglas a technocrat? NZ was the most tightly controled economy in the Western world until Muldoon was removed. I hate to think whey we would have been without those reforms, still with waiting lists for Hillman Avengers I imagine. Unless you where one of the gilded ones with an import licence and state sponsed monopoly, you had to do as you where told right down to how many days you could drive your car.

  12. I reckon Serf is onto something. Katrina hit Louisiana, Sandy hit the north east. Let’s do a thought experiment – which do you think would cope better with being hit by a hurricane, the Netherlands or Sicily?

  13. Part of the problem in the US (and elsewhere) is unrealistic expectations. FEMA comes in after a disaster and takes time to set up and get people working – thats how they are set up.

    Government tell people to leave, tell those staying to stock up (frozen pizza apparently is a favourite, a minor issue in storage and cooking…) on the right stuff. And people choose to ignore the government because its the government. Or choose to stay.
    I hear some people didn’t even know there was a problem on the way until it hit…. government still get the blame of course.
    Regardless, heads will roll and reports will be published and lessons won’t be learnt. Not as if its the first hurricane to hit the Americas.
    Or indeed the first victims – usually in the carribean…

  14. So the USA has an agency called Federal Emergency Management Agency, FEMA for short. Its remit is to co-ordinate the response to disasters which overwhelm local and state authorities.

    GW Bush didn’t like FEMA. He appointed a crony to run it whose working experience was in managing a horse breed registry. The crony’s role was to do nothing, and he was good at it. When Katrina struck and Louisiana couldn’t cope, FEMA was useless.

    Obama has installed competent management, and FEMA’s response to Sandy has been competent.

    A case can be made that FEMA shouldn’t exist: it’s a bad idea for emergency response funding to be entirely separate from emergency precaution funding, because that discourages precautionary spending. But no case at all can be made for having FEMA badly run.

    Luke: I think there’s no chance at all of a hurricane hitting either the Netherlands or Sicily. But since you ask, Sicily would cope much better, because the Netherlands has an average elevation of 11m, and over a quarter of it is below sea level.

  15. Paul B, I’ll accept I may not have chosen the best example, but affluent, well functioning regions tend (my argument) to function better than corrupt, poor ones in the face of natural disasters. That doesn’t excuse the idiot Bush put in charge of FEMA . (And most Sicilians live near the coast, so average elevation is irrelevant.)

  16. Diogenes, I suggest that your comment on the Douglas reforms in NZ are utterly ludicrous. They have been a great success for NZ as an economy and a major issue with them is that they were stopped part way through by a Prime Minister to timid to continue. Thus NZ was left with far too much of the economy in state control.

    The place is small enough so that the state control is not overtly corrupt, but the state control continues to place large sectors under political control so that they change according to the whims of the politicians rather than respond to economic imperatives.

    As a final comment, the residents of places like Staten Island might disagree about the Sandy versus Katrina response.

  17. One common disaster system is to setup in a recoverable area, get it started on recovery, move to another recoverable area, get it started on recovery and so on. With the worst disaster areas left to last.
    They take the most resources, help the least number of people, and delay recovering other areas.
    Brutal but it works.
    Pretty bad for those in the worst areas however.

    Usually simply down to resources. Limited resources, limited manpower, limited supplies – do you help a lot of people who need only a bit of help or concentrate resources on the worst hit to bring them up to a certain level first and ignore the less help needed areas?

  18. @Ed Snack

    This article by John Kay is 12 years old but it suggests to me that Rogenomics had some way to go, after 15 years, befgore being successful:

    http://www.johnkay.com/2000/08/30/downfall-of-an-economic-experiment

    “If ever a country has been run by economists, it is New Zealand. In 1984, the colourful Roger Douglas became Finance Minister. He began the most comprehensive programme of economic reform seen in a developed country.

    According to current orthodoxy, New Zealand has done everything right. The central bank is independent and its governor’s pay is linked to the inflation rate. State industries have been comprehensively restructured and privatised. With none of the regulatory supervision found elsewhere.

    What was one of the world’s most comprehensive welfare states has been dismantled. The Employment Contracts Act insists that conditions of work are a private matter between employer and employee. In surveys of the “economic freedom of the world” New Zealand is ranked with Hong Kong and Singapore, ahead of Britain and the United States, and well ahead of continental Europe.

    After fifteen years, the electorate delivered its own verdict on the reforms by returning an old labour style government, led by Helen Clark. If we look coldly at New Zealand economic data, the voters are right. Since the experiment began, economic growth in New Zealand has been much slower than in the rest of the developed world. Productivity and living standards have barely risen while almost all other rich countries have enjoyed sustained expansion. The past fifteen years have completed New Zealand’s transition into a very select group of states: those that were once rich but are rich no longer. The standard of living has fallen from 1.25 times the average standard of living in high-income countries in 1965 to 0.62 last year. New Zealand is the Argentina of the second half of the twentieth century. What went wrong?”

  19. @ Ed Snack

    and from the wiki page on the New Zealand economy:

    “The New Zealand economy has recently been perceived as successful. However, the generally positive outlook includes some challenges. New Zealand income levels, which used to be above much of Western Europe prior to the deep crisis of the 1970s, have never recovered in relative terms. The New Zealand GDP per capita is for instance less than that of Spain and about 60% that of the United States. Income inequality has increased greatly, implying that significant portions of the population have quite modest incomes”

    http://en.wikipedia.org/wiki/New_Zealand_economy

  20. “What went wrong?”

    New Zealands wealth was built suppling the UK farm products. That was turned off overnight when the UK joined the EC.

    The other half of the question is, what would NZ look like if the reforms had not been made? Would NZRail still have employed tens of thousands just to keep unemployment figures down? Would you only be able to drive a car on even numbered days? Would you still need government apporval to transfer more than $50 overseas?

    And with all those restrictions, would NZ be weathlier or poorer?

  21. See http://faculty-gsb.stanford.edu/mcmillan/personal_page/documents/Managing%20Economic%20Change%201.pdf for another assessment of NZ reforms, arguing they increased productivity, but macroeconomic reforms (eg reducing inflation) were painful, and transition took time.

    The reforms did have their intended effects, therefore, in increasing the economy’s
    technical efficiency. The nation’s valuable stocks of labour, capital, and natural resources were
    better managed than before the reforms. Firms and workers became more productive. Given
    this, why was there not a quick, clear gain in living standards?

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