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Government Hired a Firm for $13.6M to Hire Recruits. It Hired 2

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161–170 of 213 posts

Re: Government Hired a Firm for $13.6M to Hire Recruits. It Hired 2

#161
post #8

“There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can…

“Teldar Paper has 33 different vice presidents each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can't figure it out. One thing I do know is that our paper company lost 110 million dollars last year, and I'll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents. The new law of evolution in corporate America seems to be survival of the unfittest... The point is, ladies and gentlemen, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms: greed for life, for money, for love, knowledge, has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.”

-Gordon Gekko

Re: Government Hired a Firm for $13.6M to Hire Recruits. It Hired 2

#162
post #102

Earlier quoted context omitted.

An alternative would be a country full of people so similar to you that the average person would feel like their countrymen might as well be them. If the entire US was 100% aligned with your own politics then taxes wouldn't be very burdensome. If my political faction ran the country like a dictatorship, I wouldn't mind them taking my money, because they'd spend it on getting me what I want (which may include "a bette…

> "An alternative would be a country full of people so similar to you that the average person would feel like their countrymen might as well be them." What? If people really felt that way there would be no need for taxes. If you have a lack of self-interest (or the sense of "self" is altered to refer to the group) you would freely give money to each other. The only time taxes are required is when people will not free…

> "The only time taxes are required is when people will not freely give money for a project. That is literally the only reason taxes exist. Nothing is stopping people from donating to the government."

This really sounds true, but it disregards game theory. For concreteness, let's say the government proposes to upgrade a waste processing plant for $500 million, and you think it's a pretty good idea. There are varying levels of being willing to "freely give money":

1. You are willing to personally pay for the waste processing plant out of your own pocket. You happen to have $500 million, and regardless of what anyone else in the country thinks, you think the waste processing upgrade is badly needed and you're willing to devote your entire personal fortune to it. Maybe the waste processing plant will be named after you.

2. You are willing to pay for it, but only if your fellow citizens also pitch in. The waste processing plant serves 5 million people in the area. You aren't willing to personally pay $500 million, but you are willing to enter a contract with your 5 million fellows that you'll all pay $100 each.

3. You would be willing to join a pact to pay for it, but not if you can easily get away with being a free rider, where the plant gets built without your support. If a generous billionaire will personally donate to the government to pay for the entire thing, then why should you pay anything? Or, if 1 million of your fellow citizens will happily pay $500 each, then why should you pay anything? But that's not to say you don't think the plant is worth the money. You'd even be willing to pay for it if there were no other way to get it built. You'd just prefer not to waste your own money on it if the plant gets built even when you opt out of the payment contract.

Unfortunately, the common mentality of option (3) usually prevents options (1) and (2) from being feasible, because anyone who doesn't agree to pay still gets the benefit of the plant upgrades. Option (1) can still work for very prestigious projects that make a good legacy-building donation, but probably not waste processing plant upgrades. The free rider problem prevents almost anyone from voluntarily forming a pact to share the cost burden even when the plant upgrades are direly needed.

Fortunately there is a fourth option.

4. You would be willing to pay for it conditional on your fellow citizens fairly sharing the bill. Thus you support entering a mutually-binding pact which will also bind any potential free riders in the municipality who also benefit from the waste processing plant. The pact takes force as long as the motion to upgrade the waste processing plant wins majority support. In order for this kind of pact to be possible, you all (even the free riders) voluntarily agree ahead of time to support the legally-binding force of these kinds of pacts, and the conditions under which the majority will be determined. In other words, you choose to live under a democratic government.

Of course there's also a fifth option:

5. You don't think the waste processing plant needs upgrades, and you don't support yourself or anyone else paying for it.

I often hear from Americans that taxation equates to theft, or slavery, or being held at gunpoint to pay for other peoples' things. But this naively assumes that anyone who doesn't have opinion (1) must have opinion (5). In fact, I think the vast majority of people have opinion (4), because it's the Nash equilibrium for people who support a public works project, but I never hear opponents of taxation even talk about the existence of opinion (4).

Perhaps they haven't imagined that someone would be unwilling to donate $100 to the government, but be enthusiastically willing to have that same $100 forcibly taken from them (as long as it's also taken from their fellows)? I certainly am. That's why I vote to raise taxes even though I wouldn't donate to the government.

Re: Government Hired a Firm for $13.6M to Hire Recruits. It Hired 2

#163
post #8

“There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can…

I personally enjoyed this quote from Ken Burns' Civil War.

"You can sell anything to the government at almost any price you've got the guts to ask".

                             -- Jim Fisk ( War Profiteer )

Re: Government Hired a Firm for $13.6M to Hire Recruits. It Hired 2

#164
post #45

Earlier quoted context omitted.

The mess the US foreign policy of the previous administration caused in Middle East alone ( not counting Ukraine and Libya ) has an immense cost and no real benefit. Of course others are left alone to pay the bill. I would call that a total failure by any possible interpretation.

What is the US supposed to do? You literally cited two cases, Ukraine and Libya, which are polar opposites. Ukraine the US is criticized for NOT intervening, middle east and Libya US is criticized FOR intervening. And now we have Myanmar muslim situation and Yemen where people are begging for US intervention, but in all probability if we intervened we would be getting criticized for it by the same people asking us to…

The US is intervening in Yemen; without our support for the Saudis incinerating people there, there wouldn't be a war.

We also certainly intervened in Ukraine by fomenting a coup there. Rolling tanks there would probably be WW-3.

None of these interventions has made life better for anyone other than the evil ding dongs at Brookings and in the Pentagon.

Re: Government Hired a Firm for $13.6M to Hire Recruits. It Hired 2

#165
post #150
post #144

Earlier quoted context omitted.

The distinction I am going for is people who would donate if and only if their donation makes a difference to project completion. If you can save your 100$ and still get what you want then that’s different than your 100$ being what allows something to happen. My 100$ is not going to cure cancer so I don’t donate to cancer research. But, if I knew it would make the difference between a cure and no cure, then I would v…

> "The distinction I am going for is people who would donate if and only if their donation makes a difference to project completion. If you can save your 100$ and still get what you want then that’s different than your 100$ being what allows something to happen." So you claim people won't voluntarily fund a project like a wastewater treatment plant since it doesn't make them feel rewarded or some other mental thing.…

Cancer research is only one example, a new road also requires a minimum amount of money. Many people would happily pay for their chunk of a new road/bridge if it made the difference between having it and not because the cost is less than the utility. But, you don’t see charities to build roads because that model does not work in that context.

As to efficiency that’s not really relevant. What I pay to see a movie is divorced from what it takes to make the movie. All I care about is the utility.

Re: Government Hired a Firm for $13.6M to Hire Recruits. It Hired 2

#166
post #110

Earlier quoted context omitted.

Iceland has no military spending Ireland spends 0.4% of it's GDP on military Switzerland 0.7% Sweden 1% Finland (who have actually been invaded in living memory) 1.4% The U.S. spent $574b on defence and $79b on veterans last year, both increased way above inflation - total of $57b. Education by comparision dropped by 14%, or $9b. Health by 18% or $15b. The largest slice of the U.S. budget is healthcare (mainly medica…

You get to have that system because the US has taken on the role of global police and funds our military at a level commensurate to that role. If you funded your military appropriately, we wouldn't have to fund your defense. Your comment about healthcare is so simplistic it's not even worth a reply, but I'll simply note that the vast majority are not on medicare or medicaid and are covered by private insurance. Your…

The US spends $10200 a year per head on healthcare, most of it ($8k a year) government or compulsory spending.

Canada spends $4800 a year on healthcare in total -- under half that of the U.S. Israel spends $2800.

That's a sign of a broken system.

Use Canada's system, cut your mediacare/aid tax, and your companies no longer need to spend money on healthcare when employing them. Using Canada's system removes the tax on jobs that the U.S. loves so much.

> You get to have that system because the US has taken on the role of global police

Why? Who benefitted from invading Iraq? Who benefits from a dozen different aircraft carrier groups around the world?

Re: Government Hired a Firm for $13.6M to Hire Recruits. It Hired 2

#167
post #8

“There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can…

> ... if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get.

what about when you're spending your parents' money on a cell phone for them?

Re: Government Hired a Firm for $13.6M to Hire Recruits. It Hired 2

#168
post #128

Earlier quoted context omitted.

The problem with American opposition to government, especially Federal government, is that it's inextricable from the outcomes of the civil war.

So we should mitigate the problem by making more of the stuff government does happen at the state level instead of the federal level. There's no inherent reason something like healthcare or net neutrality needs to be done nationally.

50 different rule books for 50 different locations of doing business sounds like an inherent reason.

Re: Government Hired a Firm for $13.6M to Hire Recruits. It Hired 2

#169

Earlier quoted context omitted.

That's why many mature governments have an office whose job it is to care about those things, e.g. [1]. [1] https://en.wikipedia.org/wiki/Government_Accountability_Offi...

True, but you're not taking into account the government budgeting model. Organizations in government budgets' are based on last year's budget. If the OU spends last year's budget or more, their budget is increased (because they account for inflation). If they spend less, their budget is decreased. In other words, there is a built in incentive to spend money, and anyone can find ways to justify spending money "to impr…

Large corporations stuff from this problem too, with middle managers maxing their budgets out on mousepads or whatever to make sure their departments budget doesn't get cut. Its just that their better at hiding it.

It's a very pervasive problem; I'm sure whoever figures out a finance structure that minimizes it without breaking anything else will win a novel prize

Re: Government Hired a Firm for $13.6M to Hire Recruits. It Hired 2

#170
post #8

“There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money. Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost. Then, I can…

I'm not sure what it says about me or Friedman, but if I'm choosing to buy someone a gift I don't care about the cost but I will attempt to make it something they like, and refrain from gift-giving if I don't think I can do that. (Or give money, I suppose.) On the other hand, when spending other people's money on myself, for example lunches for business travel, I am incredibly cost conscious. I've skipped dinner a co…

MF's classifications appear to not be universal. People do exist that are more careful with other people's money than with their own, because they feel empathy and/or wish to cultivate a professional reputation. I imagine such people would be very sought after and highly paid as fiduciaries and managers.

I too have been frugal with an expense account, but that may have been more out of a general mistrust of the employer, who might not reimburse in a timely and convenient fashion, rather than out of concern for their financial well-being. If my brother-in-law were to offer my entire family dinner, on him, at a restaurant of our choice, we would be eating at a strip-mall taqueria, for less than at McDonald's; whereas if my parents are buying, it's gonna be sushi, with a bunch of the fancy rolls. I know what they can each afford. Also, when I am shopping, I take it personal when I feel like I am getting ripped off, even if I am buying on behalf of someone else. If buying is a game, I want to win it.

For instance, I am super pissed about the F-35. I don't fly it, build it, maintain it, develop for it, see it, or even hear it. But it seems like maybe the government spent at least 5 times as much on it as it should have. Same with Boston's Big Dig. I don't live there or drive through it, but we all got ripped off on that one. That deal where Chicago sold its public parking meters and the Skyway Bridge? Pissed. People who don't care about other people's money when they spend it should not be allowed to spend other people's money. But there is way too much money that needs to be spent, and not enough conscientious spenders to do all of it. Thus, we end up with the yahoos that allow other people to be ripped off.

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