1\ Bit of a nerdy thread. Gato's tweet below reminds me that there is a lovely sub-literature within Public Choice Theory that has to do with federal sub-units competing for federal aid by letting their houses fall into disorder...
2\ The paper I'm thinking of is Competing For Aid, in Gordon Tullock's Virginia Political Economy
The whole paper is lovely, but the punchline comes early:
If you know you have a mess big enough that the feds can't ignore it, it pays (literally) to not fix it yourself
The whole paper is lovely, but the punchline comes early:
If you know you have a mess big enough that the feds can't ignore it, it pays (literally) to not fix it yourself
3\ The same thing happened when the Federal Highway system appeared.
Government spending crowded out local and private spending, often resulting in *worse* infrastructure
This happens because central planners never have enough information to make correct decisions
Government spending crowded out local and private spending, often resulting in *worse* infrastructure
This happens because central planners never have enough information to make correct decisions
4\ What's this have to do with COVID-19?
Consider Iceland: nobody was going to bail them out, so they had no choice but to adopt effective policy
Now consider Cuomo: with federal aid in the offing, he could afford to use draconian lockdowns and whine about unneeded ventilators
Consider Iceland: nobody was going to bail them out, so they had no choice but to adopt effective policy
Now consider Cuomo: with federal aid in the offing, he could afford to use draconian lockdowns and whine about unneeded ventilators
5\ The lessons here are threefold:
1) Everyone should read Gordon Tullock. He's chatty and fun and profound
2) The state cannot calculate, only individuals can
3) Federalism is good when it devolves power to the locals, bad when retains a "subsidy carrot" to distort behavior
1) Everyone should read Gordon Tullock. He's chatty and fun and profound
2) The state cannot calculate, only individuals can
3) Federalism is good when it devolves power to the locals, bad when retains a "subsidy carrot" to distort behavior
