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Archive for March 10th, 2010

Do my eyes deceive me? Has you-know-what frozen over? Something strange clearly has happened in the universe, because the Washington Post’s editorial page has published a very sensible piece about the Postal Service, noting the system is fundamentally unsound and stating that privatization is the only realistic long-term option:

Approaching the limits of its federal credit line, the USPS must change drastically or go bust. …Postmaster General John E. Potter…has acknowledged the scope of that challenge, and last week he proposed new product lines, efficiency improvements and workforce attrition to generate $115 billion in revenue or savings between now and 2020. But that’s not even half the projected losses. To really transform, the Postal Service needs congressional action. Some 26,000 of the Postal Service’s 32,000 post offices lose money. …There is only so much that can be accomplished without tackling the item that accounts for 80 percent of the Postal Service’s expenses: labor costs. To be sure, 50 percent of postal workers come up for retirement in the next decade, and that will help cut costs. But attrition has its limits. Management and labor must aggressively tackle uncompetitive wages, benefits and work rules — including no-layoff clauses that cover most personnel. …Given the state of technology, privatization is probably the only long-term solution for the USPS. But it is so saddled with legacy costs that no investor would touch it. If Congress gives management the tools it needs to meet the crisis, and if management uses them effectively — two big ifs, we admit — the Postal Service will have a chance to get its house in order and one day attract private capital, as European postal services have done.

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This is quite a place. Every possible luxury car is sold here, including ones I’ve never heard of (if you have more than one Lotus, do you have Loti or Lotuses?). The yachts in the harbor are enormous. Best of all, there is no income tax. And because European nations are much better than the United States about letting people escape without fascist exit taxes, Monaco has attracted many wealthy people from all over Europe.

I give a speech to their business association tomorrow before heading back to the United States.

By the way, this is not exactly a fun trip. Everything is too expensive, and it is too cold to vegetate in the sun. I could go to the casino, I suppose, but I find gambling tedious and they probably wouldn’t even allow peasants like me to enter the place.Be envious of me when I go to Cayman, not when I’m in Europe in March.

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Texas has a small state government and no state income tax. California has a bloated state government and a punitive state income tax. Here’s a simple quiz: Which state is doing better? The answer is obvious, as Michael Barone explains:

Democratic majorities have obediently done the bidding of public employee unions to the point that state government faces huge budget deficits. Gov. Arnold Schwarzenegger’s attempt to reduce the power of the Democratic-union combine with referenda was defeated in 2005 when public employee unions poured $100 million — all originally extracted from taxpayers — into effective TV ads. Californians have responded by leaving the state. From 2000 to 2009, the Census Bureau estimates, there has been a domestic outflow of 1,509,000 people from California — almost as many as the number of immigrants coming in. Population growth has not been above the national average and, for the first time in history, it appears that California will gain no House seats or electoral votes from the reapportionment following the 2010 census. Texas is a different story. Texas has low taxes — and no state income taxes — and a much smaller government. Its legislature meets for only 90 days every two years, compared with California’s year-round legislature. Its fiscal condition is sound. Public employee unions are weak or nonexistent. But Texas seems to be delivering superior services. Its teachers are paid less than California’s. But its test scores — and with a demographically similar school population — are higher. California’s once fabled freeways are crumbling and crowded. Texas has built gleaming new highways in metro Houston and Dallas-Fort Worth. In the meantime, Texas’ economy has been booming. Unemployment rates have been below the national average for more than a decade, as companies small and large generate new jobs. And Americans have been voting for Texas with their feet. From 2000 to 2009, some 848,000 people moved from other parts of the United States to Texas, about the same number as moved in from abroad. That inflow has continued in 2008-09, in which 143,000 Americans moved into Texas, more than double the number in any other state, at the same time as 98,000 were moving out of California. Texas is on the way to gain four additional House seats and electoral votes in the 2010 reapportionment.

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