The Met Office, the email, the moral hazard, le monstre de l'etat etc

In private business, if you're shit at what you do, you go bust. In the government business, if you're shit at what you do, they give you more money. This is what the (ill) Met (by moonlight) Office is saying with its risible demand for a better computer, and it is an example of the inverso-world of state finance. Another is the leaked email (H/T Calling England) showing quangocrats looking for ways to blow £1 million of our money, confiscated by the predatory state.

It may be the case that even within large bureaucracies of a private nature there is found the tendency to max out a particular departmental budget, for fear of seeing that budget reduced in the next tax year, but this tendency is very much stronger and almost ubiquitous within state organs.

This is unavoidable. The problem was diagnosed by Mises. In socialism there can be no economic calculation. Hence they need to find some substitute from the market data of profit and loss. They use targets, but these cannot counterract the gravity drag towards ever bigger budgets. This latter is the measure of success.

In the market the idea is to make profits, which can only be done by keeping costs down and providing goods and services that people want to buy. Economising is imperative in a world of scarce resources. As the individual must manage his home economy, if you'll forgive the tautology, so the businessman with his business.

The pressures within a state organ are wholly different. In order to continue gaining funding, hopefully in ever larger amounts, one must spend. One may try to spend wisely, but one must spend come what may. An efficiently run state organ will always spend their alloted loot down to the last penny, and be ready to use all additional cash which may become available often at short notice.

Amongst other adjuvants, is something of a moral hazard. If, saith the statocrat, we don't spend this cash, if we are efficient in the market sense, the money we save through thrift and hard work will most likely be handed over to others within the spralling Gormenghast of government, who through profligacy and mismanagement have overspent. It will not be saved in any real sense. Knowing this, the conscience of the diligent, albeit misallocated, public-sectorer, feels morally obliged to spend every penny, rather than allow it to be wasted - and every penny you don't spend is a penny wasted, in the context of state departmental bureaucracy.

Labour's toxic PFI legacy

Via a certain (rightfully) Angry Man I note this Express article on the disaster that is Labour's PFI legacy. Nothing reveals the incompetence of Labour's misrule better than PFI, a means by which Labour could boast about investment in schools, hospitals and other 'public sector' projects, whilst hiding the massive debts they were incurring.

PFI is the nexus where meet in disastrous combination Labour's utter lack of understanding with regard to economics, their grubby short-term, self-serving, self-aggrandising urges, their pitiful naivety in money matters, and the corporate interests ready to exploit such doltishness. Thus, all around the country, 'public sector' bodies, such as local councils find themselves financially fucked, and yet tied into contracts for decades to come which will suck dry whatever liquidity they can muster.

Tragically, the public's memory is short. Soon Gordon Brown will be no more than an ogre with which to scare naughty children into behaving. More terrifying still is the notion that Labour could ever get back into national government.

Schadenfreude: a definition

That warm feeling of levity I feel when I read Lord Two Jags in the Guardian reveal:

"The Labour party stands on the verge of bankruptcy. We are more than £20m in debt, facing a long-term decline in membership and a crisis in funding."

Ho ho ho.

P.S. Prescott, why not ask one of those multi-millionaire troughers who enriched themselves at our expense during your woeful misrule of my beloved country, e.g. Mandelson or Blair?

(Hat tip: the Boiling Frog)

Where your money went: part 94

After setting up the system - cost £93 million - and running it three years - cost £30 million per year - the government's clamp-down on fraudulent passport applications has resulted in a number of potentially-fraudulent applications being turned down. The number in question is four. That's right; four. Or, to put it another way, for every £45 million spent, the government stopped one person getting a dodgy passport. None of the four had any legal action taken against them, so they probably just forgot to get their photos signed or used blue ink or something.