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May 21, 2023·edited May 21, 2023Liked by Noah Smith

This sort of grift/corruption is exactly what Peter Turchin's elite overproduction model predicts. When your educated, quasi-elite, professional-managerial class grows too large, meeting their economic expectations is challenging. The consultant/NGO industry does exactly that. $200K for a lousy shade structure only looks like incompetence if you think designing a shade structure was the goal. I spent 7 years on the planning board for a mid-sized CA city; I saw this sort of grift in the environemntal / EIR consultants and the HR / diversity consultants all the time.

"I don’t think the U.S. is going to be brought down, as a civilization, by nonprofits wasting government money. It’s just one of many factors that appears to be a drag on our economic efficiency."

The economic effect is small, but the social effects are not. It's like the DOD's $800 toilet seats in the 80's -- economically it's puny, but it causes big waves in the pool of governmental trust and competence.

You fault conservatives for "just wanting to cut government spending", but can you really blame us for being cautious, Noah? We've been burned making "give us what we want and we promise to do better" bargains with progressives for decades. You can only make deals like that in a high-trust system, and based on past experience, we don't trust your side.

If you've decided the NGO-ocracy needs to be reigned in, we'll help with that. Then we can talk about the proper tasks of government. You might find many of us national-conservatives / populists quite a bit more amenable on that front than the establishment GOPers. But asking for more money before you reign in the NGO grift on your own side is going to be a non-starter with any stripe of conservative.

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"This sort of grift/corruption is exactly what Peter Turchin's elite overproduction model predicts." <-- Agreed, though it's more what *my* notion of elite overproduction predicts...Turchin thinks of elites a little differently than I do!

"The economic effect is small, but the social effects are not. It's like the DOD's $800 toilet seats in the 80's -- economically it's puny, but it causes big waves in the pool of governmental trust and competence." <-- Oh I agree, and that's why I think it's important.

"You fault conservatives for "just wanting to cut government spending", but can you really blame us for being cautious, Noah?" <-- I think there are certain priorities that are so important right now -- building housing, switching to green energy, and resisting China -- that we really can't afford to slash overall spending right now, though we can (and will) restrain it in many areas!

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2 out of those 3 you will get no argument from me on. As I said, you may find the populist GOP far more amenable to your priorities than the blue-blood GOP ever was. But we still care about efficiency and deficits. And we're tired of being on the receiving end of the Left's culture war. If the liberals want our help, you have to show us you take our concerns seriously. The Left has been calling us Nazis for decades, don't expect trust quickly.

Sorry for not giving credit to you as well. :-)

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"The Left has been calling us Nazis for decades, don't expect trust quickly."

Huh. When I went to college in 1982 (look, I'm just as surprised as you are), I was greeted by an acknowledgement in the welcome edition of the school newspaper that, despite the drinking age being 19 and it being legal to serve alcohol in the town, it was an offense worthy of expulsion to possess alcohol on campus. Among the reasons given for this was a quote from one J Fred Bucy, a regent who was also an executive at Texas Instruments: As long as I'm a regent for Texas Tech, there will not be alcohol on campus, because alcohol brings in elements of communism, liberalism, and socialism. (The fact that alcohol was very much available in the suites of the football stadium, which was very much on campus, went unremarked by him.)

All of which is to point out that the name-calling has gone on a long time, has gone both ways (there've been *two* Red Scares, after all, but yet there wasn't a "de-Nazification" after WWII despite there having been more than a few Nazi sympathizers in public life prior to the war).

If folks in the GOP don't want to be confused with Nazis, they may wish to be more accepting of voices in the public square that don't agree with their version of reality, and if they don't want to be called names, I'd observe that using "liberal" as a slur isn't a good way to go about that.

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I suspect your experience was reflective mostly of Texas. Mine in CA was very different just a few years later. We passed Prop 187 (anti-illegal immigration) while I was there and the vitriol was unbelievable.

I'm not sure what you mean about the right "being more accepting of dissenting voices in the public square". We don't control "the public square" and we haven't for a long time. The people stopping debate today aren't on the Right; just look at what happened to Scott Atlas, Abigail Shirer, Bari Weiss, and countless others who ran afoul of the Left's new speech codes / blasphemy laws. Look at how hard the establishment power structure has come down on Elon Musk for putting his money where his mouth is on free speech. Even down to the building department of San Francisco suddenly finding code violations in Twitter's headquarters which were curiously ignored when it was a vehicle of Leftist censorship.

Maybe there never was a neutral public square. Maybe there's always a moral order carried by the dominant power of the public square. And if that's the case, I have no problem stating that I prefer the moral order that doesn't fire people for refusing to take a largely untested vaccine and slice the private parts off teenagers in the name of liberating them from the oppression of their bodies. Apparently that belief is all it takes to be a Nazi today.

BTW: One of the problems with calling everyone who disagrees with you Nazis is it makes identifying real Nazis (who do exist but are vanishing small in number) essentially impossible. The Left uses the term to make their enemies seem more extreme, which works in the short term. However once people adjust and this linguistic blurring, it also makes the extreme seem more normal. And no one should welcome the even slight normalization of real Nazis.

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Wasn't the House Un-American Activities Committee originally set up in the 1930s to go after Nazi sympathizers?

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Seems to me like the solution is to limit government complexity/discretion as much as possible but that doesn't necessarily imply limiting total revenues. For instance, the government is great at programs like social security which only involve collecting taxes and writing checks.

IMO the spend less/spend more distinction misses the point if your worry is inefficiency/bloat. Indeed, if we were willing to just do more direct cash transfers a huge amount of complex regulations could just be ditched (enough UBI and no need for minimum wage, overtime laws, less need for OSHA, no need for means testing, rent controls etc etc).

Indeed, one of the biggest reasons for so much government bloat is that we are so afraid of taxing people we do something much worse: rather than paying them to eg not evict ppl during covid or to let grandma keep her cheap apt, we instead pass laws forcing them to do so as if that wasn't more invasive than taxing and spending directly.

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It was appalling that the US government treated renters as sacrosanct but landlords as disposable during COVID. 80% of residential rentals in America are owned by individuals, and 80% of them manage the property themselves. COVID was disastrous for these folks -- for almost 3 years they couldn't collect rent or evict but still had to pay both their own mortgage and the rental's mortgage! A far better way would have been a temporary voucher program (ala Section 8) that was available to any renter or landlord in the country.

If the robotics and machine learning guys are correct, the industrialized world is close to meeting most (50%+) human needs without human labor. That will be an amazing economic boom, but distributing that bounty fairly will require conservatives to accept large transfer payments, which will make liberals social engineering experiments harder for the reasons you identified. Doesn't seem like a bad tradeoff to me though. Maybe we can finally get that 15 hour workweek that John Maynard Keynes promised us back in the 30's.

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I think there a lot of issues where simpler is better, like you mentioned. And then there are other issues like medicine and transit where there is no simple way to just spend money and make the problem go away, and there’s really no solution except for building state capacity.

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May 21, 2023Liked by Noah Smith

I agree with the desire to increase state capacity but one reason non profits may get more funding from government is that the government can’t do much on its own without plowing through a thicket of regulations while you can just pay a non profit and they can do it for the government faster. A good example of this is Paperwork Reduction Act review by OMB. In order for a federal agency to collect data from more than 9 entities, they need to go through a full OMB review which can take years. Conversely, a funded non profit can work with the agency to collect the data and share it on a much faster timeline. So increasing state capacity is also going to need a lot of congressional action to make government better and that’s going to be really hard.

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That's a good point.

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The government buying an end-around the government is absurd (and well understood by any government employee who has also spent time in the private sector).

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For what it’s worth, private companies do this too: buying an end run around their own internal communication morass; it’s one of the main applications of consulting.

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May 20, 2023Liked by Noah Smith

When I started my job in USPS facilities 1983, almost all design and inspection work was in house ( USPS employees or contract architects - I and one other USPS employee were engineers) except large building or very large complicated remodels. In late 1984, our general manager went to DC for a meeting. He came back with an evangelical gleam in his eyes. He had been infested by the "Contract Out" disease. That was the beginning of a long slide into oblivion. Huge waste of money. I could turn around a $1,000,000 chiller project in a week or so. A consultant first got paid about 5% for a study, then 10% for design, then another 5% for support. You do the math. I was making about $6,000/month at the time.

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Sounds about right.

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Okay, I’ll do the math! The consultant made $200,000 and you made $1,500, a 133X difference.

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Think about how much money Jcarlet was saving us as taxpayers by doing the work in-house.

The $6,000 a month also meant that whatever expertise Jcarlet learned on the job, the USPS would have retained that design and inspection knowledge within the team. Since the salary was fixed, there would be no financial incentive by in-house workers to pad out the $1 million chiller project with billables, change orders, etc.

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May 20, 2023·edited May 20, 2023Liked by Noah Smith

I spent my career in academia and nonprofits. One of my executive directors used to say, "We're not for profit, but we're also not for loss." There is a definite growth-for-growth's-sake ethos in many nonprofits. More projects! More grant money! More staff! More! Our grant proposals were generally nice and plump.

I roll my eyes at friends who dreamily talk about quitting the rat race and working for a nonprofit. So you want to do the same kind of thing you do now, but without stock options? Okay.

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Or they bring their skill set and incentives set into a nonprofit and transform its culture. Like, someone from a sales background working in fundraising. Or, someone from real estate brought in to manage a capital campaign, leading to the "edifice complex". Or, someone from a hotel/hospitality management background put in charge of event planning.

Ostensibly, a nonprofit founded to solve a problem begins to take on the characteristics of the managers' previous for-profit backgrounds. Fundraising becomes a 24/7/365 endeavor and workers face things like revenue quotas and salesmanship techniques. Event planners bog down staffs in galas, banquets, raffles, auctions, junkets, etc.

The edifice complex is usually the most disruptive and destructive to an organization, especially when a building has to be constructed from the foundation up. Because of the high costs of a building, and the nightmares associated with architecture and construction and relocation, an edifice complex can have the most profound effect on an organization because so much work is devoted to justifying the existence of said building.

The edifice complex goes hand in hand with fundraising, because the most generous donors insist on the building named for them.

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It’s the party system first and foremost. Party strength and interest group strength are inversely related. We need to end the direct primary and push proportional representative apportionment in every legislature we can (the House but also state ones). Strong parties in a competitive multiparty system will internalize more of what’s been offloaded to the nonprofit/think tank industrial complex

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Jason McDaniel agrees...

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May 20, 2023Liked by Noah Smith

Not the way it works on European multiparty PR systems. Plenty of horse trading and patronage in those systems.

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Yeah but there's horse trading and patronage, and then there's the American interest group system.

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You think party gridlock is bad now? Parliamentary systems only enhance the power of parties. Madison's fear if parties was correct, if anything, he wasn't fearful enough. He rejected European style systems for a reason. We need to lean into him instead of away from him.

What I do want is ranked choice voting. It's easier to implement (no constitutional amendment) and provides much of the same benefit to smaller parties as a parliamentary system.

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Everything you said is wrong except for the part about parties being stronger. Madison wanted a president selected by Congress just like parliamentary ministers. Parliaments have less gridlock because the executive is just party leadership. Gridlock is not created by strong parties but by a fragmented legislative process.

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Also, the United States system is an example of how not to run a government. There's that joke that the U.S. never imposes our presidential/congressional system on other societies because we know our system doesn't work.

It's the fragmented legislative process. It's also the ludicrous amount of veto points, low voter participation rate, self-regulation of the three branches of government, weak political parties leading to interest capture, political parties reflecting negative polarization (45% of the voters in each party vote the way they do because they hate members of the other party), excessive power vested in rural areas, etc.

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It's not even a joke! It's just a fact!

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And yet we're the longest standing republic and the most powerful nation on Earth today. That terrible system has worked pretty well. I'm actually a post-liberal, guys. I think it's broken too. But the idea that a parliamentary system would be more stable? Have you looked at France?

Ranked choice voting could be done by initiatives at the state level and would weaken the lock the two major parties have on our election process. That seems like a win to me, regardless of your political stripes.

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A nearly 160-year chain of continuous government is no guarantee it's going to last another 160 years. Or looking at America's slow-motion societal collapse, even the next 160 days makes me nervous.

One of the reasons much of the democratic world has favored a parliamentary system is because it could accommodate minor parties, striking a balance between majority rule and minority representation. This does involve the trade-offs of much stronger parties than what Americans are accustomed to.

The upshot is that parliamentary systems usually deliver high voter turnout, partially because parties can directly engage voters in the way the Democrats and GOP won't or can't by law.

There's also a mathematical explanation of why America's first-past-the-post, presidential system leads to two parties: Duverger's law. Our basis of voting determines the two-party system, not any particular quality embodied in the Dems or the GOP.

Ranked-choice could be introduced in either the current or a parliamentary system, but there are many faults in U.S. governance -- Senate population disparities, House disparities making state vs. state representation unrepresentative, veto points, DC federal representation, the status of U.S. island territories, the self-regulation of chambers -- that are design flaws and can't be fixed by mere voting.

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I don't think we have any leaders smart enough to craft a better alternative today. Minor modifications... I'm up for that (hence ranked choice voting).

Major changes like what you're talking about require a Constitutional amendment. 1) That will never happen in today's environment. 2) Opening that can of worms with a polarized polity would be disastrous. Our leaders can't even agree how to keep paying the bills. Half of them think men can get pregnant. These people are going to rewrite the operating system for the oldest republic in the world? No thanks.

This is the same reason I am opposed to the Convention of the States initiative even though it's championed mostly by conservatives. Too dangerous. You can do that when you have a broadly shared moral order, when you agree on ends (the goals) and are arguing about the means to accomplish them. That's not us today.

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Nailed it! Particularly in regard to clientelism.

My estimate (from volunteering and serving in senior positions at NGOs that have received government grants is that about half of the grant money is wasted (often supplanting or unnecessary augmenting private, charitable donations to these NGOs) and none of the grant money (as far as I can see in CA) goes to organizations that aren’t led and staffed by “our kind of people” (from the perspective of California pols). There is also a revolving door between politics, NGOs and county/city bureaucracies.

In other words I am not sure that the answer is to hire a bunch of government employees to do the work directly (though at least they might be more accountable) but rather to go through the grants first with a fine-toothed comb to weed out about half and then set clear objectives for the other half.

Here is a great example- I volunteer with a group that harvests unwanted fruits and veggies from people’s gardens and yards as well as commercial (organic farms). Grants cover about half of our costs now- previously was 100 pct done off the back of volunteers and donations, the grants enabling us to buy trucks (previously used volunteer’s cars), rent office space and hire an expensive ED and half a dozen paid employees (originally most roles were volunteers). Figuring out the total costs of the operation divided by tonnage of fruits and veggies delivered (to food banks, etc) we would be better off simply giving the money directly to the food banks to purchase the fruit and veggies from overpriced organic farmers markets (or they could buy 3x as much at the grocery store or 5x as much from the USDA). But that would mean no politically connected ED, no army of foot soldiers for the pols, etc. Essentially the grants have enabled us to scale up the operation, but with zero gains in efficiency.

It would be very easy to deliver the same benefit for less.

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May 20, 2023Liked by Noah Smith

The people at that lamp post seem to be having a laugh at it.

So it is an elevate humour of the residents project and that is covered in the small print of the project objectives. So project was successful after all.

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The column I’ve been waiting 5 years for someone to write

Yes they do real damage to centre-left politics and yes they’re in it for the money and perks

And if you want a vision of how totally out of touch these ppl are then look no further than the fact they themselves tweeted out the stupid shade/light thing

This sort of stuff is what makes me angry there is no sane centre-right party in the US as stuff like this is exactly the kind of thing that justifies voting against the politicians who allow this kind of taxpayer money wastage to send a message for the party to return to sanity but sadly there is no way anyone can justify voting for Republicans at any level currently

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That's funny, Lee, since that almost exactly how conservatives feel about the Democratic Party. We could never vote for anyone who thinks men can get pregnant, women should share prisons and locker rooms with men, and babies can be ripped out of a womb at 38 weeks no questions asked.

I'm not trying to rag on you, just point out that each side has its share of "I can't ever vote for that" policies that the other side thinks are insane.

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Point me to one senior Democratic politician who’s advocated for no questions asked abortion at 38 weeks

Show me the Joe Biden policy that would put men in women’s prisons

I mean FFS man delete your Twitter and try going outside to get some friends or something, online politics is rotting your brain

Actually don’t bother replying, blocking u losers is easier it’s why I quit Twitter

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First, I think your reply is inappropriate and more along the lines of they type of hyper aggressive strawmanning that is common on Twitter.

I dont agree with Brian but I think it is also funny that he brings up multiple points and you select one to nightlight and then qualify it with “senior.” His general point is recognizable to anyone not blinded by partisanship.

I would recommend you take two steps back from you emotions when reply and keep it civil. Then think about the point the other person is trying to make. Then type your reply. I enjoy this environment as it is generally mature and would hate to see it wrecked.

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It is actually instructive no that you felt the need to make up positions senior Democratic politicians do not hold to make your point, as it serves to prove the point that Noah and I are making that the progressive activists do untold damage to Democrats as the party is linked in the public mind with the most extreme views of the most crankish activists

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Their justification for the shade lampposts is that anything bigger would require bringing in more departments and involves more permitting.

Dunno if it’s true, but that points to a whole host of different problems.

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Yes it is true, and not just for the permitting.

In California, we have the Self Esteem Thing.

In L.A. County, why are there 88 cities and four dozen transit systems? (No, really.)

The Bay Area is relatively saner, but you still have about three dozen transit operators serving about 10 counties.

Up the delta in Sacramento, you have a county transit system that does not serve the entire county, just the city of Sacramento and unincorporated areas (SacRT). The other incorporated cities run their own transit systems, and in two cases the cities' operations have been outsourced ... to SacRT. (In Elk Grove's case, RT apparently bid on a tender and managed to beat the incumbent private operator).

Up and down the state, you see thousands of examples of these special-purpose agencies, tiny cities, large but sparsely populated counties, three public higher education systems, some school districts "unified" (providing K-8 and high school) and others splitting lower and higher grades -- and a smorgasbord of these agencies are publicly elected, with truly abysmal voter participation rates.

Why? This is a consequence of everybody wanting Voice. Make a public agency too big, and not everyone gets Voice. So you create small agencies with narrowly defined tasks. Frequently, these agencies have to come together and work on something. But individuals within these agencies and their constituents have Voice, so each agency creates an organizational culture with its own Voice. And when organizations have to work together, they are incapable because each organization's Voice must be heard and negotiations break down over affronts to Voice.

These arguments are seldom substantive, because often times the substantive arguments are identical and the points of contention are about the performance of Voice: who gets to perform Voice, who was omitted or excluded from performing Voice, the time and place of the performance of Voice, the process of performing Voice (i.e., Robert's Rules of Order) ... and since this involved public entities, any breach of Voice is subject to litigation and appeal.

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Makes all the sense in the world for SacRT to manage Elk Grove.

Agree with what you say about Voice. Anytime I see a meeting invite that mentions "all stakeholders" I immediately know nothing is going to be accomplished. Too much veto power by people with the power to use it.

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The funny thing about the RT/Elk Grove thing ... it was a tender. The city put out an RFP for an operations contract, so all bidders had to submit a budget package and operations plan. City staff had to review it, then put it before the council for approval. The winning bidder turned out to be the publicly run transit system in the very same county that would essentially be an extension of what it does every day.

Are you thinking what I am thinking? Me: If this had been the outcome, couldn't city leaders have motioned to just give back the service to SacRT (apparently RT used to serve Elk Grove directly but the city broke away from the transit district to form e-Tran)? That would've saved a lot of time and some money.

I've also found a third instance where SacRT did something identical. Citrus Heights broke away from RT to have community-based fixed routes. Those are apparently replaced with microtransit (essentially, Uber with a dial-a-ride van that riders summon with an app and can use within the city limits) also operated by in-house SacRT drivers.

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SacRT also does the microtransit thing in Sac itself. Not surprised the public utility keeps coming out on top because Sac tends to have well-run utilities (SMUD is so much better than PG&E). Since SacRT also runs Folsom that's covers most of the county population. Looks like Galt and the Delta has its own South County Transit.

Maybe someday we'll see the light rail extend to Roseville but Placer County would probably mandate the last mile be done by Humvees.

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I'd like to see the light rail from Folsom extended west from downtown to West Sacramento and to UC Davis. This way, both of Sacramento's public universities are on a single line (does CSUS still run the campus shuttle to the light rail stop about 1 mile south of the campus?). Roseville would be the next priority, or at least right to the Sacramento/Placer county line. Always does seem off that it just ends randomly in a freeway median.

Also, put money into the freaking buses! People are begging for RT not to shut down at 9 p.m. Run everything till 1 a.m.

I thought I saw plans for one of the light rail lines to go to the airport. Drop that. The airport is in pasture.

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Causeway light rail would be nice but I'm sure it's not cheap to build on a wetland. They have a few buses that connect the UC Davis campuses but light rail to Davis would be great. They're eventually building a Broadway Bridge (maybe with a streetcar) and there was supposed to be some light rail thing connecting Old Sac to the ballpark in West Sac, but that's just not the same.

The airport line isn't super high yield but maybe they're trying to connect some of North Natomas, especially with the redevelopment at the Arco Arena site. Ashby would certainly be pushing for it in the legislature.

Not sure about the CSUS shuttle.

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Pedantic update: Apparently the Elk Grove e-Tran bus system ceased to exist in 2021. SacRT has direct control of the local and commuter routes. That actually makes sense from an organizational perspective.

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For me, it’s infuriating. Growing up in Denver in the ‘50s and ‘60s the state government performed its own functions. For a while my mom worked for the state highway department. The roads and highways were, for the most part, designed and built by the state. They encapsulated the knowledge and skills needed to perform their jobs. Over time, more and more of the functions were privatized. This was probably due budget constrains (often caused by various ballot initiatives), that encouraged the state to outsource jobs to save on salaries and pension benefits. When a recession came, road maintenance was reduced, leaving state employees temporarily superfluous. Thus, the state was stripped of skills and expertise to build and maintain the roads with state employees. This process has denuded state and local, and in many cases the federal governments of the knowledge and expertise to do their jobs. In the end, the contracting process yields overly expensive, suboptimal projects.

But, of course, I could be wrong.

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Interesting you bring up Denver.

On Alon Levy's blog Pedestrian Observations, who echoes a lot of Noah's themes in this post, there is a transit engineer who comments on it named Rynerson.

He noted that RTD, the state-level transit agency that serves the Denver metropolitan area, has a mandate to outsource a certain percentage of its bus service to private contractors. The RTD also has a staff of in-house bus drivers, who also operate the light rail trains.

The private contractors are substantially cheaper than the in-house RTD drivers. What Rynerson noted was when he compared the productivity of private vs. in-house workers.

The in-house drivers, in addition to light rail, get to work on the high-ridership services in central Denver; the private contractors get the low-ridership routes in the suburbs. The in-house drivers cost more in compensation, but are at least twice as productive as the contractors. (The suburban routes have low passengers/hour; central Denver routes have high pax/hour). The light rail drivers, for a slight bump in pay for the most senior drivers, do the work of 3-4 in-house drivers per hour.

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Really would love an informed take on how you incentivize government jobs (and therefore work output) not to suck. I’m really worried that the fact that stingy taxpayers hold the purse strings on salaries and whatnot, combined with old fashioned bureaucratic, thinking, no clear goals for departments, constantly shifting political leadership, slow iteration time, etc can be made to work. Like you need to be able to have an in-house engineering team at the DMV that is at least as good quality (and at least as exciting to work for) as the average modern company’s.

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Was a non-profit responsible for New York City’s plan to deter shoplifting with those in-store kiosks? What an embarrassment for Mayor Adams, a former cop.

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Most likely it was some stupid, mandatory “stakeholder consultation” that involved a social services department. At least that’s what my $.02 is on.

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New Yorkers preferred Adams to Maya Wiley, big time, partly because he was a cop, and he sounded like a string leader. I voted for Garcia, but was hopeful when Adams won.

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He won by 7,000 votes. Not preferred big time at all. He is also stranger and more corrupt than any of us imagined.

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This hits the nail on the head, and I suspect the local governments I work with would largely agree this is not a desirable equilibrium to have non-profits be the funnel for large swathes of government money. Their argument, taken at face value, is two-fold:

1. Hiring is anemic, and really hard. They've tried to spend money by creating brand new departments that cost $10s of millions over 3 years to do new, transformative work. They can't get it off the ground because they can't hire the seed executive directors who have the vision to execute on that new department, much less the 50 staff to actually build it out. Payscales are uncompetitive, the labor market is tight, and a combination of unions and public opinion mean that it's very hard to increase pay. Bureau of human resources feebleness are the great unappreciated suck for why ARPA hasn't yet produced great change.

2. The time-limited vision of federal funds. I don't for sure based on a 5 minute scan, but La Sombrita is redolent of an ARPA project. At its heart, LA has received money where the government must know where it's going by the end of 24, and must be fully spent by the end of 26. One central dynamic is that the short time horizon means that governments are not incentivized to cut costs, and the mindset is that it is better to spend on projects with potentially poor results than to send a single dollar back to the Treasury. Because of 1), non-profits are the only avenue with enough capacity to help bring initiatives into existence. And it really doesn't make sense to hire many people in 23 you'll have to let go in 26, or keep on at a cost to your unrestricted local dollars and create a fiscal cliff. I think many places would have taken a bargain where ARPA was cut by 20% but with a much longer spending horizon.

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As someone who has lived in and around San Francisco most of my life, kudos for blowing up their waste and fraud.

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I’ve seen this in my work in a large public psychiatric hospital. All of the care teams which follow patients once they’re discharged are run by politically connected non-profits and their results are highly variable. In addition medical records are entirely siloed from each other. It’s a nightmare.

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Isn't this kinda a return to a spoils system in politics? In effect, by giving government money to non-profits progressives have a way of funnelling taxpayer money to their own base.

I mean sure, maybe the money is spent inefficiently but I'm not sure the incentives favor fixing the problem for progressives. If they use the money to fund city workers then they don't help build an institutional progressive base and future, less progressive, administrations could use their control over city government to put that capacity to use for less progressive ends. If they send the money to a non-profit those future administrations are kinda stuck. Those organizations aren't going to help achieve goals progressives oppose meaning that to steer the ship of state in another direction requires building out a bunch of government infrastructure. If that future admin tries to yank bank funding from the nonprofits progressives can blame them for the gaps in services and if they keep that funding then they can point to the temporary increase in spending in the next election.

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City workers are usually a pretty good institutional progressive base as well. But individual city workers usually don't become local political power players, the way heads of non-profits can (like for instance, Michael Weinstein, head of the AIDS Healthcare Foundation, and Out-of-the-Closet thrift stores, who used his power to support a ballot measure mandating condoms in porn, and then to support anti-development initiatives to keep real estate in Hollywood expensive).

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Are they a progressive base or democratic base? I suspect the later (union workers are often more socially conservative).

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They have money and match their ideology to the political structure in place.

Last year in Los Angeles, Rick Caruso, the developer of high-end shopping malls and the most expensive apartment complex in L.A. (the penthouse includes a personal shopper who will buy groceries at the ground-floor Trader Joe's for you) came very well close to buying himself the mayorship.

He had been a Republican, who then changed to no party affiliation and then Democratic to align with his mayoral ambitions. His record as a developer showed none of the usual genuflections toward the L.A. philanthropic gatekeepers.

Caruso is also easily recognizable. He could go to a dog park on the weekend and be dressed like a midcentury mafia attorney.

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