BullDOGE for Washington State?

Let us try to make this simple.

Only human beings exist in an economy. Artificial entities created over the centuries, to the extent that we humans hold that concept in common, are simply conduits for a human being.

Governments are just one example of artificial entities. Think of them purchasing items produced by human beings on our behalf. They do it well. They do it badly. They are corrupted by power to purchase goods for the powerful and not the ordinary citizen. This is true to a certain degree everywhere in the world, and for the last 6,000 years.

In the last say 75 years, the various governments of the United States purchase on our behalf 36% of what humans produce. Many countries, have a greater percentage, or many less. The reasons for government to do this vary, and that will not be discussed here. Either you the human agree with the government decision, or not. This depends on your cultural up bringing, current habits, and cognitive ability to understand what is going on. One thing is true, is that if the government chooses you do not. The other is that the most efficient government you can ever imagine will cost the humans 20% more than direct purchase to receive what other humans produce. And not all the humans will receive the same. If you choose, it costs 20% less, presumably you like it more, and you get all of it.

If that were entirely true there would be $0 tax. If not true why not? Let us take the first example. The United States fought a war of independence, with militia; people who bought their own guns to shoot and kill people. After a government was formed, it took money from the people to buy guns for them to shoot and kill people, but at the direction of the government. Government choice not individual choice.

Article I, Section 8, Clause 12 of the U.S. Constitution grants Congress the power to raise and support armies, but it limits the appropriation of funds for this purpose to a maximum of two years. This clause was included to prevent the establishment of a standing army that could threaten liberty.

So much for the two year idea, These well meaning ideas end up with a life of their own, and never questioned because of habit, perceived need, or financial attachment to the benefits. We humans develop a tribal attachment to spending and a tolerance for corruption. A belief rather than foundational researched understanding. It becomes a habit defended even by violence to protect the tribe (government spending benefit group). The violence can become so bad that you need an army to protect against such tribal militias. Called circular reasoning. Humans always end up in the same place fighting the other tribe.

Efficiency is a word for the reduced stupidity outlined above, occurring not just with the military, but everything else. To make a more perfect union.

So let us explore a very small example about personal tribal loyalty to a benefit. I taught a capstone class in accounting at a University, and made up the curriculum as I went. Something new every week not disclosed. But the theme was how do you provide accounting information when there are no rules, standards, nor agreement to what is supposed to happen. Not something accountants do, and they are human.

One example, I began by asking every student to pick their favorite charity, and stand in front of the class to explain why, what the charity did. I would never have expected the intensity of their attachment. No one asked them real questions so as not to engage in the fight that might occur. Then I gave them access to an artificial intelligence analysis program, industry data in similar charities, evaluations by Charity Navigator, and required them to “critique”? as an accountant would do for that charity. They were graded on that written critique. And required to mail it to that charity board, asking for a response. Open rebellion is the best way to explain the response. Perceived as being disloyal. The analysis data is wrong. Other unnamed factors are at play. Everyone said they mailed it but no response, except one, the only one that really mailed her critique. The board read her letter, and said they would adapt to the suggestions she provided. The point of this example is human frailty, in all of us. We cannot stand perceived disloyalty to our chosen benefit.

So another story. A client of mine, Barry, now deceased, was working for Senator Warren Magnuson in Washington DC in 1960 as an intern, and in a group discussion asked, “How do we know what is done with the money we pass as Congress into law.” Short answer we don’t. They brainstormed a method called “Performance Accounting”.? He moved to the State of Washington, for a life time career of consulting with the State on such matters.

For? example congress passed funding for relief from hurricane Katrina. Billions for a gigantic disaster, that over came levy walls, and pumps designed to remove water from storm surges. Hundred thousand people lost their homes built in the 1920s, mostly substandard below the now high tides. It quickly became apparent most of these were of color, poor, and this was also a historical problem. These people needed help, and billions were sent. What tribe are you in? Or should you do some analysis?

Plastic tarps were sent to cover the damaged homes until repairs could be done. The cost was determined to be $140 per square foot of plastic. Only then does the accounting mind start to question these noble intentions. Wait, let me look this up. It only cost to $125 per square foot to build the entire house, new, according to the current building code. Something is wrong here. If planned properly the house could be built on 8 foot posts, making a covered storage area, while the house is above any future flooding. And now the poor person is living in a new home, safe and sound for less money. Why wasn’t that done?

Another story. Bob Williams was a CPA who championed Barry’s idea of performance auditing, ran for governor 1988 and lost. Two years later on a ballot initiative passed the idea of performance auditing by the State Auditor, WITH MANDATORY FUNDING. It went no where, because:

The auditor in charge of the program was himself embroiled in fraud. And no one wants to be held accountable. So for example, I weight 200 and too many pounds. I won’t say definitely how much, because then I would be held accountable. I just say platitudes to obfuscate. Now, the auditor just supports the Governor’s agenda. Rather than question it.

I asked a long time legislator who I actually admire, if he knew what performance audit was. He said he knew of it; but never ever read a report. I read several and they are simple platitudes, with no specifics. Politically correct pablum.

What if Larry said he weighed 25 pounds too much, and agreed to do something to achieve the goal? How long? Six months. Could we hold him accountable? That is a tall expectation.

In? the same way, what if the legislators were required to express their expected outcomes from the legislation in quantitative terms, say how that will be measured. Rather than throw money at it and see if it works.

What if the role of the State Auditor was not to choose what to measure and take the political storm, but measure what the legislators’ expected to happen. More a role of quality control, and basis for subsequent revision based on more reasonable/real expectations.

For example, we choose to feed the poor where they live. A happy meal cost $10 and it will cost $10 to deliver it is what is expected. The auditor now finds the actual cost is $150 per meal. Now what, we don’t feed the poor? Or we order out from McDonald and Uber?? And tolerate an error of feeding the rich abusing the system costing another $30? Never easy is it? But we feed three times as many people, mostly poor and some rich. What is the tolerable error to gain efficiency?

Do you see the loop here? The decision makers fund an expected result. The government attempts to achieve, gets performance feed back, adjusts, and then goes back to the legislature with better expectations. The public has measurable results, and can better influence the legislation. The auditor does not decide what to measure, nor how much is correct, but it must have measurable performance metrics. Something computers can do as never before.

Or we can create the Washington State BullDOGE and do it that way.