Should government programs be funded Moneyball-style?

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In the Big Data age, everyone wants to measure things — and see if they can be made to work better. It’s a good impulse in most cases, but is it being applied appropriately to government?

In a new NYT post, David Leonhardt examines trends in testing government programs for quantifiable effectiveness. He notes initially that despite a widespread public suspicion of central government (or any) in this country, the Federal government actually does have a pretty impressive track record in a lot of areas. But it also has come under increasing fire in the past twenty years for being slow to adopt popular private-sector tools for measuring effectiveness of dollars for outcomes.

Of the 11 large programs for low- and moderate-income people that have been subject to rigorous, randomized evaluation, only one or two show strong evidence of improving most beneficiaries’ lives. “Less than 1 percent of government spending is backed by even the most basic evidence of cost-effectiveness,” writes Peter Schuck, a Yale law professor, in his new book, “Why Government Fails So Often,” a sweeping history of policy disappointments.

As Mr. Schuck puts it, “the government has largely ignored the ‘moneyball’ revolution in which private-sector decisions are increasingly based on hard data.”

And yet there is some good news in this area, too. The explosion of available data has made evaluating success – in the government and the private sector – easier and less expensive than it used to be. At the same time, a generation of data-savvy policy makers and researchers has entered government and begun pushing it to do better. They have built on earlier efforts by the Bush and Clinton administrations.

The result is a flowering of experiments to figure out what works and what doesn’t.

 
Now, I support measuring government programs to try to make them better. But there are immediate red flags for me surrounding the “how” part of measuring and the “what happens next” after the measuring.

I have four major areas of concern about this trend:

1) Who gets to determine the definitions of “cost-effective” or efficient? Who sets the cutoff points for when a program is simply too ineffective or not getting enough bang-for-the-buck to continue? Do these people consider realities on the ground and the lives affected or just look at spreadsheets?

Are the people creating measurement systems representatives of the people at large and the communities being served by the programs? Are they comprehensively trained in the relevant area backgrounds? Are they just more Wall Street-turned-public-servant-turned-future-lobbyist folks? Are they trying to measure things just to prove government “doesn’t work”?

2) Are we currently under-funding many of these programs so severely and chronically that we can’t effectively demonstrate success they might otherwise have if consistently funded at appropriate levels? Are we going to cut off money to these “under-performing” programs that we’ve already starved of money?

In education, in particular, we’ve seen the paired trend of measuring performance standards (which I agree is very important) and then tying Federal funding to districts and local funding to teachers to these results without first making the changes (including funding increases!) necessary to improve the results. Are we also going to start taking away money from programs that aren’t “improving” enough each year because they’re already doing well? (This was the famous backfiring of No Child Left Behind in high-performing education states like Massachusetts and New Jersey.)

To return to the Leonhardt article for a moment (my bolding added):

New York City, Salt Lake City, New York State and Massachusetts have all begun programs to link funding for programs to their success: The more effective they are, the more money they and their backers receive. The programs span child care, job training and juvenile recidivism.

The approach is known as “pay for success,” and it’s likely to spread to Cleveland, Denver and California soon. David Cameron’s conservative government in Britain is also using it. The Obama administration likes the idea, and two House members – Todd Young, an Indiana Republican, and John Delaney, a Maryland Democrat – have introduced a modest bill to pay for a version known as “social impact bonds.”

 
Republicans have moved the goalposts so far since the start of the Reagan Administration with their view that “government is the problem, not the solution” that everything seems to be catered toward “proving” this claim by decades of intentionally “starving the beast” — under-funding/de-funding programs across the board by slashing revenues to pay for them — and then measuring outcomes afterward.

Back to my areas of concern…

3) While it’s important to get as much out of each dollar invested as possible (so you can use as much of the money as possible for as many people as possible), many public functions are public because they are not effective money-makers and need to be funded regardless of balance sheet results. Sometimes things just aren’t all that “cost-effective,” yet are necessary for the promotion or execution of certain social and economic goals.

In fact, the push for “cost-effectiveness” as a measurement skips over the fact that the goal of some programs is to provide an emergency economic floor, below which citizens should not be able to fall, rather than being designed to lift them up. A floor is not an elevator, and you wouldn’t measure a floor’s elevation over time to find out if it’s getting you closer to the top of the building. Many of the War on Poverty programs, in particular, don’t get nearly enough credit for being a major force in keeping total destitution in check even during long recessions and stagnant recoveries, because critics are too busy asking why they haven’t outright ended poverty.

4) Is this just another way to insert private sector profiteering in the middle of public functions that don’t need them? For example, we’ve already seen Goldman Sachs forcing its way in on the revenue stream of the Massachusetts prison system to do something the state could do and, in doing so, taking away money the state could be re-investing to help more ex-convicts stay out of prison.
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Detroit still shutting off water to poor families

In a deeply wrong-headed and immoral approach to close a budget gap, the water authority for the City of Detroit is still shutting off thousands of households’ public water access, claiming they have not paid up. In many cases the landlords have not paid through the rent contribution to the water bill, but either way, it’s reprehensible to shut off water to low-income families who are already barely scraping by. Now they can’t cook full meals, wash dishes, bathe, or stay hydrated. There’s no drought or natural disaster. It’s just budgetary.

We covered this crisis in depth on Arsenal For Democracy Episode 90
Part 2 – Bill and Persephone on Detroit Water Shutoffs:
Part 2 – Detroit – AFD 90

As an update, activists are now engaging in civil disobedience to try to halt the public water shutoffs, which have been condemned by the United Nations office for Human Rights.

See also: “Detroit’s Water Cutoffs: Counterproductive and Coldhearted” by Detroit-area U.S. Rep. John Conyers, on why this strategy makes no sense in addition to its basic cruelty.

North Carolina: Go rich or go anywhere else

North Carolina Governor Pat McCrory’s campaign to drive out the poor seems to be continuing full speed ahead. In addition to cutting and phasing out the Earned Income Tax Credit, Think Progress observes that,

…low-income North Carolinians will be paying higher taxes in order to pay for a tax cut for the richest people in the state. Republicans moved from a two-tiered, progressive income tax system to a flat tax rate of 5.8 percent. A person who earns a million dollars per year will get a roughly $10,000 tax cut thanks to that move, but the bottom 80 percent of the income distribution will see their taxes rise. That means that four out of five taxpayers in the state were going to pay more next year even before the EITC repeal.

The combined effects of those tax changes give poor North Carolinians some incentive to move out of the state, a population shift Gov. Pat McCrory (R) hopes to encourage.

 
It’s a flat-tax miracle, y’all!

Just last June, the state became the first in the nation to provide zero unemployment benefits. When the Federal government shut down in October, North Carolina immediately suspended WIC vouchers — literally taking food from the mouths of babes — as every other state used emergency/contingency funds.

This is all in line with Gov. McCrory’s views that North Carolina is too generous to low-income and unemployed people and that those undesirables must be just absolutely flocking to the state’s inner cities from the Dickensian hellscape that he apparently believes is the rest of America right now. That view in turn is just the tip of the McCrory/NC Republican iceberg of destruction, which has included trying to vaporize abortion rights and making it very difficult for some people to vote.

His deeply regressive policy agenda, shared by Republican state legislators in the majority there, has been called by The New York Times, “The Decline of North Carolina” and by me “North Carolina: Not Checking Itself, Before Wrecking Itself, Since 2010.”

Oddly, the former seemingly-moderate Charlotte mayor, seems to be extremely (and oddly publicly) thin-skinned for a high-profile politician and has not been taking the criticism well at all, as explored in a prominent column in the Charlotte Observer this past December:

…my interview with him last week and a breakfast with him a couple weeks earlier make clear he hasn’t changed a bit in one respect: This is a man obsessed with his image and how he’s portrayed. It’s clear he doesn’t go a day without being deeply frustrated by what he sees as unfair attacks on his good name.

My hour-and-40-minute one-on-one with the governor began with him complaining about an editorial cartoon and ended with a complaint about how Art Pope, one of his chief advisers, is depicted. In between, McCrory repeatedly sprinkled asides and bromides about how the media are out to get him and his administration. When I sat next to him at a recent breakfast, he tugged on my sleeve every couple of minutes, leaned over and murmured his displeasure with this cartoon or that editorial or a news story from six months ago.

[…]
Most of McCrory’s troubles stem, in his mind, not from his support of policies that a majority of North Carolinians disagree with but from a media that, through bias or incompetency, just can’t understand his greatness.

 

Huzzah. That’s leadership you can depend on.

AFD 68 – War on Poverty 50th Anniversary

Latest Episode:
“AFD 68 – War on Poverty 50th Anniversary”

Bill examines the War on Poverty at year 50, the state of the ongoing Iraq War, and a recent consumer protection victory. (Half episode due to UD Athletics.)

Related links:

– New York Times: “Fifty years later, War on Poverty is a mixed bag”

– BBC (2005): US used white phosphorus in Iraq (Please note that I mistakenly stated in the episode that this article and admission came in 2009, rather than 2005.)

– New York Times: “Qaeda-Linked Militants in Iraq Secure Nearly Full Control of Falluja”

– New York Times: “American Express to pay $75 million over credit card practices”

– AFD: “Another win for the Credit CARD Act of 2009”

The distance we’ve come on poverty

The United States still has a long way to go on reducing poverty in the United States, but all things considered, things have gotten better. On a number of key underlying metrics as well as quality of life standards, we’ve seen improvements since the beginning of the “War on Poverty,” fifty years ago this month, under President Johnson.

It’s worth keeping this knowledge in mind when the “War on Poverty” social programs — Medicare, Medicaid, food stamps, Head Start, Job Corps, welfare, etc. — that have provided safety nets and opportunities for low-income and struggling Americans are coming under attack today. They’re often dismissed as ineffective because topline poverty hasn’t moved very much since 1964 (though it also hasn’t exploded out of control, despite much higher levels of inequality, which is a good sign). So knowing the positives is key to defending them.

The New York Times published a short piece today summarizing the successes and failures of the anti-poverty efforts since January 1964.

The good:

Still, a broad range of researchers interviewed by The New York Times stressed the improvement in the lives of low-income Americans since Mr. Johnson started his crusade. Infant mortality has dropped, college completion rates have soared, millions of women have entered the work force, malnutrition has all but disappeared. After all, when Mr. Johnson announced his campaign, parts of Appalachia lacked electricity and indoor plumbing.

Many economists argue that the official poverty rate grossly understates the impact of government programs. The headline poverty rate counts only cash income, not the value of in-kind benefits like food stamps. A fuller accounting suggests the poverty rate has dropped to 16 percent today, from 26 percent in the late 1960s, economists say.

 

So on the brass-tacks/basics/fundamentals level, we’ve seen big improvements. And being poor, while certainly still no picnic, isn’t as horrendously bad as it was a half century ago, when it was still only a step or two away from “Grapes of Wrath” territory.

Then, the bad:

But high rates of poverty — measured by both the official government yardstick and the alternatives that many economists prefer — have remained a remarkably persistent feature of American society. About four in 10 black children live in poverty; for Hispanic children, that figure is about three in 10. According to one recent study, as of mid-2011, in any given month, 1.7 million households were living on cash income of less than $2 a person a day, with the prevalence of the kind of deep poverty commonly associated with developing nations increasing since the mid-1990s.

 

However, I still think on balance it’s been more successful than not, and we should keep fighting for more gains and not turn our backs on these programs by mythologizing their failures.

There’s a lot of wishful, rose-colored-glasses nostalgia surrounding the 1950s and early 1960s, in terms of glamorous economic good times. There’s at least some truth to that, in that the United States was the only industrial economy left standing for a brief time and high-paying jobs were plentiful for many segments of the workforce. But it was, in reality, also a period (as noted above) where large parts of the country still didn’t have electricity or other basic features/services of modern society.

I’m reminded of one of my favorite quotations:

“In the world of politics, nostalgia is a kind of quitting. It says, ‘I can’t deal with today, can we go back to yesterday?’ But a particular yesterday, without its attendant problems.”
– Ta-Nehisi Coates

 

The War on Poverty hasn’t done as much as we had hoped it would. But it has made a difference for many millions of Americans over the past fifty years. I also agree with those who say that broader economic efforts — including raising the minimum wage need to be made to reduce poverty more widely. Even so, I still want prioritize protecting and strengthening these social programs, not gutting them.

What should the longer objectives be in Mali?

French troops being airlifted to Mali. (U.S. Air Force photo by Staff Sgt. Nathanael Callon)The Economist ran what I believe to be a fairly reasonable editorial on the French & African-led UN interventions in Mali. They argue that the intervention should be limited to driving the jihadist groups out of the northern cities (but not getting dragged into a quagmire by trying in vain to stomp out an insurgency in the semi-desert “wastelands” through force) and to stabilizing the interim government in the south and freeing it from the shadow of the military officials who overthrew the elected government last spring.

If the Islamist rebels are prevented from seizing the south and forced out of the northern cities, and if serious efforts are made to improve governance (and hopefully provide economic redress to longtime northern grievances that allowed a window for the jihadists to outflank the secular rebels), then Mali will be on a safer footing and the West will be less fearful of it becoming a terrorist safe-haven in West Africa, which in turn means less future interference. The total incompetence and lust for power of the Malian Army is largely to blame for the current situation and the need for an intervention; had the Army not tried to overthrow a twenty-year-old democracy during a tantrum over their own inability to beat back a poorly organized rebellion despite American counterinsurgency training and funding, the northern rebels (first secular, then Islamist) would not have been able to take sweeping control over extensive territory, and the Islamist threat would have been more imagined than real. That said, the United States and the other Western powers should never have let the situation get this far by ignoring the poverty and real tensions that provoked the latest of many northern rebellions, and they should not have relied so heavily on a southern government that was unprepared for any real military response let alone a multifaceted engagement strategy to prevent rebellion at all.

In the future, I hope we consider providing more humanitarian aid to the region, but I fear the rise of the real Islamists there will preclude that even more so now than when the alleged Islamists who were actually secular separatists were the dominant regional faction against the government. During the Cold War, we used the Marshall Plan to rapidly alleviate poverty and strengthen moderate socialist and Social Democratic parties in Western and Central Europe — to prevent the spread of communism — by providing humanitarian aid and institution-building aid in the aftermath of World War II. The Soviets tried to do the same in reverse, but this was trickier for them given their own economic problems. Islamic political parties in Africa, the Middle East, and Central Asia have built supporter networks rapidly in impoverish regions not with talk of waging war on infidels but by providing humanitarian services, non-governmental shadow institutions, and jobs to people who are ignored, unemployed, and hungry. In Europe, we were willing to buy out reasonable Socialists and their constituents to halt the spread of communism and advertise American/capitalist economic benefits. Instead of replicating this extremely successful policy in the Middle East and Africa, we have opted nine times out of ten to isolate, ignore, or repress political Islam, even when it is relatively moderate, yet we do not offer any comparable alternative humanitarian aid, institutional aid, or employment, let alone offer any loyalty buyouts of these parties.

Ultimately, I suppose the Western powers pay for this strategy choice in lost troops, terrorist attacks, and fighter planes that cost far more (and do so for a longer period) than aid and investments would. It’s also too bad that voters don’t see the merits and payoff of an alternative strategy and keep saying they want to reduce foreign aid even further. But at the end of the day, we need our leaders to lead, advocate, and educate the public. That’s something most of them just aren’t doing.