Friday, March 21, 2008

Obama Mason and Public Finance

March 21, 2008, 9:45 a.m.

Today's Items Relating to Subjects Followed by This Blog

Obama Campaign
Barry Massey, "Gov. Richardson Endorsing Obama,"
Associated Press/Washington Post, March 21, 2008, 6:37 a.m. ("New Mexico Gov. Bill Richardson, the nation's only Hispanic governor, is endorsing Sen. Barack Obama for president, calling him a "once-in-a-lifetime leader" who can unite the nation and restore America's international leadership.").

Score One for President Mason. Look, I don't know what the arguments were pro and con, it may not be the most important issue confronting the University, and I don't even know if it was actually President Sally Mason's idea or something a staffer came up with. But carving out ambulatory medical services from Carver strikes me, intuitively, as a bit of creative analytical thinking worthy of notice and positive comment. Kathryn Fiegen, "Mason: Ambulatory services at UIHC could move; Would help alleviate traffic near hospital," Iowa City Press-Citizen, March 21, 2008, p. A1.

Again, on this next story, I don't know the details, but having played a major role as an FCC commissioner in getting the anti-smoking spots on television, and as a former co-director of Iowa's Institute for Health, Behavior and Environmental Policy, I was of course interested in this morning's story about the selection of Jim Merchant's replacement as dean of the College of Public Health: Susan J. Curry from the University of Illinois. From all initial descriptions, it looks like a good choice. Diane Heldt, "Healthy Outlook; Illinois-Chicago Educator to Lead Public Health College," The Gazette, March 21, 2008, p. B1.

Public Finance: Murals, Earmarks and Giveaways

Murals. Former Iowa City City Counselor, Bob Elliott, had a little serious fun with his former colleagues in an op ed column this morning. There are all too many examples in public finance (as well as corporate and personal finance) of solutions, or opportunities, that require less money while producing greater benefits. Finding them is a wonderful intellectual challenge that can produces great financial rewards. It seems the City is offering an outfit in Arizona $65,000 to paint a mural on the wall of an indoor swimming pool. Elliot questions whether a mural is an essential element for swimming, but if it is why it wouldn't be both more desirable -- and far cheaper -- to have it done by local artists, including UI and high school students. (There is precedent in the mural done by our alternative high school students under the direction of Hani Elkadi.) Bob Elliott, "Look Locally for Rec Center Art," Iowa City Press-Citizen, March 21, 2008, p. A11.

Earmarks. Eliminating earmarks and special interest funding of our Representatives and Senators are among the top priorities of virtually all public interest reformers. Having replaced Congressman Jim Leach with former Cornell College professor Dave Loebsack, we now have a representative who votes with the Congressional Democrats -- but who also takes PAC and lobbyist money, and in this morning's Press-Citizen is defending earmarks. Pamela Brogan, "Loebsack defends earmarks; Says they should go to education, public safety," Iowa City Press-Citizen, March 21, 2008, p. A3.

What's wrong with earmarks? "Let me count the ways."

They are unfunded. They enable office holders, at no cost to themselves, to appear to be servicing their district or state by funding special projects, that we're paying for by borrowing from the Chinese today and leaving to our great-grandchildren to pay back tomorrow.

They are not properly vetted. There's a reason Congress creates administrative agencies. Gathering data and doing analysis takes time and expertise Congress doesn't have. To let individual officials envision and create earmarks in the dead of night under a rock is not a very rational approach to comparative project evaluation. Senator Grassley's $50 million for an ill-considered indoor rain forest is one example right here at home. The "bridge to nowhere" in Alaska is another.

They are open to the most rampant corruption and paybacks to campaign contributors.

If Congress is to engage in such project-by-project authorization it should be done through the regular process of bills, sub-committee and committee staff consideration, hearings, reports, ultimate floor debate, passage in both houses, and presidential approval.

But Congress shouldn't be mired in such petty details regardless of the process. Most of these earmarks involve relatively minor (in a three-trillion-dollar budget) items more appropriate for consideration by state legislatures, county boards of supervisors, city councils, local businesses and philanthropists. To the extent they do involve local illustrations of what are, in fact, nationwide needs they should become a part of national programs.

It's not necessary to play the earmarks game "because 'everybody's doing it.'" Everybody's not doing it. There are members of the Senate and House who don't play the game; members who are leading the charge against earmarks. Congressman Loebsack simply chooses not to be among them.
Giveaways. Meanwhile, the state giveaways continue unabated -- $155 million-plus to the likes of Hamlet Protein of Denmark, Hormel, and John Deere. Nor is this all for businesses new to Iowa, or new construction. "Federal Mogul" (now there's a name) would like to buy some equipment to make a new Champion spark plug at its "existing spark plug plant in Burlington"! In addition to the direct cash outlays from grateful Iowa taxpayers to the bottom line of these for-profit corporations (from such funds as the "Community Economic Betterment Account" and "High Quality Jobs Creation Program") there are always the hidden benefits the legislature refuses to reveal to the media and public in detail involving taxes the firms are told they won't have to pay, or the costs of infrastructure support they would otherwise have to pay for themselves that is picked up by the taxpayers. David DeWitte, "Wind-Power Factory to Open in Oelwein," The Gazette, March 21, 2008, p. B8; Associated Press, "State Gives $155M to Business Projects," Iowa City Press-Citizen, March 21, 2008, p. A9.

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