Links - Unintended <> Unforeseeable

Failure is often a policy choice.

I’ll begin this links post with an aphorism: The world you live in is perfectly calibrated for the policies you have chosen.

Imagine you’re driving and currently stopped at a red light. The light turns green; so you press your foot down—without having moved it from the brake. Obviously, nothing happens aside from the car behind you honking. You get anxious; so you press even harder—still on the brake.

Despite your intentions, your actions did not lead to the desired outcome. It was a mistake on your part that left your car annoyingly stopped at a green light. You took an action (chose a policy, if you will), and the resulting outcome matched it perfectly.

Keep that in mind as you read on.

Let’s begin with Michael Munger who coins a phrase: Trouble Tax. It refers to the difficulty that acts as an extra burden when dealing with government bureaucracy and how the bureaucracy doesn’t see it the same as a direct tax.

“Trouble tax” is a pithy name for this ubiquitous problem. We all have endured this phenomenon with sadly too often the response being, “Well, what are ya gonna do?”

Munger writes,

It is easy to think of examples. You are trying to enter the country, after a trip abroad. There are only two stations open at the passport control barrier, and hundreds of people in line. Now, the government could easily hire more passport agents, but that would cost money. Instead, a terrible “trouble tax” is imposed, as people have to wait in line for more than two hours just to have a bureaucrat spend 30 seconds looking at a passport and waving you through. (This happened to me in Charlotte this year: there were literally two agents working. We were told “there is a shortage,” as if that were an explanation for indifference to citizens’ needs). Other places, including Dulles Airport in Virginia, may even be worse!

Each of the hundreds of people in line, many of whom missed their connection, would happily have paid $10, or $20 (I would have paid $50!) to have a ten-minute line instead of two hours. The extra $1000’s in revenue would easily have paid an hour’s salary and benefits for five more bureaucrats to process passports. This is a “government failure,” because the outcome is Pareto inferior — the new bureaucrats would be better off being paid, and the customers would have been happy to pay. Yet the transaction fails to take place, resulting in what economists call “deadweight loss.”

This kind of failure is epidemic in our current system of government, and it’s getting worse fast. A friend who has young children recently recounted his experience getting “school supplies” (an experience parents all over the US can identify with). Parents were given a specific, mandatory list of items: the pencils needed to be of a certain type, the notebooks had to have specific dimensions. No single store had every particular item required, so my friend had to go to multiple stores to buy just a few items at a time.

The parents of all 30 kids in the class each had to go on this tiresome search and purchase quest, spending hours that they would have paid to avoid. Why doesn’t the school buy these items, of the correct type and in bulk, and then distribute them on the first day of class?

The diligent school-shopper wrote in an email: “Sure, this would cost money. But they could send me a bill! Or raise my taxes by whatever amount that offsets the cost. It would surely be socially efficient to allow a procurement specialist to take care of this, rather than outsourcing it to hundreds of families” in the whole school.

Look: the money cost is the same, either way: the parents are paying for the supplies. Either they pay directly, to the retail store, or they pay taxes which fund purchase of the supplies. (Actually, since having the school buy in bulk is cheaper, the tax cost would be less, but let’s ignore that, and call it even).

The explanation is obvious, and it illustrates why the use of bureaucracy as a means of provision of services is so inefficient, and frustrating: the burden of the costs is different for the government, and the citizens! Citizens pay both the money price, and the toil and trouble of acquiring the needed permission or service. But the bureaucracy only counts the money cost, because they only care about their “budget.” That doesn’t make them bad people, but they are drawn that way, because all the incentives are to save on budgets.

In many areas of government, this has led to a doom loop: tax cuts reduce funding, funding reduces service, and lack of service imposes a very large “trouble tax” on citizens. Citizens would love to pay more taxes to avoid the trouble, but that option is not available because government is not a competitive system where a competitor can enter and offer better service for a lower total (toil plus trouble) cost.

The example of school supplies is a great one for me as it is a nice microcosm of the abject failure of government-run public education. I have always used it as a way to point out this government failure. What other business asks the customers to provide needed supplies in this manner? Well, none in the completely private sector. The objection that this happens at privately-provided public schools (I say “public” because these too are open to the public) shows just how dominant government schools are in this space—private schools cannot reach the necessary economies of scale and/or the norm is too engrained because of government-school dominance. So, we as parents simply take this as a given. After all, what are ya gonna do?

Notice how the concept of the “trouble tax” pushes back against the first instincts of reformers generally and Musk/Ramaswamy/Trump’s DOGE specifically. Cutting the government workforce is not necessarily a clear route to efficiency. We may need more government workers to get better, more efficient government as well as less fraud in government. We may also need more to get less government altogether, but that is a different aspect of the issue.

Next and since I brought up education, Michael Strong raises a very important and overlooked attribute regarding school choice.

In the fight against large, one-size-fits-all government schools low-security prisons we should look beyond comparisons of test scores. Test scores are an important metric, but they are just one of many important metrics. Wellbeing is also one, and one where there is a greater chance of differentiation come improvement.

When it comes to test scores, it is not surprising that average scores won’t differ much. When it comes to test scores and basic learning, we need to consider the benefits to all students (the best and the brightest, the very large middle, and those who need the most help including the most unique approaches). So everything from maximizing for the elite as well as maximin objectives are desired. This runs parallel to wellbeing, and this is where choice really matters.

Strong writes,

Based on that experience, for the past decade I’ve been looking at research showing the various ways in which small, high-touch learning environments may be more beneficial for student mental health than are large, impersonal public schools.

In the meantime, most school choice debates have centered around test score outcomes. When parents choose schools, are test scores generally higher or lower? Choice advocates cite studies showing that choice results in higher scores, while choice opponents cite studies showing the opposite.

But having worked on the front lines for so long, I know that much graver issues are at stake. The statistics above are from a rigorous study showing that pediatric suicides are much higher during the school year than they are in the summer. This seasonal pattern of suicides stops at age 18, showing a distinct association with schooling. The obvious spike on Mondays is another signal that going to school is associated with dying by suicide.

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Under “Practices to Avoid,” the aforementioned brief has the good sense to note that caring cannot be mandated:

School connectedness can’t be mandated or coerced.

If so, perhaps we should allow families to choose learning environments where children DO feel connected? But no, in the literature on “school connectedness,” which is entirely focused on public school interventions, I never see any awareness that school choice, including homeschooling and microschools, might just address the entire issue.

Wellbeing is an elusive concept for the government and the policy hammers it wields. Case in point comes in our next link from David Bier discussing threats to law enforcement and citizens generally in regard to immigration policies.

The swinging pendulum of immigration policy is tricky. It would likely surprise Trump supporters who believe his advocated policies are desirable from a safety standpoint that those policies would greatly reduce safety. And this isn’t theoretical. It happened under Trump the first time, and that includes in comparison to Biden. Sadly, I’m sure those supporters would wish this away fingers in their ears saying, “nah, nah, nah, this is fake news.”

It is not. From Bier’s Congressional testimony:

We saw how that played out during four years of Trump, who removed the requirement to target criminals on his first week in office.

He doubled arrests of noncriminals—pizza delivery drivers, domestic violence victims, and spouses of US citizens.

He released these criminals, many with violent histories, while Immigration and Customs Enforcement released twice as many convicted criminals as Biden has.

Trump separated families and prosecuted parents, which US attorneys said allowed sex offenders to go free.

When you’re only interested in deporting as many people as possible, you’ll downplay public safety.

As a result, the number of criminals trying to enter illegally tripled to record highs under Trump.

Yet again we see that there are no solutions, only tradeoffs. Like air in a balloon, squeezing in one place leads to expansion in another. Focus on just the expansion, and you will likely be left confused if not frustrated. The last link makes this point. Scott Sumner discusses the roots of debanking:

If we sincerely wish to reduce the problem of debanking, deregulation would be far more effective than additional regulation. Legalize drugs. Abolish deposit insurance. Eliminate rules that cash transactions larger than $10,000 must be reported to the government. Replace the income tax with a consumption tax.

Recently the social problem du jour has been debanking. The root of the problem, as Sumner identifies, is that it is a byproduct of various desired policies. We’ve chosen and refused to change from a world of drug prohibition, convoluted tax policy, and insulation from financial risk. Anti-money laundering policies have deputized the financial industry into being the eyes and ears of financial cops. The results are predictable as well as awful. They may be accidental, but only in comparison to intentions (maybe). In comparison to design they match perfectly as cause and effect doesn’t care about intention.