How Bureaucrats and Politicians Conspire to Rip Off Taxpayers

I can say with great confidence that government bureaucrats are overpaid compared to people in the productive sector of the economy.

Why am I sure that this is true, particularly when the so-called Federal Salary Council claims bureaucrats are underpaid?

For the simple reason that the “job opening and labor turnover” data from the Department of Labor is the best way to measure whether a group of workers is overpaid or underpaid.

And you probably won’t be surprised to learn from this data that bureaucrats at the federal, state, and local level are only about 1/3rd as likely to quit their jobs as workers in the private sector.

They’re less likely to leave their jobs, needless to say, because they generally get paid more than they’re worth.

But just in case you think this data is unconvincing, let’s look at some additional research.

Sita Slavov of the American Enterprise Institute explores this topic in an article for U.S. News & World Report.

…studies show that, while the salaries of public sector workers are roughly in line with those paid in the private sector, public sector workers receive substantially more generous fringe benefits, such as pensions, health benefits, vacation and job security. …Why are public sector workers so highly compensated? And, why is their compensation so heavy on benefits? Workers certainly value benefits, such as access to group health insurance, and many benefits are tax advantaged. But do public sector workers really value these benefits more than private sector workers? Edward Glaeser and Giacomo Ponzetto have attempted to address these questions in a recent National Bureau of Economic Research working paper entitled “Shrouded Costs of Government: The Political Economy of State and Local Public Pensions.” The authors present a formal model in which public sector compensation is determined by a political process that pits politicians against each other in a competition for votes. They show that this political process results in a public sector compensation package with generous benefits.

In other words, bureaucrats are over-compensated, and much of their excess compensation is in the form of generous fringe benefits.

The new study cited by Sita looks at why this happens.

Public sector workers have an information advantage over other voters. In particular, they are better informed about their own compensation packages. Moreover, this information advantage is more pronounced for benefits than salary. This is plausible because information about public sector salaries is available to the general public… In contrast, information about public sector pensions is less widely available, and because of complications involved in valuing future pension benefit promises, it is also more difficult to interpret. As a result, politicians propose generous public sector compensation that is tilted towards benefits rather than salary. A politician who tries to scale back public sector benefits will lose support from public sector voters (who are hurt by the benefit cut) without gaining much support from other voters (who gain from lower taxes but are poorly informed).

My interpretation of these findings is that politicians and bureaucrats basically conspire to rip off taxpayers.

In exchange for campaign contributions and other forms of political support, the politicians give the bureaucrats excessive compensation. But they make it difficult for taxpayers to figure out how they’re getting robbed by concentrating a big share of the excess in harder-to-measure fringe benefits.

Another advantage of that approach, by the way, is that the bill for all the retiree benefits doesn’t come due until some point in the future, by which time the politicians who put taxpayers on the hook often have retired or moved on to some other position.

But these promises do translate into real costs sooner or later, as taxpayers have painfully learned in places such as diverse as California and Greece.

Though, to be fair, governments get into fiscal trouble because they also make irresponsible commitments to all workers, including those in the private sector. America’s long-term fiscal crisis, for instance, is because of poorly designed entitlement programs.

Bu this isn’t an excuse to do nothing. It just means we have to reform entitlements and also trim back the excessive compensation for the bureaucracy. This video elaborates.

P.S. If you still aren’t convinced that bureaucrats are overpaid, look at this remarkable map.

P.P.S. You probably won’t be surprised to learn that bureaucrats also don’t work as hard as the rest of us.

P.P.P.S. I’m more concerned about the overall size of government than I am about the pay levels of bureaucrats. I’d much rather focus on shutting down the Department of Housing and Urban Development, for instance, instead of simply trying to reduce the pay of HUD bureaucrats.

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Great Moments in Government Waste

Taxpayers all across America send lots of money to Washington, DC, in part because we’re supposed to believe that redistribution is a legitimate and desirable function of the federal government.

But this is a very perverse form of redistribution. All that money going to Washington helps subsidize a network of overpaid bureaucrats, fat-cat lobbyists, corrupt politicians, and well-heeled interest groups.

Indeed, as shown in this map, 10 of the 15 richest counties in the country are in the Washington metropolitan area.

One of those wealthy areas is Arlington County, VA, just across the river from Washington. Home to thousands of federal bureaucrats and other DC insiders, Arlington is similar to Washington in that there is a lot of wasteful spending. Sort of makes you wonder if local bureaucrats and federal bureaucrats ever meet at bars after work and brag about who wasted the most money that day?

Anyhow, here are some sordid details from a Washington Post story.

A wall made of etched glass opens the rear vista to newly planted landscaping. Embedded in the floor are heating elements intended to ward off the cold weather and keep winter-weary feet cozy. …And the price tag: $1 million. “Is this made of gold?” asked commuter Yohannes Kaleab, examining the concrete-and-stainless-steel bench that is part of the new, seven-figure bus shelter. “What?” asked Robin Stewart as he learned of the cost of the structure while waiting for a bus there last week. “That’s ridiculous. From a citizen, from a voter, whoever put that budget through needs to get their butt canned. It’s an outrage.” The “super stop,” which opened March 11, is the first of 24 new bus stops that will also accommodate Arlington’s long-planned streetcars. …It will shelter 15 people at a time.

$1 million for this bit of glass, metal, and concrete?!?

That sounds kind of expensive, but we can be comforted by the fact that thoughtful public servants predict future savings.

“When you do a prototype, you end up heavily front-loading on the costs,” said Dennis Leach, Arlington’s transportation director.

So how much will taxpayers save on the remaining 23 stops? Well, the good news is that they won’t cost $1 million each. The bad news is that the government doesn’t exactly save a lot of money when doing bulk purchases.

“Our goal if at all possible is to do it for less,” Leach said. The county has budgeted $20.8 million for the remaining 23 stops, or about $904,000 for each one.

Gee, knock me over with a feather. The additional bus stops will “only” be $904,000!

That’s not counting cost overruns, which are an inevitable reality with government budgeting, so I think it’s safe to assume that the final cost will be far higher.

So why do governments waste money like this?

Part of the answer, of course, is that politicians are inherently wasteful. But there’s another factor at play. Politicians are especially wasteful when they can spend money that isn’t collected from their own taxpayers.

And readers from other parts of America doubtlessly will be overjoyed to learn that their paying for a big chunk of this boondoggle.

Federal and state transportation money paid 80 percent of the costs.

With taxpayers outside of Arlington paying such a high share of the cost, we should think of ourselves as lucky that the bus stop didn’t cost $10 million!

But here’s the most amazing part of the story.

What’s the most important part of a bus stop? In theory, a bus stop can be nothing more than a sign indicating the spot where you should wait for a bus.

But if you’re going to build a structure, the most valuable feature – at least from the perspective of riders – is that you will be protected from the weather. So what sort of protection are riders getting as a result of this $1 million boondoggle? Meh, not so much.

…the bus shelter is “pretty, but I was struck by the fact that if it’s pouring rain, I’m going to get wet, and if it’s cold, the wind is going to be blowing on me. It doesn’t seem to be a shelter. It doesn’t really shelter you very much . . . you can get pretty soaked in two minutes.” Her opinion was shared by some on Columbia Pike trying it out.

Gee, isn’t this wonderful. Some contractors doubtlessly lined their pockets building this white elephant. Some consultants doubtlessly fattened their bank accounts with all the nonsense that is now part of the “planning” process.

But taxpayers, as usual, got the short end of the stick. They got taken for a ride, figuratively. And if they actually use the bus stop, they can get taken for a ride, literally, so long as they don’t mind getting wet.

P.S. And let’s not forget that Obama wants some more class-warfare tax hikes to finance more of this “investment.”

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The Tax Code Shouldn’t Steer Capital to State and Local Governments at the Expense of Private Investment

I’m a proponent of a pro-growth and non-corrupt tax code.

I mostly write and talk about the flat tax, though I’d be happy to instead accept a national sales tax if we could somehow get rid of the 16th Amendment and replace it with something so ironclad that even Justices such as John Roberts and Ruth Bader Ginsburg couldn’t rationalize that the income tax was constitutional.

But since there’s no chance of any good tax reform with Obama in the White House, there’s no need to squabble over the best plan. Instead, our short-term goal should be to educate voters so that we create a more favorable intellectual climate for genuine reform in 2017 and beyond.

That’s why I’ve argued in favor of lower tax rates and shared the latest academic research showing that tax policy has a significant impact on economic performance.

But tax reform also means getting rid of the rat’s nest of deductions, credits, exemptions, preferences, exclusions, shelters, loopholes, and other distortions in the tax code.

Why? Because people should make decisions on how to earn income and how to spend income on the basis of what makes economic sense, not because they’re being bribed or penalized by the tax code. That’s just central planning through the back door.

And if you don’t think this is a problem, I invite you to peruse three startling images, each of which measures rising complexity over time.

1. The number of pages in the tax code.
2. The number of special tax breaks.
3. The number of pages in the 1040 instruction booklet.

Today’s Byzantine system is good for tax lawyers, accountants, and bureaucrats, but it’s bad news for America. We need to wipe the slate clean and get rid of this corrupt mess.

But as I explain in this appearance on Fox Business News, we won’t make progress until we control the burden of government spending and unless we make sure that deductions are eliminated only if we use every penny of revenue to lower tax rates.

I’ve previously explained why it’s okay to get rid of itemized deductions for mortgage interest, charitable contributions, and state and local tax payments.

Let’s now take a moment to explain why the internal revenue code shouldn’t be artificially steering capital toward state and local governments at the expense of private investment.

Under current law, there’s no federal income tax imposed on interest from municipal bonds. No matter how rich you are, Uncle Sam doesn’t tax a penny of the interest you receive if you use your wealth to lend money to state and local governments.

Should the tax code steer money to Detroit politicians?

This “muni-bond exemption” has two unfortunate effects.

• It makes it easier and cheaper for state and local governments to incur debt, thus encouraging more wasteful spending by cities such as Detroit and states such as California.
• By making the debt of state and local governments more attractive than private business investment, the loophole undermines long-term growth by diverting capital to unproductive uses.

The politicians at the state and local level certainly understand what’s at stake. They’re lobbying to preserve this destructive tax break. Here are some excerpts from a story in the New York Times.

Mr. Firestine [of Montgomery County, MD] is on the front lines of a lobbying campaign by local and state governments, bond dealers, insurers and underwriters that is trying to pre-empt any attempt to limit or even kill the tax exemption. …At present, the federal government forgoes about $32 billion a year in taxes by exempting the interest that investors earn from municipal bonds. …The National Commission on Fiscal Responsibility and Reform, known as the Simpson-Bowles commission, has suggested taxing all municipal bond interest, not just the interest paid to people in the top bracket. …Officials of some other government groups, like the New York City Housing Development Corporation, have formed a coalition with Wall Street groups like the Bond Dealers of America to lobby on the issue. But there is the sense of an uphill battle. …Capping the tax exemption would cause high-bracket taxpayers to look for higher-yielding investments, he said, and the county would have to offer more interest to lure them back.

Based on the last sentence in the excerpt, I gather we’re supposed to think it would be bad news if we got rid of this tax preference and taxpayers shifted more of their money to private-sector investments.

Needless to say, that’s misguided. Only in the upside-down world of Washington do people think it is smart to create tax preferences that lead to more wasteful spending by state and local governments, while simultaneously imposing punitive forms of double taxation on saving and investment in the private sector.

By the way, this shouldn’t be an ideological issue. If this amazing chart is any indication, leftists who want workers to enjoy more income should be clamoring the loudest for a tax system that doesn’t tilt the playing field against capital formation.

P.S. While simplicity is a good goal for tax policy, you will understand why it shouldn’t be the only goal if you check out this potential Barack Obama tax reform plan.

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Another Great Victory in the Drug War

I’ve shared some very interesting commentary and opinions on the Drug War from folks such as John Stossel, Mona Charen, Gary Johnson, Pat Robertson, Cory Booker, and Richard Branson.

And I’ve shared some horror stories about “asset forfeiture,” an odious procedure that allows the government to steal private property without any finding of guilt.

• The DEA trying to confiscate a commercial building because a tenant sold some marijuana.
• The government seeking to steal a hotel because some guests sold some marijuana.
• The feds grabbing cash from innocent bystanders in legal cases.
• A local government trying to steal a man’s car because someone else drove it while intoxicated.

But sometimes an anecdote is the best way of exposing the silliness of the War on Drugs.

Here are some surreal tidbits from a Yahoo Sports report.

Bonnie Jonas-Boggioni, 65, and her husband were driving home to Plano, Texas from Columbus after attending her mother-in-law’s funeral when a pair of black police SUV’s stopped the couple a few miles outside of Memphis. “Knowing I wasn’t speeding, I couldn’t imagine why,” Jonas-Boggioni told the Columbus Dispatch. “They were very serious. They had the body armor and the guns.”

What was the supposed “probable cause” that led the police to make this stop? Ummm…..

On the back of Jonas-Boggioni’s car was a Buckeye leaf decal, similar to the one players’ have on their helmets, and cops mistakenly thought it was marijuana leaf. Yes, really. “What are you doing with a marijuana sticker on your bumper?” one of the cops asked Jonas-Boggioni. After trying to explain that the sticker was not a marijuana leaf and that she and her husband were not trafficking drugs cross-country, the police advised Jonas-Boggioni to remove the sticker as to not cause any more confusion.

As a fan of SEC football, I certainly agree that there’s something wrong with supporting the Ohio State Buckeyes. But bad judgement shouldn’t be against the law, much less a cause for a legal encounter with the government.

Particularly when the cops are showing their lack of knowledge.

Tennessee police apparently aren’t botany experts. If they were, they’d know a marijuana leaf has seven leaflets (see above picture) and a narrow shape as compared to the Buckeye leaf, which is fat and has five leaflets. …As for Jonas-Boggioni, she acknowledged the cop’s wishes, but got back in her car without removing the sticker. “I didn’t take it off,” Jonas-Boggioni told the paper. “This little old lady is no drug dealer.”

But that doesn’t mean other little old ladies aren’t drug dealers.

Click here is you want to read about a grandmother’s encounter with the Drug War.

Now ask yourself why we should be paying higher taxes to support this failed effort.

And remember that you can do something about it, as shown by some good people in Montana.

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The Problem Is Federally Subsidized School Lunches, Not Michelle Obama’s Healthy Food Initiative

Some people are grumbling that the First Lady has taken the joy out of school lunches. She’s identified with the “Healthy, Hunger-Free Kids Act of 2010,” which uses federal funding to coerce schools into providing meals with fewer calories.

Here’s a radical idea for the First Lady. Parents should be responsible for their own kids.

But I think this criticism misses the point. The problem is not overweight kids, as one side argues, or politically correct micro-managing, as the other side claims.

Instead, we should be asking the fundamental question about whether subsidizing school lunches is an appropriate function of the federal government.

I’ve previously argued that the federal government should get out of the business of income redistribution and means-tested programs. In part, this is because the Constitution does not authorize any federal involvement in this area.

But I also think the evidence is very clear that the welfare state is undermining progress in reducing poverty, often by trapping people in lives of dependency.

And it also sometimes brings out the worst in people, as you can see in this horrifying story about a welfare couple in Florida and this sad story about a girl in Connecticut (though England has equally reprehensible examples, as you can see here, here, and here).

Getting back to the main topic of this post, here are some passages from a report in the New York Times.

Outside Pittsburgh, they are proclaiming a strike, taking to Twitter and Facebook to spread the word. In a village near Milwaukee, hundreds staged a boycott. In a small farming and ranching community in western Kansas, they have produced a parody video. And in Parsippany, N.J., the protest is six days old and counting. They are high school students, and their complaint is about lunch — healthier, smaller and more expensive than ever. The Healthy, Hunger-Free Kids Act of 2010, which required public schools to follow new nutritional guidelines this academic year to receive extra federal lunch aid, has created a nationwide version of the age-old parental challenge: persuading children to eat what is good for them.

No big surprise here. Kids want junk food. I’m actually on Michelle Obama’s side on the general issue of wanting kids to eat better and exercise more.

Where we part company is that I think bureaucrats and politicians in Washington are ill-suited to do anything right, and they’re especially unlikely to succeed in a task that has more to do with parents than government.

Here are some details about the meddling from DC.

According to the new restrictions, high school lunches must be no more than 850 calories, middle school lunches no more than 700 calories and elementary school lunches no more than 650. Before, there were no maximums. At the same time, prices have gone up about 10 cents in many districts for students who do not qualify for free lunch, both to pay for fresh fruits and vegetables and to obey a federal requirement that lunch prices gradually increase to help cover their cost. …In New York City, where school officials introduced whole-wheat breads, low-fat milk and other changes several years ago, the most noticeable change this year is the fruit and vegetable requirement, which has resulted in some waste, according to Eric Goldstein, the Education Department official who oversees food services. It is not hard to see why. At Middle School 104 in Gramercy Park on Friday, several seventh graders pronounced vegetables “gross.”

Again, I don’t sympathize with the kids who prefer junk food.

But the federal government’s clumsy efforts to intervene generate nonsense like this.

Few school districts have been as extreme in their efforts as Los Angeles, which introduced a menu of quinoa salads, lentil cutlets, vegetable curry, pad Thai and other vegetarian fare last fall. When students began rejecting the lunches en masse, the district replaced some of the more exotic dishes with more child-friendly foods, like pizza with whole-wheat crust, low-fat cheese and low-sodium sauce. But this year, even the whole-wheat pizza is gone, replaced by calzones, fajitas and other, smaller entrees with side dishes of fruits and vegetables. Nicole Anthony, the cafeteria manager at one Los Angeles school, Nimitz Middle School in Huntington Park, estimated that out of the 1,800 students, almost all of whom qualify for a free or reduced-price lunch, only 1,200, “on a good day,” now eat the cafeteria’s offerings.

At the risk of being politically incorrect, allow me to stress my earlier point that parents should be responsible for raising their kids in general, and feeding them in particular.

P.S. I can’t resist sharing this post about the “Battle of the Bums.”

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It’s Wrong for Federal Tax Deductions to Encourage Bad Fiscal Policy by State and Local Governments

I have a handful of simple rules for good tax policy.

• Keep government small, since it’s impossible to have a reasonable tax system with a bloated welfare state.
• Keep tax rates low to minimize penalties against income, production, and wealth creation.
• Since capital formation is critical for long-run growth, don’t double-tax income that is saved and invested.
• Eliminate corrupt and distorting loopholes that encourage people to make decisions that are economically irrational.

Some of these principles are interrelated. I don’t like loopholes in part because of the reasons I just listed. But I also don’t like them because politicians often claim that they need to boost tax rates to make up for the fact that they lose revenue due to various deductions, credits, exemptions, and preferences.

And sometimes a deduction in the tax code even leads to bad policy by state and local government. Today, I want to discuss preferences in the internal revenue code for state and local taxes. And I’m motivated to address this issue because some of the politicians on Capitol Hill have pointed out an inequity, but they want to fix it in the wrong way.

Under current law, state and local income taxes are fully deductible, but state and local sales taxes are only temporarily deductible. The right policy is to get rid of any deductibility for any state and local tax. But since that would create a windfall of new tax revenue for the spendaholics in Washington, every penny of that revenue should be used to lower tax rates.

Not surprisingly, the crowd in Washington doesn’t take this approach. Instead, they want to extend deductibility for the sales tax. And they may even be amenable to raising other taxes to impose that policy.

Here are some excerpts from a story in The Hill.

More than five dozen House members are pressing leaders of a tax panel to preserve a deduction for state and local sales taxes. The bipartisan group of lawmakers say it would be unfair to voters in their states not to extend the sales tax deduction, given that taxpayers would still be able to deduct state and local income taxes. …Eight states in all — Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming — currently use a sales tax, but either don’t have or have a very limited state income tax. …The letter comes as many lawmakers hope to finish off an extenders package once Congress returns to Washington after November’s elections. Lawmakers will have to grapple with expiring Bush-era tax rates — just one part of the so-called fiscal cliff — when they return, and tax extenders could be tacked on to a broader package. The Senate Finance Committee has already passed an extenders package of its own, which included a two-year extension — at a cost of an estimated $4.4 billion over a decade — of the sales tax deduction.

I have some sympathy for these members of Congress. They represent states that have wisely decided not to impose income taxes, yet the federal tax system rewards profligate high-tax states such as New York and California with a permanent deduction for state and local income taxes.

This is a very misguided policy. It means that greedy politicians such as Governor Brown of California or Governor Cuomo of New York can raise tax rates and tell voters not to get too upset because they can deduct that additional burden. This means that a $1 tax hike results in a loss of take-home pay of as little as 65 cents.

This is what a fair tax code looks like

But you don’t cure one bad policy with another bad policy. A deduction for state and local sales taxes just augments the IRS-enforced preference for bigger government at the state and local level.

The right answer is the flat tax. Put in place the lowest-possible tax rate, which is feasible because all loopholes are wiped out.

In the case of state and local tax deductibility (or lack thereof, with any luck), that’s a win-win-win situation.

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Very Good Cartoons about the Striking Teachers in Chicago

As a general rule, I’m completely neutral about private-sector unions. As I argued in this interview, the federal government should not take sides or tilt the playing field when unions and management squabble.

I have a more skeptical view of unionized bureaucrats, though, because politicians (acting as “management”) have no incentive to be frugal since they’re spending our money and there’s no competitive pressure to be efficient.

Which is why this cartoon is the best summary of “negotiations” between politicians and union bosses, and this video is damning proof that bureaucrats are wildly over-compensated.

So it’s no surprise that I’m unsympathetic to the striking teachers in Chicago. They earn more money than the taxpayers of the city, yet they do a terrible job of educating students.

Here are some good cartoons, beginning with a gem from Michael Ramirez.

You can see some of my favorite Ramirez cartoons here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here.

Here’s another cartoon. Instead of mocking teachers for doing a crummy job, it zings them for insatiable greed (similar to this cartoon).

Lisa Benson did this cartoon, and you can review some of her best work here, here, here, here, here, here,here, here, here, and here.

Last but not least, I’m not even sure what we’re supposed to learn from this cartoon. But it implies thuggish tactics in Chicago, so let’s add it to the list.

Sort of reminds me of this cartoon about Wisconsin.

The best outcome of the strike, by the way, is to junk the government education monopoly and implement a sweeping school choice program.  Chile has reformed its education system with vouchers, as have Sweden and the Netherlands. So why shouldn’t kids in Chicago get the same opportunity?

The answer, of course, is that there’s a corrupt and symbiotic relationship between unions and local politicians. The kids are nothing more than collateral damage.

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George Leventhal Should Teach Paul Krugman about Public Finance and the Economics of Taxation

Montgomery County in Maryland is not exactly a hotbed of free market thinking or a bastion of limited government.

It’s one of the richest counties in the nation, but not because of entrepreneurship and wealth creation. Instead, it’s a bedroom community for over-paid bureaucrats, corrupt lobbyists, fat-cat contractors, and other ne’er-do-wells who commute into Washington and live off the blood, sweat, and tears of people in the economy’s productive sector.

To give you an idea of its political leanings, Obama won 72 percent of the vote in Montgomery County in 2008 and all nine members of the County Council are Democrats.

So you wouldn’t think this is a place where lawmakers ever have anything sensible to say about tax policy. But, lo and behold, one Councilman recognizes that there’s no Berlin Wall surrounding the County. As such, higher tax rates may not generated additional tax revenue if people vote with their feet.

You can listen to George Leventhal by clicking here, but here’s the relevant quote.

Secret Cato supporter?

We may be reaching a tipping point with tax rates. There’s a point beyond which you can keep raising the tax rates, but you won’t get more revenue because if people leave the county or if new businesses don’t start you’re not getting new revenue.

For the uninitiated, Leventhal is talking about…gasp…the Laffer Curve.

Folks like Paul Krugman would like you to believe that the Laffer Curve is a twisted fantasy concocted by stooges for the rich. He writes that it is “junk economics” to consider the relationship between tax rates, taxable income, and tax revenue.

In the real world, though, at least some left-leaning lawmakers realize that higher tax rates backfire if the geese that lay the golden eggs fly away (as has happened in Italy, France, and the United Kingdom).

Maybe we can take up a collection and hire Mr. Leventhal to do a bit of economics tutoring for a certain Nobel laureate?

P.S. Just in case you’re not convinced by the experiences of a local politician, there is lots of empirical evidence for the Laffer Curve.

• Such as this study by economists from the University of Chicago and Federal Reserve.
• Or this study by the IMF, which not only acknowledges the Laffer Curve, but even suggests that the turbo-charged version exists.
• Or this European Central Bank study showing substantial Laffer-Curve effects.
• Or this research from the American Enterprise Institute about the Laffer Curve for the corporate income tax.

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Chik-fil-A, Gay Marriage, and the Role of Government

Since I’ve already written that polygamy – regardless of how weird it is – is not something that demands government intervention, you won’t be surprised that I also think that gay marriage is a non-issue.

I don’t care if two guys want to get together. I don’t care if some religion (or some other group) wants to sanction their union, and I don’t care if they want to call it marriage, or make up some new word.

But I also don’t care if some churches don’t want to sanction same-sex unions. And I don’t care if some religious people don’t want to give approval to such relationships.

The good thing about freedom is that there is room for diversity. We all don’t have to be the same and think the same.

Unless, of course, government is involved. Then private differences become policy disputes.

This is why I urged non-intervention in this CNN discussion about whether local governments should discriminate against a restaurant chain merely because the top executive has religious beliefs that irk some politicians.

Some of these local politicians are nothing but Chavez-style  thugs, willing to use government coercion for arbitrary and capricious reasons. I hope my disdain was apparent in the interview.

P.S. Just to show I’m consistent, here’s my post urging that Bush’s pro-marriage program be defunded.

P.P.S. And for those who appreciate humor, there are good gay marriage one-liners among the rest of the jokes you can peruse here, here, and here.

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Taxpayers get Screwed to Finance a $537,767-Per-Year Bureaucrat

I’ve reported some horror stories about bureaucrats ripping off taxpayers with lavish compensation packages, including:

• The chief bureaucrat of a low-income California city getting almost $800,000 per year.
• Cops in Oakland getting average compensation of $188,000.
• A Philadelphia bureaucrat, after working only 2-1/2 years, nailing down a guaranteed pension of $50,000 per year.
• A New York school bureaucrat simultaneously getting a $225,000 salary and $300,000 pension.
• California taxpayers being forced to pay a fired bureaucrat $550,000 for unused vacation time.
• An employee of the New Jersey Turnpike system raking in annual compensation of $320,000.

We now have another über-bureaucrat to add to our list.

Here are the key details from the New York Post.

Take your salary cap and shove it. While Gov. Cuomo continues to push a bill that would limit New York school superintendents’ annual salaries to $175,000, Syosset, LI, Superintendent Carole Hankin — the highest paid in the state —has already circumvented the proposed ceiling. Last June, four months after Cuomo first proposed the salary cap, Hankin, 69, quietly inked a five-year contract that guarantees she will receive no less than her current salary— $405,244, The Post has learned. …“This is despicable and gives new meaning to the word ‘chutzpah,’ ” said Desmond Ryan, executive director of the Association for a Better Long Island, a developer’s lobby. “In these difficult economic times, that the school board would even consider this is a disgrace.” …Hankin’s total annual compensation comes to $537,767, including retirement funds and fringe benefits. Expenses include use of a “late-model car” and gas. She can also do outside consulting on her time off. She oversees about 6,600 students in 10 schools, yet her salary is nearly double that of New York City Chancellor Dennis Walcott, who gets $212,614, to watch over 1.1 million kids in 1,700 schools. Hankin’s first deputy, Jeffrey Streitman, rakes in $419,033 in salary and other benefits, but Cuomo’s bill would not apply to underlings. …Joshua Lafazan, an 18-year-old Syosset HS senior running for a seat on the school board, blasts Hankin’s cushy deal and the nine board members he calls her “puppets.”

Ms. Hankin and the other bureaucrats mentioned above are extreme examples, but they help underscore the problem that exists when politicians and bureaucrat unions make insider deals, swapping political support for lavish compensation levels.

Taxpayers, meanwhile, get screwed. This video explains why this is a problem at all levels of government.

What makes this so outrageous is that most bureaucrats get overpaid for position that shouldn’t even exist. If we shrink government to its proper size, the problem is mostly resolved.

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Recording Public Servants Is Not a Crime

I’ve always thought of myself as a tough-on-crime kind of guy, but I’m increasingly sensitive to the fact that my attitude is only appropriate when laws are just and moral.

Unfortunately, government increasingly is an abuser of rights rather than a protector of rights. Allow me to elaborate.

I was tempted a few days ago to say that Jay Beeber was an American hero for single-handedly putting an end to the revenue-camera scam in Los Angeles, but I now have someone who truly deserves that label.

Michael Allison is, by all appearances, an ordinary American from a small town in Illinois. He is now is threatened with 75 years in jail because utterly reprehensible (and probably corrupt) officials are upset that he recorded them in the course of their taxpayer-financed duties.

What makes him a hero is that he refuses to let the local government seduce him into a plea deal that would keep him out of jail – but require him to admit guilt to something that shouldn’t be a crime.

Here’s an amazing – and distressing – set of news clips from a local news station.

By the way, here’s another example of a local television station doing an excellent job of exposing a local government that is trying to screw over an innocent and powerless person.

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One Man Can Make a Difference: Jay Beeber’s Successful Battle Against Revenue Cameras in Los Angeles

In a decision that is overwhelmingly the result of the hard work and dedication of one person, Los Angeles is ending its revenue-generating red-light camera scheme.

Here’s Jay Beeber’s interview with Reason TV.

If you’re interested, this post has more information about how red-light cameras make intersections more dangerous.

It’s probably an exaggeration to say that Jay Beeber is an American hero, but he definitely deserves accolades of some kind.

Let’s not forget, though, that the voters of Houston also deserve some applause.

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Just in Case You Need One More Reason Why the Department of Housing and Urban Development Should Be Abolished…

Welcome Instapundit readers. If you want to get even more upset, here’s a big list of posts about waste, fraud, and abuse, including one about Social Security bureaucrats enjoying a $700,000 junket and another about a lawyer getting $25,000 of “stimulus” money for writing a two-sentence memo.

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While I’ve been somewhat critical of Senator Coburn’s willingness to raise taxes, I’ve never doubted that he is a sincere and tireless fighter for smaller government.

Indeed, his staff periodically share examples of government waste that boggle the mind, though I don’t share many of them on the blog since I’m afraid people will become desensitized to the sleazy boondoggles that are so beloved by lawmakers.

However, the last email from Senator Coburn’s office included a story that shows, in a rather remarkable fashion, how a bloated federal government has a corrupting impact on the rest of society.

According to a Wisconsin newspaper, a local governments is trying to “sell” federal funds, sort of like how I used to scalp football tickets as a student.

River Hills, Milwaukee County’s richest suburb, has found little use for what has become an annual allocation of about $20,000 in federal community development block grant money. So village leaders instead have cut deals with other suburbs to lend or transfer the grant money and have even sought unsuccessfully to sell the River Hills block grant allocation to another community. …Assistant Corporation Counsel John Jorgensen said selling the HUD allocation wouldn’t break any rules or laws, as long as the grant money is used for allowable projects. In a memo to county supervisors, Jorgensen said his opinion matched advice he’d gotten from local HUD officials. But Sullivan said the Milwaukee field office had questioned the practice in the past. Officials from the Milwaukee office of the Department of Housing and Urban Development declined to comment.

The Department of Housing and Urban Development has always been near the top of my list of government entities that should be shut down. This latest scam is merely the cherry on the ice-cream sundae of the argument to eliminate HUD as soon as possible.

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The Transatlantic Government-Incompetence-and-Stupidity Contest: The U.S v. U.K.

Last week, we compared a bone-headed display of incompetence by the German government with a perverse form of harassment by a local government in the United States.

We have another America-v-Europe contest, but the roles are reversed. This time, the buffoons in Washington get dinged for a spectacular screw-up, and it is a local government in England that earns ridicule for a brainless decision.

Let’s start in America, where a Virginia newspaper has the gory details, including this excerpt.

They are the two ships no one wanted, almost constantly embroiled in one dispute or another for the past 25 years. The two Navy behemoths have never gone on a mission, were never even completed, yet they cost taxpayers at least $300 million. Now the vessels, the Benjamin Isherwood and the Henry Eckford, are destined to leave Virginia waters for good and be scrapped at a Texas salvage yard, with no money coming back to the U.S. Treasury.

Isn’t that wonderful. A $600 million disbursement of tax dollars, getting absolutely nothing in exchange. Though I suppose that’s better than some other federal expenditures that have negative rates-of-return.

Now let’s turn to the United Kingdom, where a local government put a keep-off-the-grass sign on a plot of grass so small that it would be a challenge for two people to stand in it. Here are the key passages from a Daily Mail story.

It’s a patch of scruffy grass barely big enough to sit down on – but that hasn’t stopped one town hall making a great deal of fuss about it. The verge measures only 3ft by 2ft but has its own ‘Keep Off The Grass’ sign. The warning has appeared as officials plan £70million of cuts. Resident Tom Beardmore, 29, said he was ‘flabbergasted’ when he saw it in Raynes Park, south-west London. …A council spokeswoman said the matter was being looked into but was unable to confirm how much the sign had cost or why it was placed there.

Maybe I’m just being jingoistic, but I think the Brits win this contest. Yes, the American government flushed a lot more money down the toilet, but there is something truly breathtaking about what happened in London.

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America v. Europe: The Government Incompetence and Stupidity Contest

These two stories are completely unrelated, but they both struck me as examples of why governments have a well-deserved reputation for squandering money and making life more difficult for ordinary people.

And even though the stories are radically different, they give us a good opportunity to ask whether government is more stupid and incompetent in Europe or the United States.

Our European entry in the contest is from Germany, where the government apparently has lost blueprints for its new spy headquarters. Here are some excerpts from a BBC report, though I can’t help thinking it should be in the Onion.

Germany is investigating reports that the blueprints for the future headquarters of its BND intelligence agency have gone missing. If the report in Focus magazine is confirmed, it could pose a serious security risk – and would be a huge embarrassment for the spy agency. The new 1.6bn euro (£1.4bn; $2.3bn) agency headquarters are currently under construction in Berlin. …They purportedly show extremely sensitive aspects of the building’s construction, such as the alarm system, anti-terror installations, emergency exits, cable routes and sewers.

By the way, I’m also shocked by the $2.3 billion price tag for the building. But cost overruns and waste are so routine that only fiscal policy wonks like me seem to get upset about such things.

The American entry is from (I’m embarrassed to admit) Georgia, where the Keystone Cops in Midway have stopped a major crime wave of…(get ready to be shocked)…unregulated lemonade! Here’s part of the AP report.

Police in Georgia have shut down a lemonade stand run by three girls trying to save up for a trip to a water park, saying they didn’t have a business license or the required permits. Midway Police Chief Kelly Morningstar says police also didn’t know how the lemonade was made, who made it or what was in it. The girls had been operating for one day when Morningstar and another officer cruised by. The girls needed a business license, peddler’s permit and food permit to operate, even on residential property. The permits cost $50 a day or $180 per year.

Other local governments have been guilty of this type of petty harassment, but what’s remarkable about the Midway story is that the Barney-Fife-wannabee police chief shut down the lemonade stand, in part, because the girls “didn’t know how the lemonade was made.”

So I guess this means that the kids not only should have coughed up big bucks for a permit, but they also should have posted the recipe for some regulator to approve?

I weep for my country.

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Words I Never Thought Would Cross My Lips: “Government Is even More Incompetent than I Thought”

Regular readers know that I don’t have high regard for government. I’m willing to believe just about anything bad about politicians and bureaucrats, and I am not the least bit surprised when I hear horror stories about counterproductive government programs riddled with waste, fraud, and abuse.

So you can imagine that it takes something truly mind-boggling to make me lower my opinion of government.

Well, that’s happened. Apparently, a woman drowned in a government-run pool and it took two days for the bureaucrats to notice her dead body. Here are some excerpts from a Boston news report.

The body of a Fall River woman was discovered floating in a state run pool late Tuesday night, two days after she apparently drowned in that same pool. Police say lifeguards were on duty and people were swimming in the Veterans Memorial pool at Lafayette Park Sunday, Monday and Tuesday and it appears no one noticed the dead body. …Police say Joseph was watching her 9-year-old neighbor at the pool on Sunday when she apparently had an accident sliding down a waterside. Family friends tell FOX25 the little boy told lifeguards that she did not come up from above water but no action was taken.

I actually hope this story is somehow false. Sure, I enjoy mocking the incompetence of government, but I would hate to think that lifeguards, other staff, and supervisors (not to mention other swimmers) could overlook a dead body for two days.

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Is Government Really this Stupid?…and a True Confession from My Sordid Past (Maybe)

I realize this questions answers itself, but I’m continuously amazed at the bone-headed decisions made by politicians and bureaucrats.

Indeed, I wish I had this example for my recent post comparing incompetent officials in the United States with their counterparts in the United Kingdom.

A kid in Indiana played a prank involving a blow-up doll in the women’s bathroom at his high school. Sounds like a couple of afternoons of detention, right? Think again. Here’s an excerpt from a local news report.

A Rushville High School senior faces a felony charge after bringing a blow-up doll to school as part of what he claims was a prank. School officials called police May 31 after a package was found in a girls’ bathroom. A deflated blow-up doll was later found inside the box. Tyell Morton, 18, was arrested on a preliminary charge of felony criminal mischief after he admitted to bringing the doll to school. …The family’s attorney, Robert Turner, said the charge is excessive. “It’s interesting that had he gone to school with a gun, there would’ve been a lesser charge. It would’ve been a Class D felony with up to three years,” he said.

I’m glad I went to school before this type of nonsense became commonplace, because I was once an immature punk (most people would say I’m now an immature grownup, but that’s a separate issue). Not that I’m admitting anything, because I have no idea what the statute of limitations is on these matters, but I may have once set off a string of 400 firecrackers in a school stairwell. And I may have once let a snake loose in the school library.

Back then, I might have gotten suspended for a couple of days if I had been caught. Today, I’d be at Gitmo. Okay, that might be an exaggeration, but you know what I mean.

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It’s a Bird…It’s a Plane…No, It’s Super-Bureaucrat

I’ve had dozens of posts about overpaid bureaucrats. Indeed, I’ve largely stopped blogging about the topic because it is so depressing to constantly be reminded about how a privileged class of people is manipulating the system to coercively obtain undeserved compensation from their less-fortunate neighbors.

But every so often I see a story which cries out for attention. Bloomberg has a report about a double-dipping bureaucrat who has managed to snag a position providing more than $200K per year while simultaneously ripping off taxpayers for a pension of more than $300K per year.

In a perverse way, I admire Mr. Hunderfund. I never would have thought a bureaucrat could figure out how to scam taxpayers for more than half a million dollars in one year. And for a job that probably shouldn’t even exist.

James Hunderfund, who earns at least $225,000 a year as a school superintendent on Long Island, is also entitled to a $316,245 annual pension from a previous administrative post, according to a compilation of pension data by the Empire Center for New York State Policy. Hunderfund retired in 2006 as superintendent of the Commack school district, also on Long Island. His current contract with Malverne stipulates that he receive an annual salary of no less than $225,000 through June 30, according to Empire’s report, which used a database from the New York State Teachers Retirement System.

The story also notes that there are more than 1,000 other edu-crats who are getting six-figure retirement packages.

The only other issue to address is whether we should be more upset by Mr. Hunderfund’s bloated salary of his obscene pension.

I think the pension is more outrageous, but I’m open to other opinions. Any thoughts?

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Robert Murphy of San Francisco Is a Despicable Thief

I’ve never met Robert Murphy, but he is a reprehensible person. I don’t know if he’s as bad as Michael Wolfensohn, but he’s definitely a sorry excuse for a human being.

For all I know, Mr. Murphy goes to church every day, volunteers at a homeless shelter, reads books for the blind, and picks up litter in the local park. But he’s still a crook being because he thinks it is perfectly okay to steal so long as the government is the middle man.

You can tell me whether I exaggerate after reading these details. Mr. Murphy has been living for 30 years without a lease in a rent-controlled apartment in San Francisco. Every day he remains in the unit, he is stealing value from the owner, Wayne Koniuk, who would prefer to exercise his property rights by letting one of his sons live in the building. Here are the pertinent details from a local news source.

By trade, Koniuk fashions artificial limbs for amputees. By habit, he fits prostheses at no charge for people who cannot pay. This has left him a less-than-wealthy man. But he does have one substantial asset: a Divisadero Street building that his father, Walter, an orthotist, bought in 1970 and gave to his only son in 2001 so Wayne could run his business on the ground floor and Wayne’s adult children would always have a place to live. …Koniuk desperately wants to move his younger son into the building’s other four-bedroom apartment, he cannot. He is exploring legal options. Robert Murphy, who has lived there for 30 years without a lease, remains, paying $525.82 a month. Last spring, Koniuk offered Murphy $45,000 to move out. Murphy’s lawyer demanded $70,000, a sum Koniuk says he does not have. Meanwhile, the city’s Rent Board notified Koniuk that he was allowed to increase Murphy’s monthly rent this year by $2.63.

Not surprisingly, the government intervention that allows Mr. Murphy to steal from Mr. Koniuk is having terrible effects on San Francisco’s housing market.

In San Francisco, one of the toughest places in the country to find a place to live, more than 31,000 housing units — one of every 12 — now sit vacant, according to recently released census data. That’s the highest vacancy rate in the region, and a 70 percent increase from a decade ago. …Increasingly, small-time landlords like Koniuk are just giving up. One of his Divisadero Street neighbors has left two large apartments on the second and third floors of her building vacant for more than a decade, after a series of tenant difficulties. It’s just not worth the bother, or the risk, of being legally tied to a tenant for decades. …Perversely, that is hurting the city’s renters as well, as a large percentage of the city’s housing stock is allowed to just sit vacant, driving up rents that newcomers pay for market-rate housing.

I’ve mocked San Francisco in the past and I certainly enjoy a heaping dose of Schadenfreude when I see the failure of statist policies. But I also hate when big government and greedy interest groups screw over ordinary people. If I was Mr. Koniuk, I would visit this website to get some ideas on how to make life more…interesting…for the thieving Mr. Murphy.

(h/t: Greg Mankiw)

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From East Coast to West Coast, Bureaucrats Are Ripping Off Taxpayers

Let’s start in Washington, where USA Today reports that there are “at least 17,828 federal employees whose annualized salaries totaled $180,000 or more in September 2010.” That’s rather distressing news for taxpayers, but these excerpts from the story provide additional reason for us to be upset.

…their ranks soared from the 805 with annualized salaries of $180,000 or more in 2005. Nearly 90% held “excepted service” jobs, meaning they worked at agencies that set their own qualification requirements and aren’t subject to the appointment, pay and classification regulations that apply to other civil service posts. …Light said he was surprised the federal data showed that 598 SEC lawyers ranked second among the largest employee groups with the top annualized salaries. The financial industry regulator, widely criticized for its failure to detect and stop Ponzi scheme architect Bernard Madoff, “hasn’t been doing its job very well, and yet its lawyers come out on top. That’s a shock, don’t you think?” said Light. Given the national concern with fighting crime, he questioned why federal prosecutors didn’t top SEC lawyers in numbers of highest-salaried attorneys.

Keep in mind, by the way, that the article is examining salaries rather than total compensation. And since bureaucrats generally get benefits that are four times higher than their counterparts in the productive sector of the economy, the gap between the bureaucratic elite and the serfs who pay their salaries is even larger than these figures suggest.

But at least the overpaid federal bureaucrats are mostly doctors and lawyers, so there’s at least some argument for high levels of compensation. If you want to read something truly outrageous, let’s travel to Newport Beach, California, where the city’s lifeguards are bleeding taxpayers in an obscene fashion.

…the city’s full-time lifeguard force has finally come under scrutiny. Next week the city council will decide if cuts are needed to the full-time lifeguard force where last year the top earner received $211,000 in pay and benefits, including a $400 sun protection allowance. In 2010 all but one of the city’s full-time lifeguard staff had annual compensation packages worth over $120,000. Not bad pay for a lifeguard – but what makes these jobs most attractive is the generous retirements. These lifeguards can retire at age 50 with full medical benefits for life. One recently retired lifeguard, age 51, receives a government retirement of over $108,000 per year—for the rest of his life.

The examples in this post are especially egregious, but the key thing to keep in mind that compensation levels for bureaucrats (at all levels of government) are far too high. I’ve posted this video before, but I’ll embed it again for folks who want to see some of the key statistics to prove that the government workforce is too large and paid too much.

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Poetic (and Smelly) Justice for San Francisco

Since I believe in federalism and decentralization, I tend to be somewhat tolerant of stupid decisions by local governments – particularly when those choices are made thousands of miles away and I don’t have to deal with the consequences.

With this in mind, I find it rather amusing that San Francisco is now plagued by sewer smells as a result of mandates for low-flow toilets. The article doesn’t explain what rules the city imposed, but I assume they are even worse than the federal rules (if you want a good laugh about the federal law, this Dave Barry column is worth reading).

Reading the excerpt below, part of me hopes for a dry summer and that the city’s politicians all live near AT&T Park.

San Francisco’s big push for low-flow toilets has turned into a multimillion-dollar plumbing stink. Skimping on toilet water has resulted in more sludge backing up inside the sewer pipes, said Tyrone Jue, spokesman for the city Public Utilities Commission. That has created a rotten-egg stench near AT&T Park and elsewhere, especially during the dry summer months. The city has already spent $100 million over the past five years to upgrade its sewer system and sewage plants, in part to combat the odor problem. Now officials are stocking up on a $14 million, three-year supply of highly concentrated sodium hypochlorite – better known as bleach – to act as an odor eater and to disinfect the city’s treated water before it’s dumped into the bay. It will also be used to sanitize drinking water.

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One Chart that Tells You Everything You Need to Know about Whether State and Local Bureaucrats Are Over-Compensated

The showdown in Wisconsin has generated competing claims about whether state and local government bureaucrats are paid too much or paid too little compared to their private sector counterparts.

The data on total compensation clearly show a big advantage for state and local bureaucrats, largely because of lavish benefits (which is the problem that  Governor Walker in Wisconsin is trying to fix). But the government unions argue that any advantage they receive disappears after the data is adjusted for factors such as education.

This is a fair point, so we need to find some objective measure that neutralizes all the possible differences. Fortunately, the Bureau of Labor Statistics has a Job Openings and Labor Turnover Survey, and this “JOLTS” data includes a measure of how often workers voluntarily leave job, and we can examine this data for different parts of the workforce.

Every labor economist, right or left, will agree that higher “quit rates” are much more likely in sectors that are underpaid and lower levels are much more likely in sectors where compensation is generous.

Not surprisingly, this data shows state and local bureaucrats are living on Easy Street. As the chart illustrates, private sector workers are more than three times as likely to quit their jobs.

This helps explain why the unions are treating the Wisconsin debate as if it was Custer’s Last Stand. The bureaucrats know they have comfortable sinecures and they are fighting to preserve their unfair privileges.

The only bit of semi-good news for Wisconsin taxpayers is that state and local bureaucrats are not as lavishly over-compensated as federal bureaucrats.

This Center for Freedom and Prosperity video looks at all of the data and reveals a pecking order. Federal bureaucrats are at the kings and queens of compensation. State and local bureaucrats are like the nobility. And private sector taxpayers are the serfs that worker harder and earn less, but nonetheless finance the entire racket.

The video closes with a very important point that the right pay level for many bureaucrats is zero. This is because they work for programs, departments, and agencies that should not exist.

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Requiring a Permit to Be a Bum?!? Great Moments in Government Stupidity

Since I’ve spent the past 25 years analyzing government, I’m used to spectacular levels of waste and incompetence. Examples of pork such as “$27 light bulbs” and the “turtle tunnel” barely cause me to raise an eyebrow.

It takes something really amazing to grab my attention, so I’m almost grateful to Ike Leggett, the head bureaucrat of Maryland’s Montgomery County. He has restored my faith in the extreme foolishness of the political class with a proposal that would require bums to get a panhandling license from the government.

Montgomery County Executive Ike Leggett is pushing for a state law that would allow the suburb to ban all roadside solicitation without a permit.

Just think of the new bureaucracy that could be created! Imagine all the new patronage jobs, the new forms that would be required, and the new leases to be signed!

Best of all, think of how much fun it will be to fleece taxpayers to pay for this nonsense. Other bureaucrats and politicians will be jealous of Ike for this new racket.

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Assuming We Can Stop Obama from Giving another Federal Bailout, the Gravy Train May Have Ended for State and Local Bureaucrats

This blog repeatedly has chronicled the huge discrepancy between the gold-plated compensation for government employees and the meager salaries and benefits of people in the productive sector of the economy, including a video conclusively demonstrating that bureaucrats are overpaid.

This message is now resonating all across the nation. Even the New York Times, as shown by the excerpt below, now realizes that taxpayers are sick and tired of paying exorbitant taxes to finance excessive pay for the bureaucracy.

But public awareness is only a small step in the right direction. What really matters is public policy. Will the bureaucracy be downsized? Will salaries be frozen for several years? Will absurd pension plans be replaced by 401(k) systems? And what will happen to unaffordable health plans for government workers?

We’re going to see some interesting battles at the state and local level. One of the many great things about federalism is we get an opportunity to see some governments do the right thing and some do the wrong thing. And as we watch states like California descend into bankruptcy, this teaches everyone about the policies that should be avoided.

But the long-overdue day of reckoning won’t happen if Obama and the other politicians figure out how to bail out reckless state and local governments. That’s already happened once, since funneling federal money to the states was one of main goals of Obama’s failed stimulus.

But sending more money to the states would be akin to providing an alcoholic with a case of booze. If House Republicans have any brains, they will make sure taxpayers in places like Texas don’t pay more to subsidize politicians and special interests in places such as Illinois.

Cross your fingers that they hold firm. In the meantime, let’s enjoy the change in the public mood. Here are a few passages from yesterday’s story in the New York Times.

Across the nation, a rising irritation with public employee unions is palpable, as a wounded economy has blown gaping holes in state, city and town budgets, and revealed that some public pension funds dangle perilously close to bankruptcy. In California, New York, Michigan and New Jersey, states where public unions wield much power and the culture historically tends to be pro-labor, even longtime liberal political leaders have demanded concessions — wage freezes, benefit cuts and tougher work rules. …a growing cadre of political leaders and municipal finance experts argue that much of the edifice of municipal and state finance is jury-rigged and, without new revenue, perhaps unsustainable. Too many political leaders, they argue, acted too irresponsibly, failing to either raise taxes or cut spending. A brutal reckoning awaits, they say. …Fred Siegel, a historian at the conservative-leaning Manhattan Institute, has written of the “New Tammany Hall,” which he describes as the incestuous alliance between public officials and labor. “Public unions have had no natural adversary; they give politicians political support and get good contracts back,” Mr. Siegel said. “It’s uniquely dysfunctional.” …In California, pension costs now crowd out spending for parks, public schools and state universities; in Illinois, spiraling pension costs threaten the state with insolvency. And taxpayer resentment simmers.

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Local Government Stupidity Contest

This post could be entitled, “So many dumb bureaucrats, so little time,” but let’s have some fun and turn it into a contest. Which bone-headed decision by a local government best exemplifies mindless bureaucracy, politically correct nonsense, and government waste?

Contestant Number One is Sgt Brian Albert of the Baltimore County Natural Resources Police, who fined two men $90 each for the vicious, horrible, nasty crime of …(please don’t faint)… rescuing a deer. Yes, your eyes do not deceive you. Two hardened criminals used an inflatable raft to free a helpless animal, but they flouted the law by not wearing life jackets. Since I already did a blog post about a man being fined for rescuing a wounded deer, I guess the moral of the story is that bureaucrats don’t like Bambi.

Contestant Number Two is the Metro Police in Washington, DC, which has decided to harass random travelers by searching their bags before they board the subway. This is akin to the TSA’s mindless bureaucracy – but even worse. There surely are nut-jobs who would like to blow up Americans, but they could do that on a bus, on a crowded street during rush hour, or any other place where a large number of people are gathered. Heck, they can drive a car into a crowd. Good intelligence by the CIA and FBI is the way to stop these crackpots, not empty security theater that makes life more difficult for law-abiding people.

Contestant Number Three is the St. Paul School District in Minnesota, which has turned all schools into “sweet-free zones.” This ban also applies to salty foods, however that is defined, and deals “a blow to booster clubs and parent organizations, too, which won’t be able to sell hot chocolate, doughnuts, candy bars and cookies at school events.” I actually agree with Michelle Obama that American kids are overweight, but I also know that government intervention isn’t going to solve the problem unless we want a police state that bans video games, TVs, computers, and the other technological developments that are responsible for sedentary kids.

Contestant Number Four is Battlefield High School, in Haymarket, VA, which disciplined 10 unrepentant gang members. What did these thugs do to warrant detention? Brace yourself and make sure no children are looking over your shoulders, because these hoodlums belong to a particularly nasty group called the Christmas Sweater Club and they got in trouble for handing out miniature candy canes. One school administrator (Mrs. Grinch?)  explained that “not everyone wants Christmas cheer,” thus turning Jay Leno’s parody into reality.

So who wins the prize? I’m not technologically advanced enough to include a poll with this question, so the only thing we can really conclude is that governments do dumb things. That’s true at the national level, the state level, and the local level.

I just wish I could write like Dave Barry. He had a hilarious column many years ago that was based on various examples of government stupidity. This post is more likely to make you cry rather than laugh, which is not good at this time of year. Nonetheless, feel free to comment if you think one of these stories stands out.

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Talking about Earmarks and the “Carousel of Corruption” on Taxpayer-Subsidized Radio

Since I’m involuntarily forced to finance National Public Radio, I guess I should be happy that free-market views occasionally are allowed on air. Click here to listen to a segment where I talk about earmarks, “phonemarks,” and special interest corruption in Washington.

The risky part of a pre-recorded interview is that you never know what the journalist will use. If the person interviewing you is biased, they can use a quote out of context to make you appear stupid, or use an incomplete quote to distort the meaning of your words. That did not happen in this case. The NPR interviewer, at least to my ear, was quite fair.

I wish the segment had been longer, however, so I could have explained why even “honest” earmarks are wrong. Let’s say that Congressman Smith or Senator Jones inserts an earmark, or makes a phonemark, to get funding for a sewer system. It’s quite possible that such a request is completely untainted by corruption (other than the run-of-the-mill practice of trying to buy votes with other people’s money).

But that doesn’t make it right. One of the reasons why federalism is such a good idea is that money is much more likely to be spent wisely is if it is raised at the state and local level and people at those levels decide how it should be allocated.

This doesn’t mean there is no corruption, insider deal-making, or special-interest shenanigans. That’s an inevitable part of government. But federalism at least makes it easier for people to monitor how their money is being spent – and to escape if they think their state or local government is going overboard with bad behavior.

In other words, centralization of government is a bad idea. This is why big government in Washington is worse than big government at the state and local level. And it’s why big government from the European Union in Brussels is worse than big government in Rome, Berlin, or Stockholm.

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Killing Obama’s “Build America Bonds” Is a Big Reason to Like the Tax Deal

There are plenty of reason to like and dislike the tax deal between President Obama and congressional leaders. On the plus side, we dodge a big tax increase for the next two years. We also replace a goofy and ineffective “make work pay” tax credit with a supply-side oriented reduction in the payroll tax rate (albeit only for one year, so there probably won’t be much economic benefit).

On the negative side, the deal extends unemployment benefits, which has the perverse effect of subsidizing unemployment. The deal is also filled with all sorts of corrupt provisions for various interest groups such as ethanol producers.

Then there are provisions such as the 35 percent death tax. Is this bad news, because it is an increase from zero percent this year? Or is it good news because it is much lower than the 55 percent rate that was scheduled to take effect beginning next year? That’s hard to answer, though I know the right rate is zero.

But here’s one bit of good news that has not received much attention. The tax deal ends the “Build America Bonds” tax preference, which was one of the most destructive provisions of Obama’s so-called stimulus. Here’s an excerpt from a Bloomberg report.

Senate Democrats backing the subsidy, which has helped finance bridges, roads and other public works, fell short in a bid to get the program added to a bill extending the 2001 and 2003 income-tax cuts. That failure was the latest in efforts to keep the Build America program alive beyond its scheduled end on Dec. 31. …While Obama and Democrats have supported prolonging the program, they have run into opposition from Republicans critical of the stimulus package. Extensions have twice passed the Democratic-controlled House only to stall in the Senate, where the Republican minority has sufficient power to block legislation. The U.S. government pays 35 of the interest costs on Build America bonds. …State and local governments, the U.S. Chamber of Commerce and representatives of the construction industry are among the program’s advocates.

Build America Bonds are a back-door handout for profligate state and local governments, allowing them to borrow more money while shifting some of the resulting interest costs to the federal government.

But states already are in deep trouble because of too much spending and debt, so encouraging more spending and debt with federal tax distortions was a very bizarre policy.

Moreover, the policy also damaged the economy by creating an incentive for investors to allocate funds to state and local governments rather than private sector investments.That’s a very bad idea, unless you somehow think (notwithstanding all the evidence) that it is smart to make the public sector bigger at the expense of the private sector.

In one fell swoop, Build America Bonds increased the burden of the federal government, encouraged a bigger burden of state and local government, and drained resources from the productive sector of the economy.

That’s stupid, even by Washington standards. So whatever we think of the overall package, let’s savor the death of this destructive provision.

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World’s Worst Person

I’ve never watched Keith Olbermann’s show (not being snarky, I rarely watch TV and don’t even have cable), so I’m not quite sure how his “worst person in the world” feature operates. But I want to nominate someone who hopefully is despicable to people on both the right and left.

A local politician in New Castle, New York, ratted out a couple of kids who were having a bake sale in a local park. Their sin (prepare to gasp in horror) was failing to get appropriate licenses and approval from government. There’s a blurb from a news report reprinted below. My only thought is that Councilman Wolfensohn is probably a kindred spirit to the petty thugs who man the ranks of Cuba’s secret police. If he doesn’t get defeated in the next election, I will lose all faith in the American people (or at least the people of New Castle, NY).

When Andrew DeMarchis and Kevin Graff, two 13-year-olds from Chappaqua’s Seven Bridges Middle School, set up shop at Gedney Park on a fall weekend last month, they were expecting a tidy profit. Instead, the two wannabe entrepreneurs selling cupcakes, cookies, brownies and Rice Krispie treats baked by them for $1 apiece got a taste of cold, hard bureaucracy. New Castle Councilman Michael Wolfensohn came upon the sale and called the cops on the kids for operating without a license. …”I am shocked and sad for the boys. It was such a great idea, and they worked hard at it,” said Laura Graff, Kevin’s mother. “But then some Town Board member decided to get on his high horse and wreck their dreams.” …”All vendors selling on town property have to have a license, whether it’s boys selling baked goods or a hot dog vendor,” said Wolfensohn, who was elected to the board in 2007… a New Castle parks use permit requires a $1 million certificate of insurance and a fee ranging from $150 to $350 per two hours.

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The Most Emotionally Satisfying Election of 2010

In the grand scheme, I realize red-light cameras are not very important, but I was absolutely delighted to see that Houston voters approved a referendum to stop the city from using these devices. Red-light cameras should be called revenue cameras because local governments almost always use them to collect more money rather than to promote safety. Indeed, there’s good evidence that they cause accidents, in part because governments shorten yellow lights in hopes of raping more motorists.

 The same is true of cameras to catch speeding. In my life, I’ve been nailed a couple of times by those devices, and in every case it involved an absurdly (and deliberately) low speed limit (including 45 on an interstate highway and 25 on a four-lane road in a non-residential area).

The fringe benefit of this Houston referendum, by the way, is that the city will be forced to spend less. The City Controller acts as if this is a terrible result, but one quick solution for the city’s budget problems would be to limit average pay for all government officials to the average of private sector pay in the region. Here are some excerpts from a story in the Houston Chronicle. Read and enjoy.

Houstonians rejected the city’s red light camera program in a hard-fought ballot contest, delivering an immediate $10 million hit to an already dire budget situation at City Hall. With all votes counted, 53.2 percent of voters demanded a decisive end to the use of the devices, which had been used to issue more than 800,000 tickets and collected $44 million in fines since 2006. …City Controller Ronald Green said the loss of the devices would amount to a $10 million shortfall in revenues, a sharp decrease that would greatly complicate efforts to close a shortfall that was already nearing $80 million. “We’re going to have to cut expenses,” he said. “We need to really start talking about the fact that furloughs and layoffs may really be a potential option. … It’s now time for drastic cuts.” Jim McGrath, a spokesman for Keep Houston Safe, said he did not anticipate that the political action committee — backed by the Arizona-based company that runs the city’s red-light camera program – would try to fight the election results in court.

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Taxpayers vs Bureaucrats, Part XLI

I’ve avoided this topic in recent weeks because it’s too depressing, but this story is too outrageous to ignore. The County of Los Angeles has 199 bureaucrats who “earned” more than $250,000 last year. According to Census Bureau data for 2008, the median household income in the county was 55,000, Here’s a blurb from the L.A.Times about incomes of the bureaucratic gilded class.

Nearly 200 Los Angeles County employees earned more than a quarter of a million dollars in 2009, according to a list of the county’s top earners released late Monday in response to a Public Records Act request from The Times. The highest earners list was dominated by physicians and other medical personnel, but also included county firefighters and a handful of top sheriff’s employees. Some of the best-known names on the list belong to elected officials — although none of the five county supervisors, who make $178,789 a year, qualified. …The Times requested the base salary, overtime and “other earnings” for county employees whose total annual pay exceeded $250,000. “Other earnings” can include bonuses for special skills or responsibilities or unused benefits cashed out as taxable income, among other things. …Overtime played a big role, with only 65 people making the list on base salary alone. Thirty workers made more than $80,000 in overtime. Twenty-two of them work for the county Fire Department, four work for public hospitals, two were psychiatrists for the Mental Health Department, and two were physician specialists for the Sheriff’s Department.

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