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  • Originally posted by Marcus1124 View Post

    I am not at all clear on what you are going on about now. Your whole premise began as a way to supposedly improve the business environment for small to medium enterprises (SMEs), and you suggest having the Federal Government micromanaging (through strings attached to federal funds) for what you view as "mismanagement" of contracts. But the types of things you are talking about are not contracts, they are generally done as tax breaks or direct spending on areas of state responsibility that we can argue over the wisdom of, but those are for the voters of each state to decide for themselves, and not the Federal Government to either reward or punish. I think you are conflating things which really don't have anything to do with each other in practical terms and will not have any real impact (other than creating an prohibitively costly monitoring and oversight regime which will end up being lose/lose).

    Most of the things we are talking about have nothing to do with federal funds in the first place. Take, for example, the bidding war over Amazon HQ2. States are offering various state and local tax incentives, agreement on infrastructure support, etc. etc. These are not federal issues, they are state and local and only tangentially (in the case of some of the infrastructure spending) involve (partially) federally provided funds.

    My view is that in most instances the federal grants you are talking about shouldn't exist in the first place (block grants are a transitional means of getting the federal government out of various things, not a means of disbursing federal funds in and of themselves). For example, federal highway funds should be limited to partial funding and maintenance of the Interstate Highway system (a fraction of what is currently spent at the federal level), the purpose of which is to ensure good highways for moving around the country. There should be no federal funds for local roads and highways.

    If you want to help SMEs, the way to do it is to reduce burdensome regulations which create barriers to entry or competitive disadvantages, not to try and have federal micromanaging of unrelated things.
    Block grants -GOP version- often includes "no strings attached" as one condition. Pretending the federal gov't. does not have an interest in overseeing revenue distribution to the states/local gov't. couldn't be your point. ...Or could it?

    There is no business operation, public or private, that "gives up" interest in how related organizations spend it's contributions, especially when those contributions have objectives attached. The oversight isn't a huge expense, either. That can start with an objectives statement, and follows up with an audit. On the contrary, that low cost oversight ensures the money is spent more efficiently. The objective and audit process applies to international entities (companies) dealing with state/local gov't. There is always negotiation (directly implying a contract), there are always standards on what those contracts contain, including safeguards for the local community. You seem to read "regulation" by the federal gov't. into this process. It isn't regulation, it is common business practice. There are economic consequences between partners, when one partner fails to properly negotiate a third party contract. When the economic impact is large, it is expected that incompetence is corrected. That correction comes from below (taxpayers/customers) as well as from above (a partner who finances part of one's operation).

    That is essentially the difference that gets to my point: Local gov't. risks less with home-grown, smaller business entities, so whatever regs or negotiations are arranged have a smaller individual impact. There are two very different scenarios, one providing an abandoned storefront at steep discount (fe unpaid taxes) to a small business, providing they remodel to agreed on specifications and employ at least 4 people. That negotiation is simple, regulations (aka, contract) easily conform to objectives of both parties, financial risk is lower. The game changes radically with a very large employer. The MNC, getting the whole package of construction bonds, multi-year pardon of property taxes, etc, but gov't. lacking protection such as claw-back provisions. A large mistake by party A requires a reaction from a partner who partially finances party A. The partner must minimize their loss, at least when party A has disregarded standard operating practice in negotiating large contracts. In the case of the federal gov't, that means a standard operating procedure that minimizes loss by all gov't. levels when followed, and an audit procedure that sanctions smaller gov't. entities that "race to the bottom" (ignore one or more protections listed in the SPO) while trying to attract MNC's.

    מה מכילות החדשות?


    • Originally posted by radcentr View Post
      Block grants -GOP version- often includes "no strings attached" as one condition. Pretending the federal gov't. does not have an interest in overseeing revenue distribution to the states/local gov't. couldn't be your point. ...Or could it?

      There is no business operation, public or private, that "gives up" interest in how related organizations spend it's contributions, especially when those contributions have objectives attached. The oversight isn't a huge expense, either. That can start with an objectives statement, and follows up with an audit. On the contrary, that low cost oversight ensures the money is spent more efficiently. The objective and audit process applies to international entities (companies) dealing with state/local gov't. There is always negotiation (directly implying a contract), there are always standards on what those contracts contain, including safeguards for the local community. You seem to read "regulation" by the federal gov't. into this process. It isn't regulation, it is common business practice. There are economic consequences between partners, when one partner fails to properly negotiate a third party contract. When the economic impact is large, it is expected that incompetence is corrected. That correction comes from below (taxpayers/customers) as well as from above (a partner who finances part of one's operation).

      That is essentially the difference that gets to my point: Local gov't. risks less with home-grown, smaller business entities, so whatever regs or negotiations are arranged have a smaller individual impact. There are two very different scenarios, one providing an abandoned storefront at steep discount (fe unpaid taxes) to a small business, providing they remodel to agreed on specifications and employ at least 4 people. That negotiation is simple, regulations (aka, contract) easily conform to objectives of both parties, financial risk is lower. The game changes radically with a very large employer. The MNC, getting the whole package of construction bonds, multi-year pardon of property taxes, etc, but gov't. lacking protection such as claw-back provisions. A large mistake by party A requires a reaction from a partner who partially finances party A. The partner must minimize their loss, at least when party A has disregarded standard operating practice in negotiating large contracts. In the case of the federal gov't, that means a standard operating procedure that minimizes loss by all gov't. levels when followed, and an audit procedure that sanctions smaller gov't. entities that "race to the bottom" (ignore one or more protections listed in the SPO) while trying to attract MNC's.
      Governments are not businesses, period. While the running of their internal operations could and would benefit greatly from the type of management practices in terms of finding operational efficiencies (including holding individual employees and "managers" accountable for performance against objective metrics), it is nonsense to suggest that the types of "contracts" you seem to be talking about have the same basic objectives on both sides of the negotiation is follow.

      I think what you are suggesting is that government should be making an effort to tip the scales in favor of SMEs of MNCs. It shouldn't, period. Government should not be putting its fingers on the scale. In any individual engagement, government (to the extent it should be involved AT ALL) should strive for the best deal for its constituents, not favoring any particular provider of goods and services over another. What I was saying, with regard to regulation and SMEs is that all the stuff you seem to be saying simply has nothing to do with SMEs to begin with, and that the only really meaningful thing government "do" to improve the playing field for SMEs is to get rid of various regulatory burdens which disproportionatly impact SMEs (which I consider scaling back what the government is "doing" and getting out of the way rather than an ongoing affirmative efforts to keep a finger on the scale). These include barriers to entry (burdensome registration and costly requirements for small business creation--including "Certificates of Need", which exist solely to benefit existing businesses, to the detriment of consumers, and other licensing laws--nodody should need a license to be a beautician). In fact, the single best thing that could be done to help SMEs would be the elimination of minimum wage laws. Were you aware that Walmart actually is supportive of increasing the national minimum wage (so long as there are few to no exclusions based on business size)? This is because the minimum wage inherently harms SMEs more than large companies, and that many of these regulations are often supported by large players because the additional marginal cost to them is more than made up for on their bottom line profits by the increased market share they get from the larger competitive disadvantage the same regulations put on SMEs.


      Frankly, since you have not provided any actual, real world examples, it is hard to tell what it is you are actually talking about. I am happy to explore these ideas further, but need you to provide actual, specific examples, to illuminate what it is you are referring to. This will also help me to distinguish what I suspect are several different, unrelated things (each of which merit discussion in their own right) that I think you may be conflating.

      With regard to federal block grants the hole point is to move away from (particularly in areas that the Federal Government should never have been involved in to begin with) one-size-fits-all federally micromanaged programs, and to allow different states (which have 50 different combinations of values, priorities, and underlying economic playing fields) to allow experimentation and innovation at the state level. Longer-term, they are best used as a way to steadily get the federal government out of those areas through steady phase out of the funds over the long-term. Both of these goals are difficult because there are so many vested interests (including the sprawling regulatory and oversight arms of the existing implementation bureaucracy) that simply don't want to give up power and their personal benefits under existing systems.

      מה מכילות החדשות?


      • Originally posted by Marcus1124 View Post

        Governments are not businesses, period. While the running of their internal operations could and would benefit greatly from the type of management practices in terms of finding operational efficiencies (including holding individual employees and "managers" accountable for performance against objective metrics), it is nonsense to suggest that the types of "contracts" you seem to be talking about have the same basic objectives on both sides of the negotiation is follow.

        I think what you are suggesting is that government should be making an effort to tip the scales in favor of SMEs of MNCs. It shouldn't, period. Government should not be putting its fingers on the scale. In any individual engagement, government (to the extent it should be involved AT ALL) should strive for the best deal for its constituents, not favoring any particular provider of goods and services over another. What I was saying, with regard to regulation and SMEs is that all the stuff you seem to be saying simply has nothing to do with SMEs to begin with, and that the only really meaningful thing government "do" to improve the playing field for SMEs is to get rid of various regulatory burdens which disproportionatly impact SMEs (which I consider scaling back what the government is "doing" and getting out of the way rather than an ongoing affirmative efforts to keep a finger on the scale). These include barriers to entry (burdensome registration and costly requirements for small business creation--including "Certificates of Need", which exist solely to benefit existing businesses, to the detriment of consumers, and other licensing laws--nodody should need a license to be a beautician). In fact, the single best thing that could be done to help SMEs would be the elimination of minimum wage laws. Were you aware that Walmart actually is supportive of increasing the national minimum wage (so long as there are few to no exclusions based on business size)? This is because the minimum wage inherently harms SMEs more than large companies, and that many of these regulations are often supported by large players because the additional marginal cost to them is more than made up for on their bottom line profits by the increased market share they get from the larger competitive disadvantage the same regulations put on SMEs.


        Frankly, since you have not provided any actual, real world examples, it is hard to tell what it is you are actually talking about. I am happy to explore these ideas further, but need you to provide actual, specific examples, to illuminate what it is you are referring to. This will also help me to distinguish what I suspect are several different, unrelated things (each of which merit discussion in their own right) that I think you may be conflating.

        With regard to federal block grants the hole point is to move away from (particularly in areas that the Federal Government should never have been involved in to begin with) one-size-fits-all federally micromanaged programs, and to allow different states (which have 50 different combinations of values, priorities, and underlying economic playing fields) to allow experimentation and innovation at the state level. Longer-term, they are best used as a way to steadily get the federal government out of those areas through steady phase out of the funds over the long-term. Both of these goals are difficult because there are so many vested interests (including the sprawling regulatory and oversight arms of the existing implementation bureaucracy) that simply don't want to give up power and their personal benefits under existing systems.
        Curious. I thought the GOP elected a businessman to restore (initiate?) proper business practices in federal government operations. I proposed one such reform, applied to an unequal relationship between MNC's and local gov't trying to drum up business. When the local gov't. refuses -because of vanity, incompetence, corruption (or all of the above)- to use a checklist to prevent a large amount of economic damage, your response would be for the federal taxpayer to subsidize that incompetence.

        Because if we let locals screw up in a Big Way without consequence, despite established guidelines available to avoid those screw-ups, we have only ourselves to blame. Go ahead and ignore the issue, if you think voters will somehow correct their local reps MNC (aka, Big Money) mistakes. I want the federal gov't. to impose financial discipline to avoid those large mistakes.

        מה מכילות החדשות?


        • Originally posted by radcentr View Post
          Curious. I thought the GOP elected a businessman to restore (initiate?) proper business practices in federal government operations.
          I think I made that clear, distinguishing between running government in general like a business (they are fundamentally different), versus applying many of the operational principles of private sector business vis-a-vis efficiency indicators, accountability of individual staff to performance metrics, etc.

          Originally posted by radcentr View Post
          I proposed one such reform, applied to an unequal relationship between MNC's and local gov't trying to drum up business. When the local gov't. refuses -because of vanity, incompetence, corruption (or all of the above)- to use a checklist to prevent a large amount of economic damage, your response would be for the federal taxpayer to subsidize that incompetence.

          Because if we let locals screw up in a Big Way without consequence, despite established guidelines available to avoid those screw-ups, we have only ourselves to blame. Go ahead and ignore the issue, if you think voters will somehow correct their local reps MNC (aka, Big Money) mistakes. I want the federal gov't. to impose financial discipline to avoid those large mistakes.
          Again, please provide some specific real-world examples of what you are talking about. I think that voters will absolutely hold local reps accountable based on what those voters think is in the best interest of themselves and their community...the problem I think you have is that they may not agree with what you would have decided in their place. For example, I think that one of the stupidest things any state or local government can do is spend taxpayer money to coax sports teams to their locality...but many, many voters absolutely LOVE this, despite the fact that claims to any net economic benefit locally is specious (claims otherwise often ignore substitution and simply assume that consumer spending on the sports franchise is net additional expenditure and not spending shifted from other entertainment opportunities over the long run). But that is what federalism is all about, not imposing one set of values, priorities, or views on every location. An even better example is the Olympics, which generally require HUGE public expenditures to prepare for and hosting, the economic payoff for which is even more dubious than long-term sports franchises.



          מה מכילות החדשות?


          • Originally posted by Marcus1124 View Post

            I think I made that clear, distinguishing between running government in general like a business (they are fundamentally different), versus applying many of the operational principles of private sector business vis-a-vis efficiency indicators, accountability of individual staff to performance metrics, etc.



            Again, please provide some specific real-world examples of what you are talking about. I think that voters will absolutely hold local reps accountable based on what those voters think is in the best interest of themselves and their community...the problem I think you have is that they may not agree with what you would have decided in their place. For example, I think that one of the stupidest things any state or local government can do is spend taxpayer money to coax sports teams to their locality...but many, many voters absolutely LOVE this, despite the fact that claims to any net economic benefit locally is specious (claims otherwise often ignore substitution and simply assume that consumer spending on the sports franchise is net additional expenditure and not spending shifted from other entertainment opportunities over the long run). But that is what federalism is all about, not imposing one set of values, priorities, or views on every location. An even better example is the Olympics, which generally require HUGE public expenditures to prepare for and hosting, the economic payoff for which is even more dubious than long-term sports franchises.
            Here is one link:
            A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains.

            The cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.

            “How can you even talk about rationalizing what you’re doing when you don’t even know what you’re doing?” said Timothy J. Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich.

            The Times analyzed more than 150,000 awards and created a searchable database of incentive spending. The survey was supplemented by interviews with more than 100 officials in government and business organizations as well as corporate executives and consultants.
            https://www.nytimes.com/2012/12/02/u...porations.html

            I expect rational conservatives to be concerned about significant, general loss of revenue, even if it is a cumulative figure from 100's of distinct local governments. They are not controlling the losses and the voters often don't pay attention. You claim there is no "business" aspect to government. Try to look at the problem this way: There are financial rules for properly running a government. This points to a major failure to adhere to some of those rules, and the extreme likelihood that the losses are at least partially subsidized by federal funding.

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            • Originally posted by radcentr View Post
              Here is one link:
              https://www.nytimes.com/2012/12/02/u...porations.html

              I expect rational conservatives to be concerned about significant, general loss of revenue, even if it is a cumulative figure from 100's of distinct local governments. They are not controlling the losses and the voters often don't pay attention. You claim there is no "business" aspect to government. Try to look at the problem this way: There are financial rules for properly running a government. This points to a major failure to adhere to some of those rules, and the extreme likelihood that the losses are at least partially subsidized by federal funding.
              Ok, so we are not talking about anything that is any of the federal government's business. That said, we can start by eliminating the "cost" of tax credits from the calculations. Lower revenue is not a "cost" to government or taxpayers, particularly after a company chooses to leave, as there are no revenues from said companies for which the credits apply.

              If state and local voters don't consider something important enough to be primary drivers of their vote, it is not for the federal government to second guess. That is what federalism is all about.

              And even if it were, you are wrong that the monitoring and enforcement of your federally imposed punishment not requiring a hideously expensive (and ultimately overreaching and abusive) bureaucracy. And just wait until this oversight becomes politicized (it will) and subject to the usual bureaucratic overreach.

              Finally, if you want federal intervention in poor management of state and local governments, you should instead focus on having the federal government force states to apply the same rules as the private sector to benefit and pension liabilities.

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              • Originally posted by Marcus1124 View Post

                Ok, so we are not talking about anything that is any of the federal government's business. That said, we can start by eliminating the "cost" of tax credits from the calculations. Lower revenue is not a "cost" to government or taxpayers, particularly after a company chooses to leave, as there are no revenues from said companies for which the credits apply.

                If state and local voters don't consider something important enough to be primary drivers of their vote, it is not for the federal government to second guess. That is what federalism is all about.

                And even if it were, you are wrong that the monitoring and enforcement of your federally imposed punishment not requiring a hideously expensive (and ultimately overreaching and abusive) bureaucracy. And just wait until this oversight becomes politicized (it will) and subject to the usual bureaucratic overreach.

                Finally, if you want federal intervention in poor management of state and local governments, you should instead focus on having the federal government force states to apply the same rules as the private sector to benefit and pension liabilities.
                Do you believe the federal gov't. has no business doing a cost/benefit analysis of how it is funding state/local gov't operations? I proposed a cheap but effective process -the audit based on an established best practices in negotiating large contracts. I proposed that be used for one procedure (MNC incentives), rather than micromanaging. That doesn't work for you.

                What do you propose the federal government do about state/local gov't wasting federal revenue sent their way? You mentioned poor contract planning on public pension plans. I'd agree with that being subject to the same, simple risk/benefit analysis, and adjustment in federal funding. You can make the process transparent, limit the scope and power of the federal gov't., do all the other things that fiscal and constitutional conservatives claim they want for good governance. However, ignoring where federal money is spent, when it is being thrown down a rat hole, is poor governance. Any way you try to look at it.

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                • In my opinion, something not specifically reserved for the Fed is automatically reserved for the States, right?

                  An audit as proposed by radcenter is not specifically reserved for the fed ... or is it (can the argument be made)?

                  Personally, and also in my opinion, both state and federal governments abuse any rational economic process and unfortunately it has been going in for decades. I would think some kind of audit followed by "best practices" would be a great boon to both state and federal finances ... which is probably the reason no one will do it.

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                  • Originally posted by radcentr View Post
                    Do you believe the federal gov't. has no business doing a cost/benefit analysis of how it is funding state/local gov't operations? I proposed a cheap but effective process -the audit based on an established best practices in negotiating large contracts. I proposed that be used for one procedure (MNC incentives), rather than micromanaging. That doesn't work for you.

                    What do you propose the federal government do about state/local gov't wasting federal revenue sent their way? You mentioned poor contract planning on public pension plans. I'd agree with that being subject to the same, simple risk/benefit analysis, and adjustment in federal funding. You can make the process transparent, limit the scope and power of the federal gov't., do all the other things that fiscal and constitutional conservatives claim they want for good governance. However, ignoring where federal money is spent, when it is being thrown down a rat hole, is poor governance. Any way you try to look at it.
                    First, what you are talking about (at least insofar as the example you gave) is not a "contract", it is public policy (tax credits, infrastructure spending, etc. etc.) - hence the reason the article you cite cannot easily give an accounting of it. Second, most of these deals (a more accurate term than "contracts") have little if nothing to do with federal funds, thus there is nothing for the federal government to "audit" or "review".

                    With regard to programs specifically funded by the federal government, and implemented by states, there are already audits and review, it is just that the things you are talking about (like the automaker example) have nothing to do with those. This is why I asked you for concrete examples, because it is now clear you are conflating two things which really have nothing to do with one another. You do it again in this post, the federal government has nothing to do with the funding of state and local pensions, so I do not know where you arrive at the notion that the federal government would have any oversight over it (other than establishing accounting rules similar to those imposed federally on the private sector).

                    Finally, I would argue that in most instances the federal government shouldn't be funding the things we are likely to find on a limited basis that meet your notion of "poor contract planning." Most of the things I suspect you are likely to end up talking about are not "contracts" that are federally funded in any way, but merely poor state and local public policy choices you want to empower the federal government to second guess.

                    As a constitutional conservative, I would argue that most of the "federally funded" things are things that the federal government shouldn't be funding at all, that these generally tend to be matters that are best left to the states to choose whether or not, and how to do (and to fund themselves).

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                    • Originally posted by Marcus1124 View Post

                      First, what you are talking about (at least insofar as the example you gave) is not a "contract", it is public policy (tax credits, infrastructure spending, etc. etc.) - hence the reason the article you cite cannot easily give an accounting of it. Second, most of these deals (a more accurate term than "contracts") have little if nothing to do with federal funds, thus there is nothing for the federal government to "audit" or "review".

                      With regard to programs specifically funded by the federal government, and implemented by states, there are already audits and review, it is just that the things you are talking about (like the automaker example) have nothing to do with those. This is why I asked you for concrete examples, because it is now clear you are conflating two things which really have nothing to do with one another. You do it again in this post, the federal government has nothing to do with the funding of state and local pensions, so I do not know where you arrive at the notion that the federal government would have any oversight over it (other than establishing accounting rules similar to those imposed federally on the private sector).

                      Finally, I would argue that in most instances the federal government shouldn't be funding the things we are likely to find on a limited basis that meet your notion of "poor contract planning." Most of the things I suspect you are likely to end up talking about are not "contracts" that are federally funded in any way, but merely poor state and local public policy choices you want to empower the federal government to second guess.

                      As a constitutional conservative, I would argue that most of the "federally funded" things are things that the federal government shouldn't be funding at all, that these generally tend to be matters that are best left to the states to choose whether or not, and how to do (and to fund themselves).
                      Your position depends on the state and local gov't. funding themselves, rather than accept the roughly 20% of financing from federal sources. They would not do not do this, even during the more conservative political regimes in recent history. One example, Texas:
                      https://comptroller.texas.gov/econom...al-funding.php

                      That is wading deep into the weeds, but it always requires due diligence in managing finances. I'm all for gov't. reducing their spending, on all levels. That means doing many things differently, including serious changes in what we expect from every sector of the free market economy and ourselves, as well as the government. I would hope a practical conservative would first try to minimize federal funding of state and local government, as you state. Maybe that will happen some time in the future -I'm of the opinion it will be the more distant future due to political dependence. In any case, the operating rule is management of finances. The larger the sum, the more important it is to account for it's proper spending. It will never be possible to completely disconnect federal funding around state/local gov't. issues (fe emergencies, interstate conflicts and rectifying widespread state corruption). Consider the problems with poor pension planning or poor planning with incentives for MNC's as "widespread corruption". Both issues cost billions of dollars, so they will have an effect across state lines. You can minimize the cost the federal gov't. needs to spend on those issues, but the cost of preventing that kind of damage is much lower than repairing it.

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                      • Originally posted by radcentr View Post
                        Your position depends on the state and local gov't. funding themselves, rather than accept the roughly 20% of financing from federal sources. They would not do not do this, even during the more conservative political regimes in recent history. One example, Texas:
                        https://comptroller.texas.gov/econom...al-funding.php

                        That is wading deep into the weeds, but it always requires due diligence in managing finances. I'm all for gov't. reducing their spending, on all levels. That means doing many things differently, including serious changes in what we expect from every sector of the free market economy and ourselves, as well as the government. I would hope a practical conservative would first try to minimize federal funding of state and local government, as you state. Maybe that will happen some time in the future -I'm of the opinion it will be the more distant future due to political dependence. In any case, the operating rule is management of finances. The larger the sum, the more important it is to account for it's proper spending. It will never be possible to completely disconnect federal funding around state/local gov't. issues (fe emergencies, interstate conflicts and rectifying widespread state corruption). Consider the problems with poor pension planning or poor planning with incentives for MNC's as "widespread corruption". Both issues cost billions of dollars, so they will have an effect across state lines. You can minimize the cost the federal gov't. needs to spend on those issues, but the cost of preventing that kind of damage is much lower than repairing it.
                        Just as I suspected, you are conflating things. For those things which the federal government provides funding for, there are already audit structures in place. What you are talking about is the federal government punishing states for doing things in areas that are completely outside the scope of the federal governments delegated powers by withholding unrelated funds. It is none of the Federal Government's business what tax incentive deals state or local governments enter into to entice businesses to locate within their geographic areas. It is a basic violation of federalism to have the federal government use unrelated funding to punish states.

                        I think you have a fundamental misunderstanding of what constitutes conservativism. Conservatives believe in limited, diffused government power. Within the federal structure this is embodied in our separation of powers among the three branches, and even the split of the legislative power between the two houses of Congress (as originally intended, the Senate was meant to represent the interest of the states as sovereign entitities, which is why Senators were selected by the state legislatures and not by popular vote). The whole of the federal power is limited to the enumerated powers, with all other remaining traditional "police" powers of the state left to the states (federalism). Now, the fact that federalism has largely been weakened by improper interpretation of Constitution (primarily the commerce clause) and constitutional amendment (direct election of Senators), does not, for a true conservative, argue for further weakening federalism by permitting the use.

                        Incentives for MNCs are not in and of themselves "corruption" (just because you disagree with it as a matter of public policy does not make it "corruption"). Let's go back to the example of sports franchises (which also demonstrates perfectly the fundamental difference between the purpose of business and the purpose of government). Businesses exist to make money or to achieve the broader goals of its owner(s), and large, publicly held companies primary fiduciary purpose is to maximize value for shareholders. Government, on the other hand, does not exist to just "maximize value", it is there to also reflect and codify the values of its citizens. A ball team that is willing to move to my city if the city/state picks up the tab for the construction of a new stadium is simply maximizing value for its owners. That the city and state decide to build a public stadium for use by the team is not "corrupt". While it is almost, if not always, bad public policy from a fiscal point of view, it may very well reflect the values and priorities of the community (who may overwhelmingly support whatever it takes to get a team). While I oppose these things as a matter of principle, I also oppose as a matter of principle, the federal government using its appropriate powers in other areas to exceed its enumerated powers to effectively blackmail states to conform to a set of preferred policy actions. What is the limiting principle for what areas of public policy the federal government deems to be "corrupt" (actually not, more unwise) can be effectively punished by the federal government to discourage state governments. Does it apply to union contracts, overly generous pensions specifically(which are far more devastating over time to state's fiscal health than any tax credits or infrastructure spending to lure businesses)?
                        Last edited by Marcus1124; 08-29-2018, 08:25 AM.

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                        • Originally posted by Marcus1124 View Post

                          Just as I suspected, you are conflating things. For those things which the federal government provides funding for, there are already audit structures in place. What you are talking about is the federal government punishing states for doing things in areas that are completely outside the scope of the federal governments delegated powers by withholding unrelated funds. It is none of the Federal Government's business what tax incentive deals state or local governments enter into to entice businesses to locate within their geographic areas. It is a basic violation of federalism to have the federal government use unrelated funding to punish states.

                          I think you have a fundamental misunderstanding of what constitutes conservativism. Conservatives believe in limited, diffused government power. Within the federal structure this is embodied in our separation of powers among the three branches, and even the split of the legislative power between the two houses of Congress (as originally intended, the Senate was meant to represent the interest of the states as sovereign entitities, which is why Senators were selected by the state legislatures and not by popular vote). The whole of the federal power is limited to the enumerated powers, with all other remaining traditional "police" powers of the state left to the states (federalism). Now, the fact that federalism has largely been weakened by improper interpretation of Constitution (primarily the commerce clause) and constitutional amendment (direct election of Senators), does not, for a true conservative, argue for further weakening federalism by permitting the use.

                          Incentives for MNCs are not in and of themselves "corruption" (just because you disagree with it as a matter of public policy does not make it "corruption"). Let's go back to the example of sports franchises (which also demonstrates perfectly the fundamental difference between the purpose of business and the purpose of government). Businesses exist to make money or to achieve the broader goals of its owner(s), and large, publicly held companies primary fiduciary purpose is to maximize value for shareholders. Government, on the other hand, does not exist to just "maximize value", it is there to also reflect and codify the values of its citizens. A ball team that is willing to move to my city if the city/state picks up the tab for the construction of a new stadium is simply maximizing value for its owners. That the city and state decide to build a public stadium for use by the team is not "corrupt". While it is almost, if not always, bad public policy from a fiscal point of view, it may very well reflect the values and priorities of the community (who may overwhelmingly support whatever it takes to get a team). While I oppose these things as a matter of principle, I also oppose as a matter of principle, the federal government using its appropriate powers in other areas to exceed its enumerated powers to effectively blackmail states to conform to a set of preferred policy actions. What is the limiting principle for what areas of public policy the federal government deems to be "corrupt" (actually not, more unwise) can be effectively punished by the federal government to discourage state governments. Does it apply to union contracts, overly generous pensions specifically(which are far more devastating over time to state's fiscal health than any tax credits or infrastructure spending to lure businesses)?
                          Block grants have been diverted for general needs. That category doesn't lend itself to an audit. Link:
                          "Block grants' basic structure makes them especially vulnerable to funding reductions over time," the CBPP found. Although the grants are typically tied to requirements that states maintain the programs at historical levels, it's easy for them to divert the money for other purposes, including filling in their general budgetary needs.
                          http://www.latimes.com/business/hilt...tmlstory.html#
                          That is an unfortunate fit between political dependence on the federal gov't. and pandering for votes at the state level -this one with a GOP twist.

                          I think I understand your view of a constitutional republic, and I agree with the general principle of separation of powers extending to the relationship between the state and federal level. My understanding of your position on legal (eg criminal code) requirements to apply, before the federal level comes down on state officials is also a good objective. I'd agree that the constitution has been distorted on that point, which is why I used the term "political dependence". That describes a relationship between states and federal levels which should be much less dependent.

                          That being said, I think there is a way for the federal gov't. to attempt a consequence for extremely poor financial behavior at the lower levels of gov't. That would be in addition to their expected correction for serious cases of widespread (and unanswered) criminal behavior by officials in a given state. That correction does not need to involve any criminal proceedings, nor should it involve anything like a "tort action" in a court of law. It should involve the federal gov't. -the Congress- using a common financial tool (a CBO audit) to describe damages of X billion dollars, which requires an adjustment of federal dollars going to state Y. There is no regulation needed; it should be financial policy only when a given state incurs damages above X (a very large) amount.

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                          • Originally posted by radcentr View Post
                            Block grants have been diverted for general needs. That category doesn't lend itself to an audit. Link:
                            http://www.latimes.com/business/hilt...tmlstory.html#
                            That is an unfortunate fit between political dependence on the federal gov't. and pandering for votes at the state level -this one with a GOP twist.
                            The claim that block grants are "converted" is based not on the reduction in actual spending, but the failure to increase over time as it might have under pre-block grant policy (making the assumption that faced with ever escalating costs the federal government would not have reduced the rate of increase of authorized spending as well). Besides, this is the whole point of block grants, to give states greater control, and the federal government less.


                            Originally posted by radcentr View Post
                            I think I understand your view of a constitutional republic, and I agree with the general principle of separation of powers extending to the relationship between the state and federal level. My understanding of your position on legal (eg criminal code) requirements to apply, before the federal level comes down on state officials is also a good objective. I'd agree that the constitution has been distorted on that point, which is why I used the term "political dependence". That describes a relationship between states and federal levels which should be much less dependent.
                            My point on the criminal code is with regard to "corruption", you conflate real corruption (for which there are already state and federal criminal statutes to punish real quid pro quo corruption), and what (in your opinion) is bad policy which you simply define as the result of corruption, when in fact it is simply policy you disagree with (and we may very well agree that it is bad policy, but that is a far more subjective assessment than real quid pro quo, pay-to-play, corruption).


                            Originally posted by radcentr View Post
                            That being said, I think there is a way for the federal gov't. to attempt a consequence for extremely poor financial behavior at the lower levels of gov't. That would be in addition to their expected correction for serious cases of widespread (and unanswered) criminal behavior by officials in a given state. That correction does not need to involve any criminal proceedings, nor should it involve anything like a "tort action" in a court of law. It should involve the federal gov't. -the Congress- using a common financial tool (a CBO audit) to describe damages of X billion dollars, which requires an adjustment of federal dollars going to state Y. There is no regulation needed; it should be financial policy only when a given state incurs damages above X (a very large) amount.
                            I will start with a famous phrase - "The road to hell is paved with good intentions". Sure, the federal government CAN punish states for "poor financial behavior", but the problem there is two fold. First, it is simply not a power the federal government has been granted, the only way to do so is to have it abuse its enumerated powers (which violates basic principles of federalism). Second, this takes me back to you conflating poor "financial" behavior and poor POLICY decisions. I think if you are honest with yourself you will come to realize that what you consider "poor financial behavior" is largely what you consider to be bad policy choices. We live in a representative democratic republic, financially unsound behavior by government may very well be consistent with the policy preferences and values of the people. Again, I think funding stadiums is stupid and objectively bad economic and fiscal policy, but I also recognize that in many instances, most voters still want the stadium if it gets them a local sports franchise. Sure, the federal government could do things to punish state and local policies for doing what I consider bad policy, but it would nonetheless be an inappropriate abuse of federal powers.

                            Now, that does not mean that there are not a lot of existing policies which the federal government can get rid of that lessen the accountability of these decisions to the state and local governments. Unwinding policies that insulate states from the cost and consequences of their poor policy decisions is something we should do. The most recent tax reform/cuts took a huge step in that direction by capping the deductibility of state and local taxes (which essentially forced lower tax states to subsidize higher tax ones at the federal taxation level). We ought to get rid of the deduction entirely, as well as exemptions for municipal bond interest income.

                            FEMA is another area where there is some implicit subsidization. The entire grant portion of FEMA should be converted into long-term adjustable rate loans (based on the Fed funds rate) to the states, so that in the long term, each state is actually on the hook for the FEMA funds it receives, but no state is left without access to funds in an emergency.

                            And the biggie, is that the Federal Government should avoid taxpayer bailouts when the inevitable consequences of bad state and local policy can no longer be avoided (if a state can't afford its pension obligations, not a single penny of federal taxpayer funds should go to supplement them).

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                            • Originally posted by Marcus1124 View Post

                              The claim that block grants are "converted" is based not on the reduction in actual spending, but the failure to increase over time as it might have under pre-block grant policy (making the assumption that faced with ever escalating costs the federal government would not have reduced the rate of increase of authorized spending as well). Besides, this is the whole point of block grants, to give states greater control, and the federal government less.




                              My point on the criminal code is with regard to "corruption", you conflate real corruption (for which there are already state and federal criminal statutes to punish real quid pro quo corruption), and what (in your opinion) is bad policy which you simply define as the result of corruption, when in fact it is simply policy you disagree with (and we may very well agree that it is bad policy, but that is a far more subjective assessment than real quid pro quo, pay-to-play, corruption).




                              I will start with a famous phrase - "The road to hell is paved with good intentions". Sure, the federal government CAN punish states for "poor financial behavior", but the problem there is two fold. First, it is simply not a power the federal government has been granted, the only way to do so is to have it abuse its enumerated powers (which violates basic principles of federalism). Second, this takes me back to you conflating poor "financial" behavior and poor POLICY decisions. I think if you are honest with yourself you will come to realize that what you consider "poor financial behavior" is largely what you consider to be bad policy choices. We live in a representative democratic republic, financially unsound behavior by government may very well be consistent with the policy preferences and values of the people. Again, I think funding stadiums is stupid and objectively bad economic and fiscal policy, but I also recognize that in many instances, most voters still want the stadium if it gets them a local sports franchise. Sure, the federal government could do things to punish state and local policies for doing what I consider bad policy, but it would nonetheless be an inappropriate abuse of federal powers.

                              Now, that does not mean that there are not a lot of existing policies which the federal government can get rid of that lessen the accountability of these decisions to the state and local governments. Unwinding policies that insulate states from the cost and consequences of their poor policy decisions is something we should do. The most recent tax reform/cuts took a huge step in that direction by capping the deductibility of state and local taxes (which essentially forced lower tax states to subsidize higher tax ones at the federal taxation level). We ought to get rid of the deduction entirely, as well as exemptions for municipal bond interest income.

                              FEMA is another area where there is some implicit subsidization. The entire grant portion of FEMA should be converted into long-term adjustable rate loans (based on the Fed funds rate) to the states, so that in the long term, each state is actually on the hook for the FEMA funds it receives, but no state is left without access to funds in an emergency.

                              And the biggie, is that the Federal Government should avoid taxpayer bailouts when the inevitable consequences of bad state and local policy can no longer be avoided (if a state can't afford its pension obligations, not a single penny of federal taxpayer funds should go to supplement them).
                              The point about the stadium subsidy (or outright gift) is a valid one. Especially if there is a local voter referendum on a potential boondoggle, the locals need to be on the hook for the cost.

                              You get very close to my point in the last sentence, "And the biggie, is that the Federal Government should avoid taxpayer bailouts when the inevitable consequences of bad state and local policy can no longer be avoided (if a state can't afford its pension obligations, not a single penny of federal taxpayer funds should go to supplement them)." When conservatives make certain that grants to states are transparent, while reducing the list of grants to something that more closely resembles constitutional restrictions, you will be able to minimize those taxpayer bailouts. Avoiding block grants used as "general funding" might be too expensive to sweat the small stuff, but there must be a proper reaction for the worst (high dollar) cases of incompetence at the state level. That would get a lot of support from liberals like me who would easily add "bad pension management" with "bad corporate incentive management", to a federal revenue sharing reform bill.

                              Supposing conservatives opened up barriers to non-profit, non-gov't. operations, that would potentially expand jobs with lower risk employers, and we could find a structural correction to the problem of sketchy incentives for MNC's locating (temporarily) in a given county. If jobs with a temporary employer are further down on the list of priorities, that would place a lot less pressure on local gov't. to offer incentives of dubious value.

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