Does Arizona need a budget? Should Arizona have a budget?

Last Saturday a few University of Arizona-affiliated 'bloggers--Laura Donovan, Evan Lisull, Vishal Ganeshan, and myself--got together at a local bar to say "hello" and get updatd on an upcoming project. All three are far more capable writers than I am--working with optical tweezers and Markov chain models all day doesn't provide much practice--and are also interesting enough to be worth following, so add them to your RSS aggregator or 'blog feed. (I'd say that a broader get-together should happen, but some partisan or ideological 'bloggers haven't yet learned that the 'blogosphere is improved when it becomes a conversation--e.g. when Wilkinson and Yglesias read each other and the ideas are allowed to develop--and if you don't even link, can you socialize?)

That, eight weeks past its deadline, the legislature has yet to produce a meaningful, workable budget compromise with the Governor, came up briefly in discussion and my memory was instantly loosened up a bit as though sprayed with PB Blaster: former Congressional Joint Economic Committee senior economist (among other things) Joe Cobb, now hiding from the fuzz in Arizona, had said at one point that governments do not need budgets and that until around 1900, normally did not have budgets. I couldn't, however, remember the particulars or the arguments for it, although as Lisull noted, having to re-approve spending items each year could possibly lead to more sunsetting of (on net) worthless programs.

After leaving I gave Joe a call, trying to get him to write a guest post on the subject. No such luck. (The invitation to guest post on AZ policy still stands, and readers are welcome to send him bribes on my behalf. "Did anyone order a pizza?") But I was able to get a few minutes of his time, an explanation, and referral to an explanatory draft article on his website.

To quote:

Governments pass laws to spend money. Households and businesses don’t. Those laws make it much more difficult to change if they get things wrong.

Whereas households and businesses can predict wages and sales, governments have a difficult time predicting tax revenues when inflation and tax brackets have a large effect on actual revenues collected the following year.

The idea: have government Appropriations Committees fund projects based on tax revenue received, not tax revenue predicted. In Cobb's words, "This is...actually how households and private businesses control spending." The current system is biased heavily in favor of borrowing and increasing taxes when an economic downturn causes revenues to fall, and towards ballooning a budget unsustainably during short term "boom times" such as the construction-based expansion Arizona saw in the decade leading up to 2008. Going to the sort of "reality-based budgeting" where government spends money in hand restores the symmetry between spending cuts and tax increases.

Elimination of forward-looking budgeting would help Arizona to avoid, when the next downturn comes, the sort of scrambling legislative breakdown we're seeing now. It may also force a bit more rationality out of the voters, as rent-seeking will become (even more) transparent, and politicians would have to get more honest about their vote-buying spending programs. "You want the schools and prisons funded first, right? If you also want the UA Presents subsidy of highbrow entertainment, we will have to raise your taxes.

The main trouble in going back to the pre-budgeting way of doing things is the changeover. The old system worked, and in good years the new system works, but to go from the new system to the old system requires money in hand and for payment takers--both private and governmental--to get used to a bit of uncertainty and for institutional culture to change accordingly. Also, given that a switch will make it much harder for government to do everything we think would be nice, we can expect the Left to very strongly oppose such a switch when it does not appear necessary. At the risk of having a fictional villain named after me in the next Naomi Klein novel, I'll say that the current crisis provides the natural time to switch.

I hesitate in writing "crisis." Commenter Thane Eichenauer was right: government failure isn't going to happen. The legislature is already, out of necessity, switching to Cobb's prioritized, "reality-based budgeting" and for example those million kids I mentioned in a previous post aren't finding themselves locked out of grade school. It'd be nice for the change to become permanent. What it will take is for someone or several someones to get this idea to legislators and opinionmakers--for newspaper opinions and think-tank whitepapers promoting such a switch to start to appear.

Cobb, Jenney to debate stimulus proponents tomorrow.

I'm not a big "fan" of debates. Lawyering is one thing, but settling intellectual questions, especially of the quantitative sort, almost demands the precision and slow pace of writing. (My advice: do not allow yourself ever to be convinced by verbal argument on a question of economics or natural science.) Witness the sleazy "debates" over anthropogenic global warming, wherein the most charismatic showman with the best dumbed-down "easy" argument wins.

But I'm a "fan" of both Joe Cobb and Tom Jenney, and wouldn't mind cheering on their side in tomorrow's debate over economic stimulus, were I able to casually drive up to Phoenix.

For readers in the Phoenix area, here are the details, from the Phoenix College Business Club:

Economic Stimulus Debate March 10 at Phoenix Collegehttp://www.marginalrevolution.com/marginalrevolution/2009/02/coming-to-terms-with-bank-nationalization.html

Debate to take economic policy out of the textbook and into real life

PHOENIX-Is stimulus spending by government one of the greatest inventions of the 20th century? Or is it the economic equivalent of crystal meth? Local policy experts will debate the wisdom of government fiscal stimulus at a forum sponsored by the Phoenix College Business Club on the evening of Tuesday, March 10.

"The ongoing economic crisis, and the government's efforts to address it, have taken what seemed like a purely academic debate, and made it a discussion with important real-world implications," said Bev Jenkins, faculty advisor for the Phoenix College Business Club. "The government's response to the crisis will likely have a huge impact on job creation and economic growth, not just in the short run, but for decades to come."

Even though the most recent $787 billion package has been signed into law, many observers believe that many more stimulus measures will be proposed in the coming months and years.

Arguing in favor of the proposition that government spending can stabilize the US economy are David Wells, associate faculty director of ASU's Interdisciplinary Studies Program, and Thomas W. Dietrich, a local tax attorney. Arguing against the proposition are Tom Jenney, Arizona director of Americans for Prosperity, and Joe Cobb, a local economist.

The debate will feature an extensive period for audience questions. The general public is invited and encouraged to attend.

The debate will take place from 7:00 to 9:00 pm in room C102 at Phoenix College, which is located at 1202 W. Thomas Road in downtown Phoenix. A flyer for the debate is attached.

Contact: Bev Jenkins, (602) 285-768

Harvard economist Jeff Miron recommended another, more responsible stimulus a while back. As for me, I'm fed up with the audacity of hoke, a President and Congress who would like to use the financial crisis as an excuse to implement a left-wing equal-but-poor healthcare scheme in particular, and dress up in costume and play New Deal in general. They are prolonging the crisis because it is politically expedient, and we ought demand a speed bankruptcy instead.

Miscellaneous Endorsements: Maricopa County and Central Arizona

Four more endorsements, then sleep, work, and the polls, all the while anxious about the eventual disposition of Proposition 101:

• Elect Dan Saban Maricopa County Sheriff.
  
  Joe Arpaio's PR men promote him as "America's Toughest Sheriff". What does having America's Toughest Sheriff get the people of Maricopa County? Publicity stunts, money wasted pursuing immigration paperwork offenders instead of criminals, civil liberties violations, extradition refusals, and quite a few sure-loser lawsuits. If they end up spending a night in his "Tent City" jail, it may even cost them their lives. The Wikipedia article on the man is a good place to start for those unfamiliar with his record, or just search for his name on Google.
  
  The County's authoritarian-leaning electorate has been predisposed to view Arpaio's detractors as "whiners", "supporters of criminals", and other such nonsense. Reflect for a moment on why our Constitution has e.g. the Fourth and Fifth Amendments, and if that doesn't convince you he has to go, consider how much those lawsuits are costing the taxpayer. If you're still not convinced he has to go, let me remind you that he has been using his office to harass and intimidate< critical journalists, leading to a standoff with Phoenix police when his deputies threatened to arrest a New Times reporter for the offense of searching public records, and also to a lawsuit over the retaliatory arrest and false imprisonment of New Times executives. If you don't think that behavior crosses the line, you likely think that the First Amendment is for whiners and that mere mortals ought never question any behavior by any "authority figure". But if you believed that, you wouldn't be reading my endorsements.
  
  Dan Saban is running to restore the respectability of the Sheriff's office and department, to end the stream of lawsuits, the posturing, the gimmicks, and the publicity stunts--none of which have made Maricopa county a safer place to live--replacing them with modern practices that work. Joining with the Arizona Republic and most of the area's policemen's organizations--again, strange company!--I encourage you to give him your vote.
  
  
• Elect Judah Nativio to the AZ Senate, district 18
  
  Russell Pearce, more than anyone else, "poisoned the waters" at the Capital, whipping up xenophobia, even declaring illegal immigrants to "have no rights", as if to incite the people to a Rwandan solution.
  
  Term-limited out of the State House of Representatives, he's running for the State Senate. Judah Nativio, a cardboard-cutout Democrat, is his opponent. Don't send Pearce back to the Capitol; vote Nativio. Better to elect a mediocre Democrat than the State's major instigator of anti-immigrant hysteria.
  
  
• Vote Joe Cobb in Congressional District 4
  
  I haven't much to say about incumbent Ed Pastor. (This is why I need a co-blogger in Maricopa County.) As far as I've been able to discern, the long-serving Democrat has a voting record that's "middle of the road" given his Party affiliation.
  
  What I do know, however, is that in any given room it's likely that (Libertarian) Joe Cobb can think circles around 99% of the other people present. Unlike most of the Libertarian Party's candidates he demonstrates an understanding of subtlety and that public policy is a balancing act. He demonstrates a genuine intellectual curiosity, an even temper, a courteous modesty, and the humane liberal values that characterize the libertarian movement but are all too absent from the Libertarian Party. More importantly, although he has not served in elected office, his past experience in government makes him well-qualified to serve in Congress, perhaps more so than any other Congressional challenger in the State.
  
  When I recommend voting for a Libertarian or a Green, it's usually as a protest vote. Don't vote for Joe Cobb as a protest vote. Vote for Joe Cobb because he's the best man for the job and, in a just world, would be a shoo-in.
  
  
• Re-elect Jeff Flake in Congressional District 6. If any incumbent Congressman, anywhere in the USA, deserves re-election, it is Jeff Flake. Since leaving the Goldwater Institute for Congress eight years ago, Flake has become the House's premier advocate of fiscal restraint and one of its foremost champions of civil liberties. The "Flake Hour" set off the fight against earmarks. Party leadership made him pay for it, but he's stood firm. Perhaps if they'd have listened to Flake, they wouldn't be set to lose the House to the Democrats, again, despite low overall Congressional approval ratings.
  
  Contrast this with Democratic challenger Rebecca Schneider, who gripes that "people are tired of Jeff Flake not helping them. Need I explain to you, Ms. Schneider, how disingenous it is to call B slipping an earmark at the end of a bill to spend A's taxes for the benefit of C "help"? Or perhaps she really thinks that the job of a Congressman is to drive around the Valley and assist people stuck on the highway in changing their tires, or coax cats down from trees. Schneider's website reads like a third party candidate's thoughtless rant (and full of greengrocers' apostrophes and similar errors, too!), and her statements to the press show her to be similarly out of her league. Give her a few years on a school board or water board to learn to think about policy, perhaps then she'll be worth considering. The only reason she even has a hair of a chance this year is because of general anger at the Republican Party.
  
  That a Libertarian newcomer (with a website creepily reminiscent of the LaRouchies), Rick Biondi, is running against Flake is startling. Flake is easily the most libertarian member of the House. He voted against Sarb-Ox, voted against Medicare Part D, supported comprehensive immigration reform, and while he may have initially supported the PATRIOT Act and the war in Iraq, came to oppose both, and vote accordingly, in little time. Perhaps Biondi's run is an exercise in vanity?; surely there was room for a Libertarian on the State Senate ballot! Libertarians: look up Flake's record--he's not the "lesser of two evils"--and pass on Biondi.
  

Cobb for Congress?

The word is that former Congressional staff economist Joe Cobb is considering a run against Ed Pastor (D-04) this fall.

Next to Jeff Flake, if elected he'd be the most qualified member of the delegation. He's sharp, personable, has an appreciation for nuance, and unwaveringly supports free minds and free markets. Here's hoping he gains some traction!