Washington Monument Syndrome (or, 10 Things the Shutdown Spared)

It's official: The federal government of the United States has shut down. Well, sort of. 

You see, despite the media outcry, the partisan banter - and, yes, the 800,000 federal workers who were furloughed today - the federal government largely goes marching forward without a hitch from the perspective of the vast majority of Americans. While the tactics of either political party are debatable, and a less myopic solution is preferable no matter your political persuasion, it's quite clear that the things that are cut when the government shuts down are fewer than one would expect, not to mention rather arbitrary.

Or perhaps, these things are not arbitrary. "Washington Monument Syndrome" is a term which describes a phenomenon whereby government agencies faced with cuts will tend to cut the most visible and desirable elements of their programs in attempt to cull public support for restoration of funding. As this article describes it:

"When threatened with even modest cuts, cutthroat administrators can shut down only their departments’ most visible services and then sit back in comfort while they wait for legislators to capitulate. The syndrome has played a crucial role in making our government what it is today: a bloated monstrosity that is physically incapable of consuming less than it did the day before." 

S*** My Future Fed Chair Said

In honor of Janet Yellen, the former President of the San Francisco Federal Reserve, being recently elevated to "frontrunner" status for the chair of the Federal Reserve Board, I present a list of past quotations from Mrs. Yellen here. All emphasis is my own.

"While a tightening of credit to the subprime sector and foreclosures on existing properties have the potential to deepen the housing downturn, I do not consider it very likely that such developments will have a big effect on overall U.S. economic performance." - Speech to the Money Marketeers of New York University, April 26, 2007 (link) 

Of course, these events very much did have an impact on overall economic performance, and continue to do so today, some 6 years later.

Escheat Law: The Revenue Motive

Modern escheat law is the process by which the state designates property held by one party but owned by another as "abandoned" and seizes it from the current holder. Most people have heard very little about modern escheat law, and for good reason: While states claim that the escheatment of unclaimed property is intended to look out for the rightful owners of the property, many would be surprised to know how much revenue is generated for state governments in the process.

Aside from the obvious criticisms that can be made against the state being an effective protector of property rights (see: eminent domain, asset forfeiture, property taxation, etc.), I will argue here that the primary, and perhaps sole motivation for modern unclaimed property law is the revenue motive. The various points of evidence toward this conclusion are: (a) the low percentages of property reunited with owners once in the hands of state treasuries; (b) court opinions which have explicitly referred to these laws as revenue raisers; (c) the large percentage of property abrograted which goes to the state's general fund rather than a dedicated trust fund for claimants; and (d) recent moves by state governments to shorten the period of inactivity required to deem property as "abandoned."