Random Criticism of Government

I’m falling behind on criticizing government. Pretty soon people are going to wonder if I’m a real libertarian or not. So here are three issues that caught my attention recently.

The Marianas Money Meltdown
The Northern Marianas’ public employees pension fund is bankrupt. Rarely has there been a plan more perfectly designed to fail. The pension covers not just spouses, but children, “long after the employee died.” So allegedly public employees were legally adopting their grandchildren, so they’d be eligible. And you only had to work for the government for 3 years to be eligible for apparently full benefits at age 62. When the economy slowed, the government reduced its contributions to the fund, but because the pension is written into the Constitution, the payments to beneficiaries could not be adjusted. If a private pension fund had been run like this, liberals would be demanding better government oversight. So who do we turn to for oversight when it’s government that pooches the pensions?

The Mississippi Manacle Mess
The Jackson, Mississippi school district has agreed to stop handcuffing students to fixed objects as a form of discipline. Wait…what?! Yes, the Capital City Alternative School manacled students to immovable objects as punishment for minor infractions such as “violating dress code or talking back to a teacher.” I can only imagine the liberal outrage if this happened at a private school, or especially at a charter school.

It’s not that government is necessarily particularly egregious about these types of things. It’s that government is run by people, just like the private sector is, and people are bastard coated bastards with bastard filling. Put them in charge of anything, public or private, and they’ll find a way to completely screw it up.

Temporary Towhitch Tyranny
Then there is this proposed change to Michigan’s Vehicle Code.


In other words, if–like me–you have a receiver hitch, you would have to remove the ball and hitch anytime you’re not towing something. That’s good practice, because if–like me–you never do it, the cotter pin rusts into place and it’s a real bear to remove when you need to. But the thing only sticks out about 6 inches, so it’s not a particular hazard, except to your shins when you’re walking around the back of your vehicle. The only justification I can see for this idea is to give police one more excuse to stop drivers and search for drugs.

About J@m3z Aitch

J@m3z Aitch is a two-bit college professor who'd rather be canoeing.
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16 Responses to Random Criticism of Government

  1. pierrecorneille says:

    First of all, the vehicle code seems ridiculous, and assuming there’s no other qualification to the law or no other context, then yes, it seems like a ploy to enable police to stop more people.

    I think the first two examples, however, and especially the second one, seem to miss the mark a little when you use them to attack “liberals.” I was originally going to write that the examples seem “strawmannish,” but they’re not entirely strawmen. Liberal(ish) people, myself included, have their own blind spots, confirmation biases, and instances of selective, knee-jerk defenses of government policies. But I think the liberal position on these matters can be (although maybe not necessarily would be) more nuanced than it might seem at first glance.

    Re: the Marianas pension plan:

    Assuming the description of the way the plan worked is correct, I think it is a poorly conceived, supervised, and implemented plan. Who to turn to for oversight if it’s the government’s (and not a private fund’s) incompetence? I don’t know, so you have a point. But I would support better government oversight of its own pension plans, maybe by some form of balanced budget provision along with requirements for auditing by independent auditors (I’m too ignorant of how US territorial governments work; I’m also pretty ignorant about how pensions work). But I’m not sure that the Marianas / US mismanagement of the pension funds means private fund managers should not be subject to some form of government oversight, let alone “better” government oversight. The trick is what is “better” and what might, for example, lead to capture or government bailouts.

    Now as a parable on the foolishness of publicly-funded pension schemes, this example seems to be a rather poor one because it is so egregiously (and therefore perhaps exceptionally) bad. A better example might be the problems with Illinois’s public pension system, the in’s and out’s of which I don’t know fully, but which owe at least something to the almost institutional interest of the state in placating public employees unions while kicking the costs down the road.

    Re: Mississippi school hand-cuffings:

    I’ll admit that a private school or a charter school might be grist for my (liberalish) mill when it comes to criticizing vouchers and other policies allegedly designed to encourage “school choice.” Perhaps I surrender my liberal bona fides when I say I’m not 100% sure of my position , although I am probably in practice a soft opponent of what I understand them to be.

    But in a larger sense, to the extent i object to vouchers, etc., my objection doesn’t rely on the claim that the private or quasi-private entities manacle their students while at the same time I realize other liberals might jump on a the criticizing train if such an example could be found.

    I was going to write a long paragraph explaining why a libertarian should be outraged if the situation happened at a private or charter school, but then I reread your post and realized you addressed that issue, at least to my satisfaction, when you wrote “It’s not that government is necessarily particularly egregious about these types of things. It’s that government is run by people, just like the private sector is, and people are bastard coated bastards with bastard filling. Put them in charge of anything, public or private, and they’ll find a way to completely screw it up.”

    Still, I am indeed outraged by the Mississippi manacles.

  2. James Hanley says:

    as a parable on the foolishness of publicly-funded pension schemes

    No, that’s not it. The message is in the “It’s not that government…” paragraph. Despite the subhead structure that probably suggests otherwise, that statement applies to both of the preceding stories.

  3. pierrecorneille says:

    Okay, I guess that’s clear enough.

  4. Troublesome Frog says:

    Yes, the Capital City Alternative School manacled students to immovable objects as punishment for minor infractions such as “violating dress code or talking back to a teacher.”

    I’d be tempted to pull the fire alarm and see what the fire marshal has to say when firefighters inspect the evacuated building and find a kid handcuffed to something. My guess is that he’d forget all about being pissed off that somebody pulled the fire alarm.

    The pension thing… That’s just hilarious. Have you ever watched a commercial and said to yourself, “A company paid advertising consultants to come up with this. They proposed this idea and then it got through a committee of people who decided to spend millions of dollars on it. How is this possible?” The number of stupid big-money ideas that will get through a committee of people who are paid to think about this stuff is astonishing. As they say, None of us is as dumb as all of us.

  5. Lance says:

    I watched a WWII documentary about the “Great Marianas Turkey Shoot” yesterday. Odd that the little island would come up here the next day. Instead of scores of Japanese planes it is the economy of the island going down in flames this time.

    Pierre Corneille’s your answer to a fiasco caused by government interference in markets is more government interference?

  6. Matty says:

    Pierre Corneille’s your answer to a fiasco caused by government interference in markets is more government interference?

    Not exactly, the government already controls the pension plan, Pierre is (I think) advocating that other bits of the government ought to keep an eye on the bits that run pensions. The idea of different parts of government checking each other is not terribly controversial nor does it imply an increase (or decrease) in the power of government over anything else.

    Who would you have overseeing the Mariana’s pension scheme, which I agree sounds laughably over generous? A private body could hardly have enforceable authority over a government agency unless either another part of the government backed it up (please note for these purposes government includes courts and legal officials).

    You may argue government should not be providing employee pensions, or more generally that it should be doing less, but the last thing it should be withdrawn from is scrutinising its own activity. Even in a night watchman state consisting of one judge and one police officer you would still want the judge to be able to to review the officers work and impose sanctions if he went too far wrong.

  7. pierrecorneille says:

    Matty pretty much sums up what I meant. I would not be adverse to a private citizen’s group or a private auditing firm subjecting a government-run pension scheme to a regular audit.

  8. Lance says:

    It seems as if this pension plan was doomed from the start. I don’t see how “oversight”, either private or public, could have saved this ill conceived boondoggle.

  9. Dr X says:

    I wonder if anyone who wrote about this tracked down the real background on the Marianas story. Was there one bad article that everyone is drawing on? Here’s why I ask: I’ve been poking around and could devote way too much time to this posting links and cutting and pasting excerpts from the constitution and from retirement fund legislation, so I’ll just mention some of the inaccuracies in the reporting of this story based on my reading of the constitution, pension legislation and a summary of a pension audit report from 2007.

    First, the retirement plan is not written into the constitution. The retirement fund was established by a legislative act in 1978. The act provided that every five years an actuary will evaluate the finances of the fund. The act has been amended over time by the legislature and, if the outrageous provisions being mentioned are law, they were added after 1978. In any case, changing the pension rules would simply require a legislative act. The rules are not their big problem.

    Going back to the 1978 retirement act, employees were eligible to retire at age 60. Full pension was available to employees who worked for the government at least 25-years. Those who worked 20 years would be eligible at age 60 for a 3/4 pension. No double-dipping permitted. That is, nobody who retires and takes another government job can continue to receive pension payments along with government pay. I’m just laying this out to give you an idea of how this was established. It was not some insane plan doomed to failure. The act was amended in subsequent years, but I stopped reading subsequent legislation before I could find any information to support some of the claims being made about outrageous benefits. So it’s possible that outrageous changes were made, but the fund certainly wasn’t doomed from the start.

    There actually is a constitutional issue that the Marianas government has been dealing with in relation to the pension fund: The constitution limits the amount of indebtedness the government can accumulate to no more than 10 percent of the estimated property value of the nation. In the 2007, a legislatively-required 5-year audit of the fund, found that the pension plan was only funded at 46% of what it needed to meet future obligations (since then it’s fallen to only 38%). That, by the way, is better than quite a few state pension funds.
    The audit found that the government had not been paying its share into the fund for 10 years (employees make a contribution too.) The unfunded liability was $1/2 billion. The government wanted to issue bonds to borrow the money to make up for the shortfall because the auditor reported that a meltdown would occur if they didn’t do so. But borrowing $1/2 billion would exceed the 10-percent constitutional limit on government indebtedness. The legislature proceeded to work on an amendment to change the debt limit and allow the government to borrow. After reading many documents, including the constitution, I stopped and don’t know where they ended up on this issue, but one concern they had was that things were in such bad shape that even if they issue bonds, their creditworthiness was in question and they might not be able to raise the money from private lenders who would naturally be concerned about getting paid back.

    An additional problem is that the fund was heavily invested in mortgage-backed securities and 1/2 the mortgages in the fund’s investment are in default post 2008-2009 real estate crash. Complicating matters further, the manager of the investment portfolio who was with one of the big banks disappeared last fall, and was presumed to have drowned off the cost Hawaii.

    There is also a question about whether the fund can actually be given bankruptcy protection. Normally the courts can’t provide this protection when government obligations are involved, but the pension fund is set up something like the Fed. The governor nominates a board every four years and the legislature must approve nomination, but legally the pension fund is not part of the government. So the board decided that they could seek bankruptcy protection. The question is whether the bankruptcy court will agree that the fund is sufficiently independent of the government to qualify for protection.

    I dug this far because it’s an interesting story, but not interesting that I want read more, but I’ve read enough of the actual documents to see that this story is being badly misreported.

  10. Dr X says:

    correction: debt limited to 10% of property value of the territory, not nation.

  11. pierrecorneille says:

    “It seems as if this pension plan was doomed from the start. I don’t see how “oversight”, either private or public, could have saved this ill conceived boondoggle.”

    Assuming the pension plan works as advertised–although Dr. X calls that into question–you are right, it is an unsalvagable, “ill conceived boondoggle.” My main point was that if there is going to be a public pension plan, why not have more oversight than “trust the government to get it right”?

  12. James Hanley says:

    I heard the original report on NPR–they couldn’t possibly get it wrong, could they?

    Be that as it may, the route to the eff-up is less pertinent to my point than the eff up itself. Too often liberals respond to any private sector screwup with a knee-jerk proposal for government to either take over or provide tighter regulation, which implicitly assumes government has some immunity from the same problems, or at least a significantly lower probability of encountering such problems. So it’s worth pointing out from time to time that government does things badly, too, often in ways that are not particularly distinguishable from the way the private sector does things badly.

    It’s not really so much an anti-government or pro-market argument as a “whichever way you go you’re relying on humans, so don’t be blithely optimistic” argument.

  13. Dr X says:

    Pierre Cornielle,

    Regarding oversight, that’s why I mentioned the audits. The original legislation required that an independent “actuary” audit the pension plan at least once every five years. It was the actuary in 2007 who reported that the pension plan was in trouble. I do know the legislature was pursuing a solution, but ran into the problem of the debt limit written into the constitution.


    I agree with your point about naively assuming government is immune or less prone to eff-ups than the private sector. The information I provided doesn’t change that. l was just curious about how anyone could have possibly been so stupid as to create such an absurd plan and cement it into their constitution, so I researched it, not to debunk the history of the problem, but to get some background on the politics behind it. Frankly, I was expecting to read things that quickly revealed how incredibly ignorant the group that wrote the constitution was. Come to find out, the real story is quite different. Their constitution looks like it was created by some very sophisticated people, though I do have some big disagreements with some parts of their constitution. For example, only persons of native descent are permitted to own real estate or incorporate. Both would discourage outside investment which a remote territory could very much use. I understand that they probably feared that they would effectively be a colony of native underlings controlled by foreign corporations, but the solution was naive, as I’m sure you’d agree. I also found their constitutional ban on abortion troubling, but not especially behind the times in 1977 when the constitution was written. I think I read that the constitution was amended to permit abortion in 1985.

    They did grab a good chunk of the US bill of rights. I thought it peculiar that they were concerned about quartering of soldiers in homes during time of war. But maybe only 32 years out from the Pacific war, they believed that could become an issue.

  14. James Hanley says:

    Dr. X, you do have me curious, so I plan to read up on it a little more, too.

  15. Dr X says:

    Very tangentially, a story about a musician who understands markets and fans who don’t.


  16. James Hanley says:

    Nice link, Dr. X. Jack White’s exactly right. And note that he’s not trying to make access to his music very expensive, just access to the collective vinyl media. My wife used to be a serious collector, and she’s got some very nice colored vinyl–highly desirable, but only because it’s rare. So what I take from White is, if all you want is to listen to his music, pay the normal price, but if you want a collectible, don’t cry because the market sets a high price on collectibles.

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