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