Monday, November 11, 2019

It's Time For Outcome Based Audits Before Authorizing Any More Government Expansion

                              I'm NAMAZU and I approved this message which I believe in strongly.

Namazu's pal Vic published this recently and Namazu pushed it for a reprint on the AAB blog. We concur with this latest from Vic via the historical character Arrias. And so  with permission  we reprint: :


Audit This

Numbers tell interesting stories; some people become quite fascinated with them. In monitoring government programs perhaps the key number that will be quoted is how much money went into the program. I suppose the analogy in the private sector is market capitalization, or, more simply, how much is something worth, how much wealth has been pushed into the program - or company - by people willing to invest in it.

By that measure, the Yankees are the best team in baseball; they are, in fact, the team with the highest value, currently estimated at $4.6 billion. But…

They have a $9 million negative operating income. (The Dodgers are worse off - they had a negative $90 million operating income this year.) Further, neither has won a world series in a long time.

What about government?

But, wait, government isn’t baseball.

That’s what is sometimes called a “Blinding Flash of the Obvious,” a BFO. 

But there’s something to be learned in this - simplistic - “dialectic." The best baseball team in the world is the Washington Nationals. How do we know that? Because they just won the World Series. Fans don’t really care how much they’re “worth.” We might argue that if they played another 7 game series the Astros might win. But, we’d settle it based on an “outcome" model. Next season we’ll do it again.

But not government. Government measures all sorts of things based on input models. And if a problem persists, spend more money on it. And the media keep score: the most important programs are the ones with the most money. But there’s a fundamental problem with this keeping score based on inputs: this is akin to saying the best baseball team is the one with some combination (quick, someone develop a formula) of highest paid line-up, most fans, and if we really want to get picky, most revenue or even highest earnings. (Is that EBIT or EBITDA?)

To which, any baseball fan would answer: What planet are you from?

In the real world, outcomes matter, inputs - not so much. Mike Trout is the highest paid athlete in baseball because he is the best hitter in baseball. And while Bryce Harper is a fantastic athlete, I suspect Phillies management is more than a little antsy about his performance this past year. Good stats for some guy making a few million. But for one of  the highest paid players in baseball? Hmmm.

Consider the Department of Education… Separated from HEW under President Carter to improve the test scores of US Students, and slow the rapid growth in education costs. Since then? Scores remain the same (there is more than enough evidence that the education “product” has actually worsened), and education costs have risen at approximately twice the rate of inflation -  for 40 years.

The Federal Reserve. Created in 1913 to reduce the impact of recessions and the business cycle, and to protect the value of the dollar. Since then we’ve had a slightly lower number of recessions than during the previous century, but we’ve also had the Great Depression, and the Great Recession, and the value of the dollar has fallen 90%.

DOD. Misguided procurement stories are so pervasive it’s difficult to where to begin: F-111/TFX, the Knox class frigate, MX, B-2, F-35, LCS. Everyone’s favorite aircraft carrier, USS Ford. Or the more unpleasant record of winning tactically but not strategically, at least for the last 7 decades. 

       Despite the highly polished and impeccable public image, anyone who has spent any time in uniform can tell you story after story of money going down “rabbit holes” big and small, of incompetence that has to be seen to be believed, of foolish behavior and idiotic decisions; the ability for DOD to pull off great operations is legend, but there’s an equal ability to screw up a two-car funeral.

How much did the Department of Energy contribute to making the US energy independent? Three guesses, first two don’t count.

Agriculture? Commerce? HUD? Spend a little time looking at what their original missions were, and what they do now…

This is one reason we need to push back whenever any of the candidates - Senator Warren, et al - come up with another program to push trillions of dollars (tens of trillions, actually) into massively expanded government programs, as if somehow the government knows what it’s doing.

Why do we think that suddenly they’re “going to get this right?”

How about, before we let government absorb any more programs we insist on an outcomes based audit of a few major offices and see what that looks like. Then we can discuss government expansion. Audit Outcomes, not inputs. 

 Call it a BFO.
Copyright 2019 Arrias
Reprinted with permission from 



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