February 27, 2004
The Paradox of Politics
The next person who occupies the Governor’s chair at the statehouse inIndianapolis will inherit a situation that borders on crisis. The surplus is gone, spending is eclipsing revenues, and operating cash reserves are dangerously thin. So why are some candidates and legislators touting new spending commitments?
The answer, of course, is quite obvious. They are courting the voters. Successful politicians have long ago learned that some messages are best not delivered to the electorate. The candidate who pledges to freeze, or even roll back, all existing spending programs and suspend all new ones will be shunned in favor of the challenger who envisions growth and prosperity.
I call it the paradox of politics. The people running for office are not stupid. They know what is, and what is not feasible, for state government to accomplish in its current fiscal state. But the fear of delivering an unpleasant truth to the voters makes them say things that are, well, stupid. Or, to be more polite, so fuzzy as to be indecipherable.
Take the proposals to enact strict spending caps on state budgets. They resonate well with voters who want to see state government live within its means. But try to pin down a proponent of spending caps on what they imply for education spending, and things get fuzzy. Of course, they may say, they are not real cuts, just slower growth. And of course, they may add, they are committed to quality education.
Education spending accounts for 57 cents of every dollar of General Fund expenditures. Simple arithmetic says you can't enact a meaningful cap on total spending without cutting -- or slowing the growth, if you will -- spending on schools and universities. But the candidate who connects those dots becomes cannon fodder for those demagogues who equate responsible fiscal management with short-changing children and selling out the future.
There's another connection that those running for office seldom make out loud. That's the one between government efficiency and government jobs. If, for example, we allowed car dealers to carry out many of the routine functions of the Bureau of Motor Vehicles, should the existing BMV be left intact? Where is the cost saving in that? Administrative costs are dominated by personnel costs, and those costs are only reduced when jobs are eliminated.
The same can be said for the now-untouchable issues of procurement and outsourcing in state government. No candidate who is serious about improving efficiency and cutting the cost of state government can truthfully say that an "Indiana first" policy in granting contracts and approving vendors will accomplish those objectives. Exactly how do we get a lower cost, higher quality product by making the hurdle that out-of-state vendors must leap over taller?
It is closer to the truth to say that "made in Indiana " preferences in state procurement are an obstacle to efficiency and cost control. When a candidate tells you that he or she will fight to keep state spending within the state, they are telling you that they value other objectives -- such as economic development or political patronage -- more than efficiency.
Perhaps we voters all understand that our candidates cannot tell us the naked truth about such matters, lest they be skewered in the next day’s headlines. More frightening is the thought that voters actually believe candidates can deliver what they promise when it comes to pipe dreams like new spending commitments or painless spending caps.
About the Author
Educational Attainment, the 21st Century Fund and the Future of SchoolingIndiana ranks 42nd in educational attainment.
Big Savings for Ending Prevailing WageMy statistical models show that repealing state prevailing wage laws save taxpayers money.
Re-Thinking Economic Development A large share of the most mobile families—perhaps half—no longer need to live near where they work.
Money Illusion and InflationPrice fluctuation could cause inflation to last longer, but it didn’t cause the inflation, it simply extends the pain.View archives