David Boaz

From the Washington Post:

Former Comverse Technology chief executive Jacob “Kobi” Alexander was declared a fugitive by the FBI, which issued an alert calling for his arrest. An international manhunt was launched late last month, shortly before authorities unsealed a criminal complaint.

Speaking of my claim yesterday that “people spend other people’s money far less efficiently than their own,” this just in from the Associated Press:

The federal program that provides legal help to poor Americans turns away half of its applicants for lack of resources. But that hasn’t stopped its executives from lavishing expensive meals, chauffeur-driven cars and foreign trips on themselves.

Agency documents obtained by The Associated Press detail the luxuries that executives of the Legal Services Corp. have given themselves with federal money — from $14 “Death by Chocolate” desserts to $400 chauffeured rides to locations within cab distance of their offices.

The government-funded corporation also has a spacious headquarters in Washington’s tony Georgetown district — with views of the Potomac River and a rent significantly higher than other tenants in the same building.

Chuck Grassley, chairman of the Senate Finance Committee, is upset. Maybe at last he can turn his attention from oversight of private charities and universities to his actual job, oversight of federal spending.

A big story on the front page of the Washington Post Style section is illustrated with a beautiful, stylized photo of new CBS anchor Katie Couric. In tiny letters almost invisible to the naked eye, the photo source is identified as CBS. In other words, it’s a publicity photo, not a news photo. There’s another glamorous CBS photo dominating page 8, where the story jumps.

Would the Post print a corporate news release? Not likely, though smaller papers do. Is that different from using a corporate photo? Perhaps. Should the Federal Newspaper Commission look into the use of corporate photos and corporate news releases? Oh, right, we don’t have a Federal Newspaper Commission, because we have a First Amendment.

Why, then, is something called the Federal Communications Commission investigating the use of “video news releases” by television broadcasters (as reported on the front page of the Business section the same day)? Oh, right, because somehow the First Amendment doesn’t give broadcasters the same free speech rights that newspapers enjoy. Prodded by the anti-free-speech lobby Center for Media and Democracy, the FCC wants to know if broadcasters clearly label “video news releases” produced by corporations when they are used on local news programs. CMD is well within its rights to criticize the use of VNRs. But when it calls for government regulation of what can and must be shown on news broadcasts, it’s calling for censorship. And censorship is far worse than “fake news” about new products on local television broadcasts.

Pathological liar Robert Reich offers a commentary on Wednesday morning’s “Marketplace Radio” (not posted yet) complaining that American companies are not lobbying for more spending on science and math education because they are unpatriotically opening labs and software design offices in India and China. So let’s see . . . he’s upset that the people of the world’s two largest countries are finally entering the modern world, and he’s upset that huge American businesses are not lobbying for more business subsidies. What a great liberal!

A New York Times columnist says it may be a mistake to try “to make government run more like a business.” Citing research by Matthias Benz and Bruno S. Frey, summarized by Larry Yu, the Times says that government works better than the private sector:

The authority over government is split among the branches of government. In business, Mr. Yu writes, “even if directors have stepped up their governance in recent years, institutional norms still stack the deck in favor of C.E.O.’s.”

And while chief executives and directors can serve forever, politicians need to face re-election regularly.

When it comes to corporate governance, maybe there is something to be learned from governments.

Well, let’s see. According to a Booz Allen study, dismissals of corporate CEOs have risen sharply in the past decade. Among the world’s 2,500 largest public companies, “CEOs are as likely to leave prematurely as to retire normally. Continuing a pattern from 2004, in 2005 nearly half of all CEO departures were due to poor performance or mergers.”

Meanwhile, almost no members of Congress are removed from office involuntarily. As this chart shows, House reelection rates are approaching 100 percent.

Does that mean that the U.S. government is performing so much better than the average company that there’s no need for change? It seems unlikely that even the Times columnist would make that claim. No, if you read the links above from Booz Allen and the Washington Monthly, you can see some of the differences between politics and business: Business is competitive, to begin with. There are 2,500 large companies in the survey, all competing with one another and with millions of upstart challengers. If Sears and K-Mart don’t stay on their toes, Target and Wal-Mart will take their business. Wikipedia lists pages and pages of defunct companies, all of which failed to satisfy customers. Executives lost their jobs, and shareholders lost their money, and those realities are a powerful incentive to executives and shareholders of other companies. Corporate boards are getting more aggressive, and different companies are testing different rules for governance — outsider CEOs, separating the jobs of CEO and chairman, acquisitions, divestitures, going public, going private — in an attempt to find the rules that will produce the greatest customer satisfaction and thus the greatest profits.

Contrast that with government. Failed bureaucrats are almost never fired; indeed, the standard response to bureaucratic failure is to appropriate more money for the agency. Gerrymandering, campaign finance restrictions, and taxpayer-funded constituent service and propaganda make it almost impossible for a member of Congress to be turned out of office. People spend other people’s money far less efficiently than their own.

I think the Times got it backwards. It would be more appropriate to say, “When it comes to government, maybe there is something to be learned from corporate governance” — such as the value of decentralization and competition, retirement ages or term limits, and real penalties for poor performance. Since those factors are unlikely to occur in political systems, the best lesson is to keep as much of life as possible in the private sector.

When the Education Department was created in 1979, many critics warned that a secretary of education would turn into a national minister of education. Rep. John Erlenborn (R-Ill.), for instance, wrote,

There would be interference in textbook choices, curricula, staffing, salaries, the make-up of student bodies, building designs, and all other irritants that the government has invented to harass the population. These decisions which are now made in the local school or school district will slowly but surely be transferred to Washington.

Dissenting from the committee report that recommended establishing the department, Erlenborn and seven other Republicans wrote, “The Department of Education will end up being the Nation’s super schoolboard. That is something we can all do without.”

That’s why Ronald Reagan promised to abolish Jimmy Carter’s Department of Education in his 1980 campaign. And why House Budget Committee chairman John Kasich put abolition of the department in his budget proposal after the 1994 GOP takeover of Congress.

But things changed. Instead of eliminating or at least reducing federal intervention in local schools, Republicans in 2001 decided to dramatically escalate it with the No Child Left Behind Act. And now Jeb Bush, whom some conservatives call the best governor in the country, writes in the Washington Post (along with Michael Bloomberg) that we should strengthen NCLB. Make it tougher, they write, with real standards and real enforcement. Create data systems to “track” every student. Create federal standards for teachers.

If there’s an earthquake this week, it may be caused by Madison, Taft, Goldwater, and Reagan turning over in their graves. Imagine it: the leading conservative governor in America, considered a pioneer in education reform, wants the distant federal government to come into his state’s schools and impose tougher rules and regulations. And even the Wall Street Journal’s redoubtable editorial page deplores “rampant noncompliance” with federal mandates and “lax enforcement” by Big Brother in Washington.

In its new issue, American Conservative magazines asks two dozen leading intellectuals “What is left? What is right? Does it matter?” Not if leading conservatives have made their peace with federal control of local schools–and are demanding that the feds crack down on the locals.

The Associated Press states as fact that Sen. Lincoln “Chafee is a fiscal conservative.” OK, let’s go to the tape.

According to the National Taxpayers Union, Chafee voted to restrain taxes and spending only 33 percent of the time in 2005. He introduced 43 bills to raise spending and only two to cut spending. He voted against Medicaid cuts. He voted not to allow a cap on spending increases. He voted to increase spending on community development block grants, low-income heating assistance, education, and a package of welfare programs.

What is the AP’s definition of a fiscal conservative?

NPR reporter Luke Burbank, guest-hosting “Wait Wait . . . Don’t Tell Me,” mocked Sen. Joe Lieberman’s decision to run for re-election as an independent after losing the Democratic primary. Burbank ridiculed Lieberman, saying that “nothing, not poor poll numbers, not scorn from his party, not losing the damn primary, could stop him from running for Senate . . . selflessly ignoring the will of the people. . . . If [the independent campaign] doesn’t work, he’s planning a bloodless coup of the Bridgeport High School PTA.”

OK, that’s a fair point. But I was trying to think of how NPR might have treated other candidates who lost an election and wouldn’t take “no” for an answer. One example was Rep. John B. Anderson (R-Ill.), who ran for the Republican presidential nomination. After losing every primary, he filed to run as an Independent. Nexis doesn’t include any NPR transcripts from 1980, but the general reaction of the mainstream media was to celebrate Anderson’s courage and independence in standing up to the extreme conservative Republican primary voters who gave the nomination to Ronald Reagan. That same year, liberal Republican Sen. Jacob Javits (R-N.Y.) lost his primary to Alfonse D’Amato and went on to run as the Liberal Party nominee. Again, the media reaction was sympathetic.

But then I remembered a more recent example of a political candidate who wouldn’t give up, even after winning the election: Joe Lieberman in 2000, along with running mate Al Gore. So Lieberman may be the first candidate in American history to refuse to accept losing an election twice.

Do they still sell those “Sore Loserman” shirts?

Here’s an idea for the cash-strapped Louisiana Democratic Party: for next year’s Jefferson-Jackson Day dinner, instead of paying big bucks for first-class air travel and hotel rooms for some national party poohbah, why not have the dinner feature Rep. William Jefferson, currently the target of an FBI investigation, and businessman Vernon L. Jackson, who has pleaded guilty to bribing Jefferson?

The often astute Washington Post columnist Steven Pearlstein writes that Rep. Benjamin Cardin (D-MD), a candidate for the Senate, is “a budget-balancing fiscal conservative.”

Well. According to the National Taxpayers Union, Cardin voted 13 percent of the time to restrain taxes and spending in 2005, making him slightly more spendthrift than the average Democratic House member. He has introduced 42 bills in this Congress to raise spending, and one bill that would cut spending. It’s true that he has supported some IRS and budget process reforms, but he has not supported a Balanced Budget Amendment to the Constitution.

As I wrote last week, the search for a fiscally conservative Democrat continues.

Meanwhile, a headline in the Post reads:

“President Remains Eager to Cut Entitlement Spending”

Honestly, it’s like reporters are Charlie Brown and Bush is Lucy, pulling the football away time after time. Bush promises to control spending, then increases spending by 48 percent. Bush promises to control spending, then passes a multi-trillion-dollar expansion of Medicare. Bush says, “We need to cut entitlement spending,” and he gets a six-column headline in the Post.