Friday, January 8, 2016

The Economics of Parks and Recreation - Swing Vote

[Heavily conceptually inspired by "The Economics of the Office"]

Parks and Recreation, a mockumentary style comedy in the vein of The Office, explores the lives of employees at the Parks and Recreation department in the fictional Indiana city of Pawnee. One of the main sources of conflict in the show is between the Director of Parks and Rec, the grizzled anti-government Ron Swanson, and the Deputy Director, the cheery (and pro-government) Leslie Knope. Eventually, Leslie is elected to City Council, and starts a crusade for more and more government involvement in the lives of the citizens of Pawnee. 


One such crusade, as seen in the episode "Swing Vote", is to stop the closing of the Pawnee Palms Public Putt-Putt, a government subsidized mini-golf course. Ron Swanson, ever the budget hawk, has moved to cut funding, citing his belief in "cutting useless government projects". Ron notes the course costs taxpayers $9000 a year to fund, and views it as little more than government waste.

The issue will be decided by a City Council vote the next day. A desperate Leslie tries to whip votes to "save" the course, citing how it's "good for families" and "a job creator".

Leslie's second argument, that the subsidized course is a "job creator", is one of the most persistently enduring economic fallacies. The city of Pawnee is not "creating" any jobs at all. All they are doing is transferring wealth from one group (the taxpayers) to another (those who are employed by the Public Putt-Putt). While jobs may exist as a result, these aren't "created" in the same sense that someone could create new jobs by opening a new restaurant and employing people there. Jobs of that sort wouldn't exist without providing real, economic value to the patrons of the restaurant, the employer, and so on. Government jobs, like at the Public Putt-Putt, don't face the same constraints. They shall continue to exist as long as they are funded by the government, which they often are.



One Councilman, Jeremy Jamm, holds the swing vote on the issue. Leslie, eager to get his vote, takes him golfing at the Public Putt-Putt, and plies him with copious amounts of snow cones to try to sway his favor. Leslie's actions show the way that many decisions are actually made in government, through trading favors and excessive lobbying. Ostensibly acting for the "public good", Jamm is actually making his vote based on what he personally can get out of it. Individuals still face incentives, even in government, as stated in public choice theory.

Ron Swanson, sensing that Leslie might try to influence Jamm, also arrives at the course. He consistently states the downsides of the course, namely, that "this ridiculous play palace costs the taxpayers thousands of dollars a year". Leslie responds by again noting that "everyone loves it". Some people may in fact enjoy the Public Putt-Putt (at the government subsidized pricing), but all taxpayers might not. Ron is defending those taxpayers (likely including himself) that do not enjoy Putt-Putt, and are yet forced to pay for it through their tax dollars.



Eventually, Jamm is swayed to Ron's side (after Ron beats Leslie in a game of mini-golf). An angry Leslie confronts Ron the next morning, who cites his principles as the reason for his opposition. Jamm later meets Leslie in her office, brazenly offering to switch his vote for the right offer. Leslie seems sickened by his political graft, but Jamm notes that this system of trading favors for political support "is just how people like us [politicians] operate".

Leslie, apparently drawing a line in the sand, refuses to make a deal, and Putt-Putt is defunded. However, she later notes a plan to authorize funding through a ballot proposal, which she believes will pass. Putt-Putt's passing is a classic example of concentrated benefits, dispersed costs. Those who stand to benefit (former employees of the Public Putt-Putt, former patrons) will eagerly vote for its authorization. The apathetic (or indifferent) taxpayers who don't support Putt-Putt will likely not find it worth their time to go vote to save a few cents on taxes per year.

This process is repeated over and over, for all kinds of government projects, and eventually those few cents add up. That is why there is consistent government growth. That is why so many boondoggles, like a publicly subsidized mini-golf course, exist. When economic decision-making is politicized, this is the end result.

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