But there is an additional problem when a congresscritter makes a big song and dance about the “$600 hammer” and uses it as an example of government waste instead of using it as an example of dubious accounting that could be used to hide waste but probably didn’t in this case. This article is about the mythical costs and how they have mundane explanations that don’t really support the song and dance.
I don't see a problem with a congressperson taking the accounting at face value and assuming it means what it says. Our accounting should be trustworthy.
It was purely a stunt for the congresscritter in question; they were not fooled into thinking that the hammer had really cost that much. If they had been honest, they would have talked about how the repair kit cost a lot of money, and tried to figure out if it had been worth it. Along the way they could have discussed the accounting fiction by which the cost of assembling the kits from bulk purchases of common tools such as hammers and screwdrivers had been baked into the prices of the items themselves. But since all they wanted was soundbites for television news shows to repeat over and over, the simpler and more emotional narrative was what worked best for them. They created the myth in order to profit from the outrage that it generated. Sound familiar?
If their point was to protest the poor accounting practices, calling attention to the more ridiculous consequences is a good way to do that.
Likewise, if their point was to protest potentially wasteful spending and fraud. Even if they couldn't be certain there was waste or fraud because of the lack of transparency in accounting, it's fair for them to call attention to the accounting practices by pointing out how they appear to imply waste and fraud.
You’re inventing good motives that didn’t exist. The hammer was merely a bad example of government waste. Government waste certainly exists, but this was a flawed example. The congresscritter found the flaw useful, nothing more.
> It was purely a stunt for the congresscritter in question; they were not fooled into thinking that the hammer had really cost that much.
As far as I can tell the hammer "really did" cost that much in every meaningful sense. The government's accounting said they'd paid $435 for a hammer and they didn't have a problem with that. Whether the government was getting ripped off by some dude buying a hammer at a hardware store for $10 and selling it for $435, or by some lab doing unbudgeted R&D and concealing the cost of it in the hammer invoice, is not really here nor there. It generated outrage because it really was outrageous.
No, it really wasn’t outrageous. It was bad accounting, but not an outrageous waste of money.
They were essentially building repair kits that could be shipped off to military bases and used to maintain particular pieces of equipment. The contractor bought the tools and spare parts in bulk, marshaled them all at some warehouse somewhere, and then broke down the bulk items into individual kits. A palette full of hammers got broken up so that each kit had exactly one hammer. The same has to happen for all of the other tools and items in the kit.
That’s a useful service and it is definitely worth paying money for. If you want a good example, check out this video: https://www.youtube.com/watch?v=FxBgTDpsUC0. You can see how this would be used: in the 1940s the army was setting up bases everywhere, and they all needed to communicate with each other. So obviously you ship out teletype machines, a repair kit or two, a pile of manuals, and a platoon of Signal Corps engineers to keep the teletypes in working order. The kit is mostly common tools, but if every base had to order every one of those items individually then it would be chaos. Logistics wins wars, and this is a very good example of how.
Then whoever did the bookkeeping recorded it as if they had purchased COTS items each with some normal price, instead of doing it as a contracted service with both material and labor costs. You see how one bookkeeping method can be used to generate outrage for political gain, while the other cannot? It was an entirely cynical manipulation on the part of the politician(s) in question.
> Then whoever did the bookkeeping recorded it as if they had purchased COTS items each with some normal price, instead of doing it as a contracted service with both material and labor costs.
OK, and why was that? Like, they were essentially embezzling this "R&D cost"; even if they were embezzling for the sake of buying useful military equipment, embezzling is still an outrage, I think rightly.
"Embezzlement is [...] where someone takes money or assets that were entrusted to them and uses them for a different purpose than for what they were intended." That would seem to apply just as much to spending funds on useful military equipment that's different from what they were allocated for as it does to spending them on blackjack and hookers. If the funds were being spent correctly then why would they be accounted for falsely?
> If the funds were being spent correctly then why would they be accounted for falsely?
How should I know? There’s never been any hint that the funds were spent on the wrong items. After all, the military has a rather large budget for spare parts and repair equipment, and Congress doesn’t micromanage how many hammers they are allowed to buy.
Most likely it was just an honest mistake. Someone used form P instead of form Q (or told the contractor to), and accounting didn’t notice. Indeed, if this were evidence of a crime I think the politician in question would have lead with that, rather than pointing it out as an example of government waste (which is bad but not generally criminal).
> There’s never been any hint that the funds were spent on the wrong items.
How would we ever know, if they can be incorrectly accounted for and no-one cares?
> Indeed, if this were evidence of a crime I think the politician in question would have lead with that, rather than pointing it out as an example of government waste (which is bad but not generally criminal).
Proving intent is a lot harder. If the government is overpaying its contractors... there's probably crime going on there too, but it'll be the nudge-wink kind that's very hard to prove. You funnel an overlarge contract to them, then a few years later after you've gone around the revolving door they funnel an overlarge contract to you. That's a crime, but it doesn't leave any evidence except, well, overly large expenditures in the accounts.
> How would we ever know, if they can be incorrectly accounted for and no-one cares?
I am saying that they purchased the correct items. We _can_ know that because there is an itemized list of items that they purchased.
> Proving intent is a lot harder. If the government is overpaying its contractors... there's probably crime going on there too, but it'll be the nudge-wink kind that's very hard to prove.
Don’t misunderstand, I never said that this wasn’t plausible. I just said that there’s no evidence of it. And if there had been evidence, ~30 years ago when this was a current event, the aforementioned politician would have mentioned it. Remember, this guy was looking for soundbites that would make himself look good. Finding government waste made him look good, but finding corruption would have been even better for him.
Worse, even the allegation that this was a wasteful purchase doesn’t really hold up either. A $435 hammer (or a $600) hammer makes for a great soundbite, and plenty of easy outrage from the average voter. But it hinges on nobody looking too closely, because the reality is that they just paid a contractor to purchase COTS parts and assemble them into repair kits. There’s nothing outrageous about that, once you get past the odd bookkeeping.
The most outrageous thing about it is that the politician relied on the “$600 hammer” story for years without much push–back from the media. The media in general should be much more skeptical of things that politicians say. They should check the facts independently, and they should report on the truth or falseness of the statements.
> I am saying that they purchased the correct items. We _can_ know that because there is an itemized list of items that they purchased.
The purchased items were purchased, but apparently a significant chunk of money allocated for purchasing them was instead diverted to this dubious "R&D charge". That's exactly what embezzlement would look like.
> Don’t misunderstand, I never said that this wasn’t plausible. I just said that there’s no evidence of it. And if there had been evidence, ~30 years ago when this was a current event, the aforementioned politician would have mentioned it. Remember, this guy was looking for soundbites that would make himself look good. Finding government waste made him look good, but finding corruption would have been even better for him.
As far as I'm concerned the bad accounting - and the fact that it wasn't corrected for years - is adequate evidence in itself. Yes, it's possible that it was merely monumental incompetence rather than wilfully inflating payments. But the most likely explanation is that it was corruption, of the normalized you-scratch-my-back-I'll-scratch-yours kind that the participants probably don't even consciously think of as fraud any more.
But there is an additional problem when a congresscritter makes a big song and dance about the “$600 hammer” and uses it as an example of government waste instead of using it as an example of dubious accounting that could be used to hide waste but probably didn’t in this case. This article is about the mythical costs and how they have mundane explanations that don’t really support the song and dance.