Snowflakes and Straws: Why Transparency Matters

Most of us are familiar with the question of which snowflake caused the avalanche. We know that no individual snowflake was the actual cause, but it’s a lesson that even harmless little snowflakes, accumulating in weight over time…can be deadly.

We’re also familiar with the idiom “the straw that broke the camel’s back”, and know that it wasn’t a particular straw responsible for breaking the camel’s back, it was the cumulative weight of all the straws which brought things to less than a straw’s weight away from the breaking point.

In both cases, if someone had been measuring and inspecting the situation, tragedy might have been averted. These days, people do actually monitor snow buildup and related conditions to predict the likelihood of an avalanche. Similarly, beasts of burden — be they actual animals or commercial vehicles — are generally monitored to ensure they are not overloaded.

The takeaway here is that by managing things properly, we can often avoid bad outcomes. CPAs are often fond of saying, “You can’t manage what you can’t measure.”

In democracies such as ours, the people are supposed to be the ultimate authority — we are the Board of Directors. The official Commonwealth of Massachusetts organizational chart even depicts this, with the Governor, Legislature and all state departments being subordinate to the people.

That means we the people are ultimately responsible for managing how things run. And that’s where we run into a problem, because we can’t manage what we can’t measure, and the state government — which reports to us — won’t provide transparency into how it operates. Unlike snowflakes, government programs come with significant costs and risk, and are often riddled with waste, fraud and abuse.

In our personal lives, when we hear “budget”, as in our household budget or the departmental budget where we work, we equate that to total spending and income.

Massachusetts state government takes over 40% of the total amount they spend each year and classifies it as “non-budget”, “capital” and “other”. The remaining 60% or so, which was about $28 billion in fiscal year 2008, is called “the budget”.

As a result, most of us are looking at how $28 billion is being spent, and we’re not even aware of another $21 billion the state government spent. No matter what you call it, over 40% of total state government spending isn’t even discussed by the people who work for us, so how can we even begin to manage things?

A tenacious person CAN find all the top-level buckets of “budget”, “non-budget”, “capital” and “other” which do roughly add up to the total state government spending! That’s the good news. The bad news is that person would quickly find that there is no way to figure out how all that money is actually spent because expenditures are grouped into line items which can include any number of things which add up to amounts ranging from thousands to billions of dollars.

Just as with snowflakes and straws, each government expenditure may seem harmless and justified, perhaps even good — but unless we can see every one, there is no way we can manage them. Only total government transparency will allow us to prevent more fiscal avalanches and broken taxpayer backs.