What the Federal Government Does

By James Kwak

Now is as good a time as any to remind people of who provides all those detailed projections of where Hurricane Sandy is going to hit and how strong it’s going to be: the federal government. No matter how you get your weather news—local TV or radio, The Weather Channel, AccuWeather, whatever—hurricane forecast information originally comes from the National Hurricane Center, which is part of the National Weather Service. The raw data come in part from the Hurricane Hunters, the pilots who fly planes into hurricanes, who are part of the Air Force Reserve and the National Oceanic and Atmospheric Administration. The computer models that predict where hurricanes are going to strike are developed by the NHC.

In August 2011, Simon and I were on vacation with our families in Southern Florida as Hurricane Irene was approaching the East Coast. Simon had the idea of using government weather services as the example to lead off chapter 4 of White House Burning, “What Does the Federal Government Do?” I like this example because almost everyone agrees that the federal government should be engaged in disaster prevention, disaster relief, and even weather forecasting. In 2005, Rick Santorum proposed a bill that would have prevented the National Weather Service from providing weather forecasts to the public—but he insisted that the NWS should gather weather data and provide it to private companies so that they could make money off of it. (AccuWeather is based in Pennsylvania, Satorum’s state, by the way.)

There’s a strong case to be made that hurricane research is one area where a small amount of taxpayer spending has had huge public benefits. That argument is made by Jeff Masters of Weather Underground. I was going to put it into White House Burning, but I didn’t think one of his sources said what he wanted it to say. Still, as I discussed in a previous post, it is highly likely that more accurate forecasts have saved tens or hundreds of millions of dollars in unnecessary evacuations for each large hurricane.

What do Mitt Romney and Paul Ryan think about taxpayer-funded hurricane research? We don’t know what Mitt Romney thinks because we don’t know what he thinks about anything (wait . . . this month he’s a moderate, so he’s probably for it . . . but isn’t he in favor of private sector innovation, so maybe he’s against it . . . how does his head not explode?). But we know what Paul Ryan thinks about it because the House tried to cut Hurricane Hunter funding by 40 percent in 2011. Let’s see what he has to say about that on the campaign trail.

The bigger issue is that Romney-Ryan calls to cut government spending run into the problem that most government spending is on things that most people like, such as disaster forecasting and prevention. This is why they can’t say in particular what programs they would cut, just like they can’t say what tax deductions they would eliminate, because that would be obviously stupid or unpopular. Instead, when they open their mouths to talk about government spending, they want more of it, like Mitt Romney saying we need an even bigger navy. (By contrast, Robert Gates, a Republican defense secretary, thought that eleven aircraft carrier groups were more than enough in a world where no other country had more than one—and that’s already stretching the definition of aircraft carrier group.)

Romney-Ryan is all about lower tax rates, more spending on things they like, and nothing (tax increases or spending cuts) that would actually make anyone worse off. What’s wrong with this picture?

46 thoughts on “What the Federal Government Does

  1. Actually, the computer models are developed by the NOAA Office of Oceanic and Atmospheric Research in conjunction with universities, federal labs, and the National Weather Service ( who issue forecasts based on the models). Not only does this partnership give first rate hurricane forecast products, it also links the academic and federal science communities in a strong collaboration.

  2. There are millions of Americans who can see nothing wrong with this picture.

    As Bill Clinton has stated, balancing the budget is just simple arithmetic.

    But about half of Americans don’t grasp two things. a) They don’t gasp the reality of arithmetic and b) they don’t grasp reality in general. They have a $16 Trillion Gravy train they have been riding on and nobody wants to pay then conductor.

  3. Following the logic of this story we need to massive taxation because we need to be prepared for a recurrence of the 1811 New Madrid, Missouri earthquake, the biggest in the nation’s history.

    The author sense of proportion is completely inadequate.

  4. @Dave: No, we need to stop saying absolutist statements like “government is the problem”. There are some things that government is well suited for and it’s a longer list than the Libertarians’.

  5. Dave Thomas: Somehow I missed where Mr. Kwak said he wanted to massively increase the National Weather Service. Was it in the first third, the middle third, or the last third of the article? The only “logic” I saw in the story was that it seems likely, but hard to be sure, that Romney would want to decrease spending on it; we know from his voting record that Paul Ryan wants to defund it. He also has shown, but less openly, that he wants to defund Medicare, Medicaid and Social Security.

  6. And if the Federal Government didn’t do it, the private sector and insurance sectors would…..do nothing? Ask people to pay for research, like paying for radio (witness NPR)? Nothing is free. Would the private sector do a better, perhaps even safer job, if the Federal Government were out of the weather forecasting business? Might we be sending drones into the eye of the storm rather than flights with human beings, risking life and limb? Might advertisements charged by television be higher to fund the weather research needed? Might this induce competition? Create a “CNN” for weather? The possibilities are endless, but as long as a “free” good is provided, and the costs are non-transparent (via a profit and loss statement), the market will consume that free good without asking the really relevant question: Is this a ‘feature’ of Federal Government that cannot be solved through the private sector? If yes, then continue. If no, then phase out.

  7. …..”necessary” feature of Federal Government, that is. Necessary being filtered by the principal: “Does this Federal Government activity serve the best interests of these United States in a way that cannot be solved by the private sector in a more efficient, competitive, innovative and cost effective manner?”

  8. Once again, it was the INEFFICIENCY of the democratic system itself, which bankrupt the country. Necessarily!

  9. @Filbit – Check your understanding of the facts. It was a centrally planned housing policy of Congress, fueled by a monetary punch bowl that Greenspan enjoyed trotting out far past closing time, that caused the financial Armageddon, combined with duplicitous pluto- and technocrats. And, also, we live in a Republic, not a democracy. To blame the meltdown on the “free market” is like blaming a corpse for failing to clap. We killed free and competitive markets in the USA long ago. The more appropriate term for this aforesaid Republic isn’t USA, but USSA. Our central planners are to blame, not capitalism. The problem with our markets is they are so polluted by the freebies from government that the price of risk is as opaque as a CDO^2. Why do you think the jumbo market remains dead? Because Uncle Sam isn’t standing full faith and credit behind the bonds. I wish more people actually understood facts rather than regurgitating sound bites.

  10. Yes, its true that there is no free market or true competition among the Banks, HMOs, Drug Companies or Oil Companes.
    The auto and manufacturing industries have to compete because of globalization.
    Small business must compete because there is no way of colluding except maybe in Montreal.
    But what really bothers me is you can work in an oligopoly where its a hugely profitable Club and on top of that you greedily behave in a crooked manner and turn around and ask for a bailout. i.e. the people who should be going to jail are getting their bonuses restored through tax payer funded bailouts.
    I am so glad that finally 5 years later the Dept of Justice is finally charging these crooks. See http://dealbook.nytimes.com/2012/10/24/federal-prosecutors-sue-bank-of-america-over-mortgage-program/

  11. Thanks for your admission of guilt there Tommy. Yes, there is a lot of grey area in your understanding of the world. It will be balanced in due fashion, trust me. Even I live on top of sand, and work with in it, all the time.

  12. Actually its worse than collusion. Montreal has a checkered past of buildings and bridges collapsing because not only was the contractor overpaid he was also incompetent. It also helps to have building inspectors who look the other way.

    We had a major scandal in Quebec about 10 years ago called the “sponsorship scandal”. In this one, the federal government wanted to advertise on bill boards and in the media to support Quebec staying as a province within Canada rather than separate.

    Anyway, many of the bill boards and advertising pieces that were paid for, were not completed. There were kick backs to high ranking Liberals and rerouting of the money to influential people. The people of Quebec don’t mind this until it is discovered, then they insist on a big investigation to clear their name.

    I hate to say it but I think it is a cultural thing. It does not seem that bad to them as long as no one finds out.

  13. Well said and right on point. Too bad there are no candidates (that can get any exposure, that is) saying things like this.

  14. T Day – Filbt is really Bob Feinberg. Smart guy but jaded. Look at prior posts on Baseline. You can get lost in the conspiracy theories. If the Bilderbergs were as smart as BF believes, they would be aliens not humans, which of course may be possible. Perhaps genetically modified supermen a la Neitzche. I am sure Flibt will be happy to educate as he is regularly the smartest guy in the room, according to himself.

  15. I guess if a large number of Republicans argue children born from rape are a “blessing from God”, a person could argue a stillborn baby was a blessing from God. After all, “God wouldn’t have intended something to happen that wasn’t a ‘blessing’ ” right??

    The logic is the SAME is it not???

    Personally I see the stillborn as the blessing in one particular case. A “salvation” from roughly 18 years of upbringing by a total nutjob.

  16. Great article Mr. Kwak. It’s important to remind the “starve the beast” crowd that there are services and support that only the Federal government can provide. As the nightmare left in the wake of Sandy will reveal in the coming weeks, no single city, municipality, or state have the capacity. And there many cities, municipalities, and states that will require a massive amount of support from the government and we as citizens of these United States should applaud, support, and appreciate that support.

  17. You would think this was a dictatorship. But people are getting up from their potato chips and TV sets, getting into their cars and finding their way to the polling booth and freely voting on their own free will for the nutjob.
    This is the part that I cannot figure out.

  18. Though we all are of course grateful for the meteorological data we now receive Thomas Day’s question “And if the Federal Government didn’t do it, the private sector and insurance sectors would…..do nothing?”, is absolutely relevant.

    And I might also add that though somewhat unlikely, cutting spending 40 percent in some government offices sometimes make these perform better their functions… and, before anyone protests, let me assure you that also quite often is the case in the private sector.

  19. @Michael Smith
    Somebody DOES have a clue: It looks like the face of fear and horror from Obama and the Democrats. Even the so-called “journalists” of the propaganda ministry are expecting a Romney win. Romney will easily win both the popular and electoral vote. History will record that Obama is a failed president who placed the final nails on the Bill of Rights. Thanks to Obama, big brother does more harm than good to the people it now spooks and enslaves. Happy Halloween, Americans; Unfortunately the fright will last a loooooooong time.

  20. For the record, I don’t want the private sector coordinating the response to a disaster, because the major imperative is profits, as opposed to the quaint notion of health and safety. It is an inherently flawed position to believe a basic core function of government such as disaster prep, coordination, and recovery could be effectively carried out by a private firm or firms.

  21. …..”necessary” feature of Federal Government, that is. Necessary being filtered by the principal: “Does this Federal Government activity serve the best interests of these United States in a way that cannot be solved by the private sector in a more efficient, competitive, innovative and cost effective manner?”

    Thomas Day (and others),
    Your question is commendable, and one that many of my fellow federal government employees actually ask on a regular basis. And in the case of weather forecasting (our extant example) I think the answer is yes.

    First, while the private sector certainly can develop the technologies and applications that the National Weather Services uses to deal with Sandy (as well as local weather, etc), the NWS is legally REQUIRED to do so by the Weather Service Organic Act, which is a federal statute (15 USC 313 et seq.). While I know it sticks in the craw of private sector boosters such as yourself, legal requirements are what they are, and Congress has shown no sign of changing them in this case. So given that the federal government is required by the People’s representatives to both develop and deploy these forecast techniques, what’s the economic incentive for the private sector to do so?

    Second, as was pointed out elsewhere in the blog-o-spehere today (http://blogs.wsj.com/speakeasy/2012/10/28/why-america-has-fallen-behind-the-world-in-storm-forecasting/) the NWS does this sort of development and active forecasting on 3% of NOAA’s budget. SInce NOAA got approximately $5 Billion last fiscal year, that means the NWS and other NOAA offices working on weather research spent $150 M on weather forecasting and research all over the country. That may seem like a lot of money, but when you consider that our next President will spend $1 Billion just to get elected, NOAA’s expenditure seems pretty efficient to me (and remember that the NWS money is for forecasting AND research).

    Third, most of the computer models used to predict Sandy were developed in collaboration with the university community nationwide (http://www.nrc.noaa.gov/ci/locations/ci-profiles.pdf) which means the money isn’t just being spent by federal “bureaucrats” but by university professors who are both scientists and teachers. The private sector workforce relies as much on the success of this research as does the federal government.

    And fourth, NOAA and the NWS make this forecasting information and the research that drives it available to the public for FREE. That means the Weather Channel and Accuweather.com (to name but two private organizations who believe are already the CNN’s of weather) get their data for free. I can’t see how disbanding the NWS would make that information flow any more efficient or cost effective.

    The bottom line sir, is that when you actually do some checking, you find that weather forecasting (like so many governmental activities) meets your definitional criteria. But as I’ve just shown, you can’t easily summarize it in a sound bite.

  22. I can just picture it now. The people are stranded on their roof. The boat with uniformed personnel comes along and offers a ride but first they need their credit card. This is the Republican Dream.

  23. If Romney wins, you had better brace yourself.
    He is looking for loopholes that cannot be defined until after the election. The overwhelming likelihood is he will find no loopholes. And if he does and they will effect the top 1%, he will be told No and he will obey.
    Nextg he will have to increase military expenditures and he will have to retain the tax cuts for the top 1% because of pressures from his own party.
    It will be very hard to take health care away from 30 million Anerucans.
    Romney will not be able to behave rationally like when he ran Bain Capital. He will have to keep his promises because of the pressures from his party and the lobbyists. He should have done the math in the first place.

  24. Philip –

    Your points are excellent. Thank you. My point isn’t (wasn’t) to object to NOAA, but to propose that just because – through ill advised statutory mandate or other implementing regulation – is made available for what appears to be FREE from the public sector doesn’t mean it SHOULD be available – for free – from the public sector. For example, government guarantees on debt. Not just home mortgages, but many debt obligations. The “fee” the government charges isn’t backed up by a risk based (read: market pricing) pricing discipline. Thus, you can be assured it is less accurate as there is only one competitive bid – Uncle Sam. These actions and activities create poor economic incentive and inadequate sensitivity to changing sets of information and circumstances. This is why socialized work, services, products, and activities often produce poor performance: there is no pricing mechanism other than the statutory monopoly that is created. Whether this is good or bad public policy is not so easy as four points. The open source movement, for example, could perhaps do much better – in collaboration with universities and other entities – at using network theories to produce more advanced algorithms for weather prediction. Because the government activity is FREE, there is no incentive for competition, for new innovation. So it is hard to say that because Romney spend $1 billion and NOAA $150 million, tht they $150 million produce as or more optimal an outcome than a competitive system. It would be fascinating to run a competition: whoever comes up wig a better approach than than NOAA will receive a check for $150 million. I bet this incentive would encourage every university on Earth to come up with competitive proposals tht improve on the current system. As for the $1 billion spent on campaigns – it is obscene. Campaign finance reform and the recent Supreme Court decision tht allows no for no cap on Super PACs is ridiculous. We need to mandate NO spending, only volunteer work and the power of the core ideas and party platform.

  25. Wow! You folk are all a tad batty…. hard to fathom the thinking. Do you know how many *citizens* went to help rebuild after Katrina? That police and firefighters and first responders from all over are capable — and willing — to assist in any and all disasters.

    That we need bureaucrats writing reports and pointing fingers — who was responsible for the oil spill: Coast Guard, FEMA, DHS, NOAA, EPA…. all of the above or, better, *none* of the above….? This bureaucratic infrastructure is a waste of money. Forget privatization. People help people. If you think that federal paperwork is the answer, well….

    ….I know. That *is* what you think and you *are* going for it. I’m soooooooo grateful to be away from the arrogant and sanctimonious People’s Republic of Massachusetts, capital of which is Cambridge.

    Yuck. ….Lady in Red

  26. “People who need people, are the luckiest people in the world….”

    Belt it out, Barbara!

  27. I did not see a lot of people helping people in Louisiana after Katrina. People sat on their rooves until some uniformed person came along in a boat and saved them Then they waited for the Corps of Engineers to come in a rebuild the Levy for $12B which eventually broke under Isaac. I remember the Superdome where the toilets backed up because they had to wait for qualified plumbers to clear the blockages.
    Maybe we can blame this on CNN. The pictures very rarely showed people helping people.
    But I do agree with you about FEMA. They are totally incompetent. But if they were competent, it would seem more efficient to keep one warehouse of disaster supplies rather than 50 warehouses, one for each state,
    Let each state order what they need during a disaster and just send them a bill.

  28. And I saw redneck pigs mow down innocent unarmed but noticeably civilian black people on bridges who were only seeking safety. I saw the fascists in the bushgov fail to respond to the catastrophe in a timely matter, costing hundreds of lives, and billions in repairs. I saw New Orleans take years to recover. I saw bushtheidiot falsely applauding another idiot and horse trader head of FEMA on TV, for wanton grotesque FAILURE! I witnessed poor ie, black and brown people discarded to shoddy FEMA trailers for years.

    Obama acted preemptively to put the pertinent Federal agencies to work before the Sandy nightmare hit. That stupid idiot Brown should be parachuted into the epicentet of the next and certain natural disaster, and let’s see how he survives. Worthless Idiot!!!! What a waste of carbon. Put his stupid worthless wingnut ass at ground zero of the next horrorshow (and the horrorshows will continue as we foolishly ignore the hard and terrible realities of man made climate change), and lets record that sniveling coward beg for help. Worthless punk!!!? The sooner we shut the stupid wingnut partisan, fasciscts lie spewingmouth – the better for the rest of civilized humanity. What a worthless bushgov mouthpiece and ignorant punk!

    Obama, (who betrayed every policy I supported) has shown great leadership and compasion preemting and responding to a natural disaster (which though epic, will be much more common in the future) than the facsist in the bushgov who FAILED on 9/11 and FAILED responding to the horrors of Katrina.

    “Ye shall know the truth, and the truth will set you free” wingnuts and rednecks – you might want to look into it! Idiots!!!!

  29. Tony, bro, give your Bitcoin address and a PO Box so someone can ship you a large quantity of meth. You clearly need to drug yourself and put that hatred out of its misery. Keep it up bro. That’s really good karma you’ve captured there. Perfectly appropriate for this board about economics.

  30. “But if they were competent, it would seem more efficient to keep one warehouse of disaster supplies rather than 50 warehouses, one for each state,
    Let each state order what they need during a disaster and just send them a bill.”
    A straw man, Michael. The reason you have multiple warehouses is for rapid response and minimal dependency on transportation arteries that may not be available – say, for example in an earthquake. For production efficiency, you might want to have a single source with minimal overhead. But the best car companies don’t necessarily agree. They have local suppliers and warehousing immediately adjacent to their factories and gain by it.
    Heck, even the Mormons keep local emergency stores. Yes, they had the trucks rolling from Utah two days before Katrina hit and they were the only help available in many locations, because of the utter failure of the Bush-era FEMA. But the Obama-era FEMA appears to have learned by this lesson and began prepositioning major resources ahead of the storm, to good effect. One of the reasons they could do so, quickly, is because of local warehousing.

  31. Folks,
    First, having gone down after Katrina as part of the federal response (and being raised in Baton Rouge) – if you weren’t actually on the ground then shut the heck up about what did and didn’t happen. Thousands of ordinary Americans put their lives on hold to help their fellow citizens for month after that storm – we worked beside them every day. Amish carpenters, Baptist men’s church groups, Muslims youth groups, Red cross volunteers . . . I don’t have enough characters in this tiny box to list them all. The first boats to go into New Orleans (still under between 8 and 12 feet of water at that point) to rescue trapped civilians were civilian volunteers organized by the Louisiana Department of Wildlife and Fisheries. And CNN reported all this at the time – so if you didn’t see it you weren’t looking. What happened at the Super Dome was a human tragedy – but it wasn’t the fault of the people who sought shelter there. Bad decisions were made by politicians and citizens alike, but to insinuate for one second that no one but FEMA helped is to deny reality.

    Second, states and FEMA do pay good tax money to purchase, store and distribute emergency supplies. The trucks are already rolling to New Jersey and elsewhere and will for months. And FEMA purchasing specialists are now working around the clock to get whatever their folks and the states tell them they need. That’s how the system works – only the federal government can buy in this kind of bulk and ensure a minimum standard of resource delivery. The private sector is doing what it does best – vending supplies and expertise to government contracts because the government can purchase at a scale of economy no individual community can.

    And back to the Weather Service example – the universities do compete for that money. And as a result all the innovations in weather forecasting in the last two decades if not three have come from an innovation incentivised partnership between academia nd the federal government. No market can create that because no market can price that. When we’ve tried to (commercial fisheries for instance) it’s been an unmitigated disaster leading to market collapse.

    Government may not always be the solution, but neither is unfettered capitalism.

  32. @Philip H, so noted, and wise words. Sandy and Katrina should not be used as political or ideological stalking horses. Several of my colleagues at the time took several weeks off work with the full support of our company to help with the Katrina recovery efforts. Thank you for yours.

  33. It is most interesting to watch this conversation. Being from New Orleans, aka having Katrina and “Heckuva” job Brownie and FEMA trailers and the whole nine yards, a FEMA that works would have been a good thing, Katrina wise. i sincerely hope FEMA works for the people up in the NY/NJ area. The political destruction of FEMA by the anti Government ideology left the whole New Orleans area destroyed and roiled for many years. Can’t have Government working, can we?

    locals had to survive and depend on the help of the people who came from all across America. Cause the Big Bad Government was not allowed to help. “Government” was the problem, thank you Ronald Reagan, and FEMA was the scape goat for which we in New Orleans had to pay for.

    Go fight your political anti Government wars when there isn’t people in need of help. Katrina showed us the folly of such partisanship. Looks like Sandy is doing the same.

  34. Strange! This comments seems to imply that help from “people who came from all across America” is quite different from help of the government… but, anyhow, I tell you, if I could choose, even as a foreigner, I would gladly prefer the first

  35. Help in any form is always welcome and appreciated by those in need. Whoever can best organize aid and support is to be applauded. Epic disasters require massive relief from all circles. No one should deny the great efforts of any government or group that reaches out with goodwill and sacrifice to help those in need!!

  36. Yes, that´s what I thought. Though help from the people is always better as it is always more sincere than help from governments, which can always be so politically circumstantial.

  37. I think there is a fundamental difference between FEMA – Katrina and FEMA – Sandy.

    George W. Bush was never able to comprehend a management problem so he thought the best thing to do was to get out of the way and let them do whatever came naturally.

    Barack Obama has the advantage of knowing that FEMA can collapse under its own bureaucracy, so he is asking that red tape be removed and all calls be answered in 15 minutes.

    FEMA has never worked under these parameters and it appears that it is going to result in a big improvement in the performance of the organization.

  38. Always respect and learn from your commentary Per Kuwaski, but the government response should NOT be politicized. It’s help! The government should do all it can to help its citizens in need, regardless of the political repercussions. In this day and age no matter what action is taken by the government – the opposing partisans will vehemently attack the response. The critical difference is does the government act swiftly and appropriately to crisis. It does not matter what opponents brute or pimp. The radical difference between the budhgov response to Katrina and the Obama government response to Sandy is that the former FAILEF catrostrophically – while the latter – the Obama government responded early and in force to help. Bushgov failed. Obama succeeded. Now pundits and partisans can parse issues and details – but the startling truth remains that the fascist in the bushgov FAILED to respond and help the victim of Katrina (and that failure extends through years after Katrina) and the Obama government did respond and act preemptively ad that idiot brownie asserted to a natural disaster of epic proportions. Again – help is help and all of it is welcome, but the fascists in the and the idiot horse trade brownie FAILED and the Obama government acted nonpolitically to help our fellow Americans.

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