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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False Alarm: The Libertarian Revolution Has Not Begun

I just saw a headline that made me think that libertarian fantasies somehow had turned into reality.

As you can see, 24 IRS employees were just arrested for stealing. But what about the other 105,976 bureaucrats at the Internal Revenue Service who seize our money under the implied threat of violence?

Shouldn’t they be arrested for stealing from us as well?

But then my bubble burst. The story has nothing to do with the injustice of the internal revenue code and the shakedown of American taxpayers.

It turns out that these IRS bureaucrats were busted for getting unauthorized government handouts.

…authorities say Internal Revenue Service employees in Tennessee were stealing unemployment and other benefits while fully employed. On Thursday, 13 of those employees were indicted on federal charges that they lied to get unemployment, food stamps, welfare and housing vouchers. An additional 11 have been indicted on state charges of theft greater than $1,000.

In other words, these “public servants” were guilty of a form of triple dipping.

1. They took money from taxpayers as part of their excessive compensation packages.
2. Their day job was to then enforce a coercive and reprehensible tax system that took money from taxpayers
3. And they then bilked taxpayers yet again by mooching from various handout programs.

I’m actually surprised that they got arrested. Based on Keynesian economics, they should get medals for “stimulating” the economy.

P.S. All humor aside, non-anarchist libertarians face an interesting mental challenge. Many of them view the tax system as a form of theft. And there’s no question that it is enforced – ultimately – at the point of a gun. But with the exception of anarcho-capitalists, libertarians support the kind of limited government envisioned by the Founding Fathers. So how do you justify the taxes needed to finance that limited public sector? Most people would justify tax systems if they’re the result of a democratic process, but libertarians believe in rights rather than untrammeled majoritarianism. So how can they rationalize taxation? I freely confess that I don’t have the right answer. As I’ve noted before, I’m a practical libertarian, not the theoretical type. My job is to somehow figure out how we can shrink the federal government back to 3 percent of economic output. After that, the theoretical libertarians can figure out the thorny issues.

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California’s Golden Bureaucrat Snags $400K of Yearly Compensation – for the Rest of Her Life!

A regular feature of this blog used to be a “taxpayers vs bureaucrats” series, which featured outrageous examples of government employees getting wildly overcompensated.

I even narrated a video on the topic of excessive pay and benefits for bureaucrats.

But I stopped the series because it was too depressing. How often can read stories like this, after all, and not feel glum about America’s future?

• 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 school superintendent in New York raking in more than $500 thousand of annual compensation.
• A California government official raking in $822,000 of taxpayer-financed loot in just one.
• 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.

But I must lack willpower because I can’t resist writing about the latest scandal involving bureaucratic bloat.

Check out some of the ridiculous details about the woman who has earned the title of California’s Golden Bureaucrat.

Alameda County supervisors have really taken to heart the adage that government should run like a business — rewarding County Administrator Susan Muranishi with the Wall Street-like wage of $423,664 a year. For the rest of her life. …Muranishi’s annual pension will be equal to the dollar total of her entire yearly package — $413,000. She also has a separate executive private pension plan, for which the county chips in $46,500 a year.

Yes, you read correctly. She’ll be ripping off taxpayers “for the rest of her life.”

But if you want to get even more upset, check out how she’s bilking the people.

…in addition to her $301,000 base salary, Muranishi receives:

• $24,000, plus change, in “equity pay’’ to guarantee that she makes at least 10 percent more than anyone else in the county.
• About $54,000 a year in “longevity” pay for having stayed with the county for more than 30 years.
• An annual performance bonus of $24,000.
• And another $9,000 a year for serving on the county’s three-member Surplus Property Authority, an ad hoc committee of the Board of Supervisors that oversees the sale of excess land.

Like other county executives, Muranishi also gets an $8,292-a-year car allowance.

I’m relieved she’s getting a car allowance. The poor thing otherwise would have to rely on public transit. And isn’t it nice that she automatically gets a “performance bonus”? Sort of defeats the purpose, though, if it’s automatic. But what do I know, I’m just a taxpayer.

Even though I obviously lack the special insight needed to justify bloated compensation packages for California bureaucrats, I have enough common sense to know that the over-burdened taxpayers of California are being stretched beyond the breaking point – especially now that the looters and moochers have imposed a new 13.3 percent top tax rate on the state’s dwindling supply of high earners.

It’s no surprise that lots of high-paying jobs are relocating to states like Texas with better tax policy. Nor is it a surprise when pro golfers like Phil Mickelson warn they may leave the state. But when even a certified leftist like Bill Maher says he’s thinking about escaping, you know the situation is serious.

So for the umpteenth time, I will predict that the combination of bloated government and punitive taxation will lead to fiscal crisis in California.

Too much government spending and the Laffer Curve are not a good combination.

When you lure too many people into riding in the wagon and penalize those pulling the wagon, bad things happen. Doesn’t matter whether you’re looking at France or California.

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Mirror, Mirror, on the Wall, which State Has the Most Bureaucrats Compared to Teachers of Them All

I like rankings and maps because you get to see a lot of information in a single image.

I’ve shared some maps making very interesting international comparisons.

• Which nations have the most red ink.
• Which nations are money laundering centers (hint, not tax havens).
• A crazy left-wing “Happy Planet” map.
• Another silly map supposedly showing that America is one of the world’s most authoritarian nations.

Here are some good state maps with useful information.

• Which states have no income taxes.
• Which states give the highest welfare payments.
• Which states are in a “death spiral” because of too many takers and too few makers.

And I even have a local map.

• How many of the nation’s richest counties are in the D.C. metro region.

Now we have a map, based on some research from the Friedman Foundation and the American Enterprise Institute, showing which states have the most education bureaucrats compared to actual educators.

I’m ashamed that my state of Virginia is the worst in the nation. Maybe paying for this bureaucratic bloat explains why our Governor recently broke his promise and imposed a huge tax increase.

I’m also shocked that Illinois is one of the best states in the nation, at least by this measure. Though I suspect this is the exception to the rule and the Prairie State will still be neck and neck with California in the race to bankruptcy.

Though Illinois is much closer to the bottom than to the top in the “Moocher Index,” so maybe it’s not as bad as we think.

P.S. If you like this “educrat” ranking, here’s a “Poverty Pimp” ranking of “public welfare” bureaucrats compared to state population. Ohio and Alaska do poorly in both, for what it’s worth.

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Let’s Shed a Tear for those Under-Appreciated Bureaucrats Who Get Lavish Pensions and Live in $700K Homes

When I first read this story in the Washington Post about supposedly under-appreciated federal bureaucrats, I was tempted to focus on the sentence referring to “the sledgehammer of budget cuts scheduled to hit today.”

Is the Washington Post so biased and/or clueless that reporters really think that a 1.2 percent reduction in overall spending for the current fiscal year (which means the federal budget would still be larger than it was last year) represents a “sledgehammer of budget cuts”?

But I just mocked the New York Times last week for its reporting about supposed “deep spending cuts” and I also nailed the Washington Post back in 2011 for using the term “slash” for a budget plan that would have shaved a miniscule $6 billion from a budget of $3,800 billion.

So instead I want to focus on the part of the story featuring self-pitying remarks of federal bureaucrats. Here’s a good sampling.

…federal workers in Mantua say…having “United States Treasury” atop their paycheck [now] means having to defend yourself against arguments, from strangers and even from your own relatives, that you’re an overpaid and underworked leech. …many federal workers are…bothered by the growing sense that the careers they chose may now seem unattractive, even unworthy. …on a recent visit to Missouri, he got fed up with ritual denunciations of federal workers… Won, a federal worker for 31 years, resents the notion, now commonplace on talk radio and Web sites devoted to bashing the government, that federal workers carry a lighter load than their for-profit counterparts. …older government workers…are concerned about their pensions but even more anxious about why politicians are so willing to make federal employees the target of popular rage.

Excuse me while I wipe away the tears and compose myself. There are so many stories of unbearable hardship.

• It’s absolutely heartbreaking to read about those unfortunate, oppressed, and under-appreciated bureaucrats who live in “a leafy section of Fairfax County where houses sell in the $700,000 range.”
• And you can understand my tears of sympathy for folks who, as one bureaucrat admitted, had jobs where the “pay was guaranteed and you couldn’t get laid off.”
• Moreover, we all share the pain of bureaucrats who must deal with uncomfortable comparisons, such as the fact that “pensions, once considered routine, have become a wild luxury in the private sector, so when many Americans hear that public employees still get retirement pay, they can get frustrated.”

Perhaps we can create a civilian version of the Medal of Honor, given to the bureaucrat who suffers the most because of the “sledgehammer” cuts and those mean people on “web sites.”

Indeed, I think we have our first recipient. But brace yourself before you read this passage. The anguish and suffering may haunt you for the rest of your life. This bureaucrat is enduring unimaginable hardship.

..has already cut back in anticipation of the forthcoming budget slashing: He told a carpenter who was going to build bookshelves in the living room that the $5,000 job will have to be put off, and he told his doggie day care provider that he’ll have to go without that service when the furloughs kick in.

Oh my God! Not only are we failing to appreciate government bureaucrats, but the “budget slashing” will lead to neglected pets as well. What sort of cruel and heartless society have we become?!?

And imagine the Keynesian death spiral that will occur when the carpenter and dog walker then have to cut back on their purchases? Maybe we need to take Bastiat’s advice and go break some windows!

To make matters worse, there are mean-spirited people such as Chris Edwards at places such as the Cato Institute that have the nerve to point out that federal bureaucrats get about twice the overall level of compensation as those in the productive sector of the economy.

How can that man sleep at night after making such an invidious comparison?

But there’s another cad at the Cato Institute who actually had the nerve to narrate this video, which unfairly uses facts and data to show that the federal workforce is over-compensated.

Worst of all, he actually suggests at the end of the video is that the real problem is that the federal government is far too large. What sort of place would employ such unreasonable folks?

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Just Because California Is Terrible, that Doesn’t Mean Texas Is Perfect

Texas is in much better shape than California. Taxes are lower, in part because Texas has no state income tax.

No wonder the Lone Star State is growing faster and creating more jobs.

And the gap will soon get even wider since California voters recently decided to drive away more productive people by raising top tax rates.

But a key challenge for all governments is controlling the size and cost of bureaucracies.

Government employees are probably overpaid in both states, but the situation is worse in California, as I discuss in this interview with John Stossel.

But being better than California is not exactly a ringing endorsement of Texas fiscal policy.

A column in today’s Wall Street Journal, written by the state’s Comptroller of Public Accounts, points out some worrisome signs.

As the chief financial officer of the nation’s second-largest state, even I have found it hard to get a handle on how much governments are spending, and how much debt they’re taking on. Every level of government is piling up incredible bills. And they’re coming due, whether we like it or not. Even in low-tax Texas, property taxes have risen three times faster than the inflation rate and four times faster than our population growth since 1992. Our local governments, meanwhile, more than doubled their debt load in the last decade, to more than $7,500 in debt for every man, woman and child in the state. In Houston alone, city-employee pension plans are facing an unfunded liability of $2.4 billion. But too many taxpayers aren’t given the information they need to make informed decisions when they vote debt issues. Recently I spent several months holding about 40 town-hall meetings with Texans across our state. Each time, I asked the attendees if they could tell me how much debt their local governments are carrying. Not a single person in a single town had this information.

In other words, taxpayers need to be eternally vigilant, regardless of where they live. Otherwise the corrupt rectangle of politicians, bureaucrats, lobbyists, and interest groups will figure out hidden ways of using the political process to obtain unearned wealth.

P.S. The second-most-viewed post on this blog is this joke about Texas, California, and a coyote, so it must be at least somewhat amusing. If you want some Texas-specific humor, this police exam is amusing and you’ll enjoy this joke about the difference between Texans, liberals and conservatives. And if you want California-specific humor, this Chuck Asay cartoon hits the nail on the head.

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While Much of America Suffers with Stagnation, Washington’s Political Class Is Having a Very Merry Christmas

In large part because of an excessive burden of government, the American economy is suffering European-style stagnation, with even the Washington Post now confessing that growth far below the long-run trend.

This helps explain why job creation has been so dismal in recent years, with more than twenty million Americans out of work, underemployed, or dropped out of the workforce.

But there is one pocket of enormous prosperity in America. It will warm your heart to know that our overlords in Washington are living the life of Riley.

Here are some of the highlights of a remarkable Reuters expose about the fat cats of big government, starting with the huge gap between the insider elite and the poor.

In the town that launched the War on Poverty 48 years ago, the poor are getting poorer despite the government’s help. And the rich are getting richer because of it. The top 5 percent of households in Washington, D.C., made more than $500,000 on average last year, while the bottom 20 percent earned less than $9,500 – a ratio of 54 to 1. That gap is up from 39 to 1 two decades ago. It’s wider than in any of the 50 states and all but two major cities.

One small but important correction in the previous excerpt. As I have noted many times, the “poor are getting poorer” because of “the government’s help.”

The article then explains that a lot of the redistribution in Washington is from taxpayers to a pampered elite.

…in the years since President Lyndon Johnson took aim at poverty in his first State of the Union address, there has been an increasingly strong crosscurrent: The government is redistributing wealth up, too – especially in the nation’s capital. …Two decades of record federal spending and expanding regulation have fostered a growing upper class of federal contractors, lobbyists and lawyers in the District of Columbia area. …Direct spending by the federal government accounts for 40 percent of the area’s $425 billion-a-year economy. …Roughly 15 cents of every dollar from the entire federal procurement budget stays in or around the government’s hometown, said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University. Last year, that was about $80 billion out of $536 billion in procurement spending, he said. The 15 percent share is far greater than the region’s 2 percent portion of the U.S. population. “We’re seeing an enormous transfer of wealth from taxpayers to the Washington economy,” said Fuller.

And all this spending leads to an elitist class of cronyists, politicians, contractors, bureaucrats, and lobbyists. No wonder the DC area is home to some of the richest counties in America.

But unlike other well-to-do areas, the wealth in DC is rarely accumulated by honest means.

Instead, it’s the result of perverse form of redistribution to big-government insiders. Check out these horrifying details.

Washington-area workers with incomes above $100,000 rose to 22 percent of the workforce, up from 14 percent in 1990, adjusted for inflation, a Reuters analysis of Census data found. …there are 320,000 federal jobs in the Washington area. Within the District of Columbia, 55 percent pay $100,000 or more. …Nearly 13,000 lobbyists registered with the government last year and reported $3.3 billion in fees, or about $260,000 per lobbyist. That’s 22 percent more lobbyists and 37 percent more inflation-adjusted revenue per lobbyist than in 1998… Times are flush for Washington lawyers as well. The number of attorneys in the area has risen 44 percent, twice the national rate, to 41,000 since 1999. Their average income, adjusted for inflation, rose 35 percent to $156,000.

I guess we know who’s having a merry Christmas.

All these rich bureaucrats, lobbyists, politicians, cronyists, and contractors certainly are living the good life, as revealed in a Washington Post story on the “Region’s Rising Wealth.” Here are some sordid excerpts.

…the D.C. region already has a reputation as one of the most affluent in the country. But the area is fast emerging as a home to the truly rich as well. High-end luxury retailers are responding. Brands such as Aston Martin are expanding their operations into the area — betting, for instance, that there will be plenty of customers who can afford the $280,000 sports car James Bond drives in the movies. …Already there are 500 Aston Martin owners in the area with the potential for more.

I’ve already shared an interview with Andrew Ferguson by Reason TV that should make all taxpayers upset. Why should ordinary taxpayers be coerced to subsidize Washington’s high-flying parasite economy?

Redistribution is a bad thing in most circumstances. But when you redistribute from poor to rich, that’s utterly perverse.

Well, thanks to profligacy by Bush and Obama, that’s exactly what’s happened.

The region’s top one percent of households make more than a half million dollars yearly — far more than the national average for the one percent, according to a study of Census data by Sentier Research, an Annapolis-based data analysis firm. And these top earners — many of whom are from dual-income households and benefit from federal contracting — weathered the recession better than their counterparts in some other metropolitan areas and the nation. More are moving beyond comfortable affluence to a much higher standard of living. “What is unique to D.C. is that there has been a change in the complexion of wealth here. There didn’t used to be much of this ultra-high-net-worth business here and now there is,” said Susan Traver, the regional president of BNY Mellon Wealth Management.

But everyone in the rest of America at least can go to sleep tonight with a warm and fuzzy feeling of joy, knowing that our money has created such comfortable lives for the political elite.

Milton Pedraza, the CEO of the Luxury Institute, a research and consulting firm, said that purveyors of luxury goods are drawn to the area because it has…a stable economy bolstered by the federal government. Government contracting, where some local entrepreneurs and business owners amassed their fortunes, has been a key driver of the region’s economy for three decades. A third of the region’s gross regional product still comes from federal spending… “Let’s face it . . . the only place with money during the recession was Washington, D.C.,” Pedraza said.

Perhaps we should make a slight correction in the previous excerpt. After all, shouldn’t it read “America suffered a recession because the only place with money was Washington, DC.”

Let’s wrap this up. A few years ago, I issued this video about overpaid bureaucrats.

But I now realize my mini-documentary only scratches the  surface. Yes, there are too many paper-pushers on the government payroll, and of course they get far too much compensation.

But what about unofficial government workforce of over-paid contractors? And all the lobbyists, consultants, and cronyists that exist only because we have a bloated federal government?

Our nation is being seriously damaged by this corrupt system, and I fear that the outcome will be Argentinian-style decline.

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Not only Do They Get Paid too Much, New Evidence Confirms Bureaucrats Don’t Work Very Hard

My Cato Institute colleague, Chris Edwards, put together a remarkable (and depressing) chart showing that federal bureaucrats get almost twice the level of compensation as workers in the productive sector of the economy.

Defenders of the bureaucracy (including a federal pay panel dominated by bureaucrats) claim that government employees actually are underpaid because…well…just because.

My modest contribution to the debate was to put together a chart based on the Labor Department’s JOLTS data, which shows that bureaucrats are far less likely to voluntarily leave their jobs than folks in the private sector, which is very strong evidence that they are being over-compensated.

But all this debate about pay is looking at only one part of the equation. What about the stereotype that bureaucrats don’t work very hard? Well, as anyone who’s ever visited a motor vehicles department or a post office already knows, that’s also true.

And the hard data confirm our personal observations. Here are the main findings of new research by Andrew Biggs of the American Enterprise Institute and Jason Richwine of the Heritage Foundation, which was published in the Wall Street Journal.

…overstaffing is a serious problem in government, and the best evidence is a simple empirical fact: Government employees don’t work as much as private employees. …new evidence from a comprehensive and objective data set confirms that the “underworked” government employee is more than a stereotype. …The time-use survey’s data on work time…allow us to analyze both the number of hours individuals work during a typical workweek and the total number of hours they work during the year. …What we found was that during a typical workweek, private-sector employees work about 41.4 hours. Federal workers, by contrast, put in 38.7 hours, and state and local government employees work 38.1 hours. …Put another way, private employees spend around an extra month working each year compared with public employees.

Here’s the chart Excel generated when I entered the data in a spreadsheet. It must be nice to get paid a lot to work a little.

Actually, maybe it’s not a bad thing that bureaucrats are lazy. Do we really want more diligent IRS agents? More hard-charging OSHA inspectors? Do we want Fannie and Freddie regulators burning the midnight oil concocting more affordable leading rules?

I think you understand my concern.

So this brings us back to the fact that they are paid too much. This video has the gory details.

The real issue, as I state at the end of the video, is that most government jobs shouldn’t exist at all.

By the way, Biggs and Richwine include a very important point in their op-ed about the connection between the current budget negotiations and the existence of an over-paid and under-worked bureaucracy.

This fact may hold different lessons for different people, but our own take is simple: Before we ask private-sector employees to work more to support government, government itself should work as much as the private sector.

As noted above, I want government to do less, not for bureaucrats to do more, but their point is still appropriate.

P.S. Here’s a good joke about government bureaucracy. Here’s a similar joke in picture form. And we find the same humor in this joke, but with a bit more build up.

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The $822,000-per-Year Bureaucrat and the Death of California

Over the years, I’ve shared some outrageous examples of overpaid bureaucrats.

• 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 school superintendent in New York raking in more than $500 thousand of annual compensation.
• 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.

Hopefully we’re all disgusted when insiders rig the system to rip off taxpayers. And I suspect you’re not surprised to see that the worst example on that list comes from California, which is in a race with Illinois to see which state can become the Greece of America.

Well, the Golden State has a new über-bureaucrat. Here are some of the jaw-dropping details from a Bloomberg report.

The numbers are even larger in California, where a state psychiatrist was paid $822,000, a highway patrol officer collected $484,000 in pay and pension benefits and 17 employees got checks of more than $200,000 for unused vacation and leave. The best-paid staff in other states earned far less for the same work, according to the data.

Wow, $822,000 for a state psychiatrist. Not bad for government work. So what is Governor Jerry Brown doing to fix the mess? As you might expect, he’s part of the problem.

…the state’s highest-paid employees make far more than comparable workers elsewhere in almost all job and wage categories, from public safety to health care, base pay to overtime. …California has set a pattern of lax management, inefficient operations and out-of-control costs. …In California, Governor Jerry Brown hasn’t curbed overtime expenses that lead the 12 largest states or limited payments for accumulated vacation time that allowed one employee to collect $609,000 at retirement in 2011. …Last year, Brown waived a cap on accrued leave for prison guards while granting them additional paid days off. California’s liability for the unused leave of its state workers has more than doubled in eight years, to $3.9 billion in 2011, from $1.4 billion in 2003, according to the state’s annual financial reports. …The per-worker costs of delivering services in California vastly exceed those even in New York, New Jersey, Illinois and Ohio.

Actually, it’s not just that he’s part of the problem. He’s making things worse, having seduced voters into approving a ballot measure to dramatically increase the tax burden on the upper-income taxpayers.

I suppose the silver lining to that dark cloud is that many bureaucrats now rank as part of the top 1 percent, so they’ll have to recycle some of their loot back to the political vultures in Sacramento.

But the biggest impact of the tax hike – as shown in the Ramirez cartoon – will be to accelerate the shift of entrepreneurs, investors, and small business owners to states that don’t steal as much. Indeed, a study from the Manhattan Institute looks at the exodus to lower-tax states.

The data also reveal the motives that drive individuals and businesses to leave California. One of these, of course, is work. …Taxation also appears to be a factor, especially as it contributes to the business climate and, in turn, jobs. Most of the destination states favored by Californians have lower taxes. States that have gained the most at California’s expense are rated as having better business climates. The data suggest that many cost drivers—taxes, regulations, the high price of housing and commercial real estate, costly electricity, union power, and high labor costs—are prompting businesses to locate outside California, thus helping to drive the exodus.

Yet another example of why tax competition is such an important force for economic liberalization. It punishes governments that are too greedy and gives taxpayers a chance to protect their property from the looter class.

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Attack of the Taxpayer-Eating Zombie Bureaucrats

A regular feature on this blog is the government-stupidity contest between bureaucrats and politicians from the United States and the United Kingdom.

You can click here to peruse some of the most outrageous examples, including a couple of contestants from the private sector.

This has been a nip-and-tuck race for a long time, but the United Kingdom recently jumped into the lead with two jaw-dropping examples of moronic government behavior.

First, British bureaucrats took some kids away from their foster family because the parents didn’t believe in unlimited immigration, and, second, the U.K. government created a subsidy program that was so convoluted that not one single household in the entire country signed up for the goodies.

You know you’ve reached a special level of incompetence when a government is so bloody stupid that it can’t even give away money.

I was beginning to think the United States was doomed to also-ran status in this race.

But I should have known better. When it comes to finding creative ways to piss away other people’s money and make bone-headed choices, American politicians and bureaucrats are ready to meet the challenge.

This isn’t empty patriotism on my part. For proof, check out this Washington Examiner story about the federal government sending bureaucrats to a posh, $1,000-per-person conference, where they learned…I’m not making this up…how to respond to zombie attacks.

“Give…me…your…wallet”

When zombies attack, the Department of Homeland Security will be prepared. …money from the DHS’s Urban Areas Security Initiative went to buy snow cone machines in Michigan. Places like Fargo, N.D., and Keene, N.H., now have armored vehicles at their disposal, as do many other small towns. Keene said the vehicle was needed to protect its annual Pumpkin Festival. Arizona used $90,000 in DHS funding to install a video monitoring system at the Peoria Sports Complex, because apparently it is in the taxpayers’ interest to monitor the Seattle Mariners and San Diego Padres during spring training. …But if you think that’s waste, you need to know about the extraordinary training that the DHS was able to provide to first responders this year. They made attendance at the HALO Corp.’s 2012 Counter-Terrorism Summit an allowable expense for federal grant money. Yes, the California-based security company’s five-day event was held at a posh island resort and spa just outside of San Diego and cost $1,000 per person to attend, but that’s not even the best part. The showpiece event of the summit made was a live war game of a zombie apocalypse, complete with 40 actors in full zombie makeup as well as “state-of-the-art structure, pyrotechnic battlefield effects, medical special effects, vehicles and blank-firing weapons” according to a promotional video by HALO President Brad Barker. This enabled first responders to participate in a real-life “Dawn of the Dead” scenario and to know precisely what to do when their neighbors start trying to eat their human flesh.

As the Boy Scouts say, it’s best to “be prepared.” And thanks to federal tax dollars, the Department of Homeland Security is ready to defend us from a zombie attack.

I’m basically at a loss for words. Is anybody minding the store back in DC?

“Must…waste…more…money”

Why did this federal contractor think this was a good idea? Why did the Department of Homeland Security think it should be an allowable expense? Why did bureaucrats think it was a worthwhile way of spending their time?

There are no good answers – other than the fact that folks are far more likely to be frivolous and wasteful when they’re spending other people’s money. And that applies to the other examples cited in the excerpt above.

An armored vehicle to protect a pumpkin festival?!? If the taxpayers of Keene, NH, actually think the Canadians are about to sneak over the border and swipe some pumpkins, they should kick in a few bucks and hire an extra cop.

But so long as the kleptomaniacs in Washington are giving away our money, local governments have every reason to dream up ridiculous wish-lists.

No wonder the burden of government spending has reached record levels.

P.S. Don’t forget that the Department of Homeland Security was created during the Bush years. Another black mark on that statist period.

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Shocker: Bureaucrat-Dominated Panel Claims Bureaucrats Are Underpaid

Since I’ve been in Washington from more than 25 years, it takes something really remarkable to shock me. But when I read today that federal bureaucrats are supposedly underpaid, notwithstanding all the evidence to the contrary, I thought somebody had sent me an article from the Onion.

But then I saw that the assertion of underpaid bureaucrats was put together by the stooges at the Federal Salary Council, a body controlled by government employee unions.

Here are some excerpts from a Federal News Radio report about their preposterous claim.

The gap in pay between federal employees and private-sector workers has jumped 8 percentage points since last year, according to new data presented at a Federal Salary Council meeting Friday. On average, federal employees earn 34 percent less than their private-sector counterparts, according to the council’s analysis. The pay gap, which is calculated using data from the Bureau of Labor Statistics based on pay in 34 locality pay areas, was 26 percent last year. The council, which is made up of labor representatives and pay experts, makes recommendations on federal pay to the President’s Pay Agent.

But the article was fair in that it cited some contrary data.

A Congressional Budget Office study released in January found, overall, federal employees actually earn about 2 percent more in wages compared to private-sector workers, with wider differences based on education level. But a June 2011 report from the American Enterprise Institute, a conservative think tank, indicated government pay outstripped private-sector pay by 14 percent.

Though the author of the article should have cited the work of my colleague Chris Edwards, who has revealed that federal bureaucrats get twice the level of compensation as people in the economy’s productive sector when you include the value of fringe benefits.

Here’s my video on the topic, which is filled with factoids.

But if you want the single piece of evidence that completely debunks the silly assertion that bureaucrats are underpaid, just go to Table 4 of this Department of Labor release. You’ll find the voluntary quit rate for different parts of the workforce.

As you can see from the chart, people in the private sector are more than three times more likely to quit their jobs.

Now ask yourself a simple question: Are people more likely to quit jobs when they’re underpaid or overpaid?

But that shouldn’t be the end of the discussion. The more important question is whether most federal bureaucrats should even have jobs. I’m mostly concerned about the fact that we have useless bureaucracies such as the Department of Agriculture and the Department of Housing and Urban Development.

The fact that the bureaucrats are overpaid at these agencies is merely adding insult to injury. It’s the size of government that we should worry about, period.

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In Addition to Its Many other Flaws, Obamacare Is Becoming a Racket for Overpaid Government Bureaucrats

I’ve certainly complained about Obamacare from a fiscal perspective, warning that it means higher taxes and more spending.

And I’ve also warned that it will make our health care system less efficient and could lead to some of the horrifying examples of rationing and poor care that you find in the United Kingdom (scroll to the bottom of this post for some shocking examples).

But if you need another reason to be upset, it turns out that Obamacare is going to be a very lucrative gig for a new crop of government bureaucrats.

Here are some very disturbing details from the Pueblo Chieftan in Colorado.

Eye-popping salaries proposed for employees of the health benefits exchange being formed in Colorado grabbed the attention of Republicans and Democrats alike on Thursday. A subcommittee of the board charged with establishing the exchange  is considering a draft budget for its federal grant application that would create 24 positions and pay those employees a total of more than $3 million annually to manage the health care cooperative. The average annual salary of a health benefits exchange employee would exceed $125,000 under the plan. …“We have executive directors (of state departments) that are in charge of thousands of people here that make significantly less than that,” said Sen. Bill Cadman, R-Colorado Springs. …A Democrat on the committee overseeing enactment of health benefits exchange legislation in the state agreed that the figures are worthy of scrutiny. …Under the health care overhaul, states were required to establish exchanges. Colorado authorized its exchange this year in SB200.

Keep in mind that the $125,000 figure is an average, which means many of the bureaucrats will be getting much bigger paychecks.

“Obamacare is a great racket!”

And also remember that we’re talking Colorado, not someplace like New York City where the cost of living is a bit higher.

Even more important, the article refers to the “average annual salary,” which means it probably doesn’t include the gold-plated benefit packages that are far more generous than generally available in the private sector (state and local bureaucrats, for instance, make out like bandits on pensions).

And to show that this story is just the tip of the iceberg, let’s recycle my video about overpaid government bureaucrats.

And if all the data in the video doesn’t convince you, check out this chart.

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Read This Horrifying George Will Column and You Will – if You Have any Decency – Become a Libertarian

I periodically provide mind-blowing examples of individuals who have their lives turned upside down by evil bureaucrats.

You may think “evil” is too strong a word, but it sticks in my mind after perusing these examples of abusive actions by the federal government.

• A story of vicious IRS persecution.
• Two stories of innocent people who were victimized by the idiotic Drug War.
• A video about how the EPA tried – and fortunately failed – to destroy a family.
• A story about the Justice Department’s discriminatory attack on a hapless homeowner.

Now we have a George Will column that will get you very angry. At least if you’re a good person.

Will starts by describing the federal bureaucracy’s attack on an innocent woman for a non-crime.

…our unhinged government, with an obsession like that of Melville’s Ahab, has crippled Nancy Black’s scientific career, cost her more than $100,000 in legal fees — so far — and might sentence her to 20 years in prison. This Kafkaesque burlesque of law enforcement began when someone whistled. Black, 50, a marine biologist who also captains a whale-watching ship, was with some watchers in Monterey Bay in 2005 when a member of her crew whistled at the humpback that had approached her boat, hoping to entice the whale to linger. Back on land, another of her employees called the National Oceanic and Atmospheric Administration (NOAA) to ask if the whistling constituted “harassment” of a marine mammal, which is an “environmental crime.” NOAA requested a video of the episode, which Black sent after editing it slightly to highlight the whistling. NOAA found no harassment — but got her indicted for editing the tape, calling this a “material false statement” to federal investigators, which is a felony under the 1863 False Claims Act, intended to punish suppliers defrauding the government during the Civil War.

But it gets worse, because the federal jack-boots then raided her office (I don’t even know what “jack-boots” are, but they signify government thuggery, and that’s definitely a good description of what happened).

…after this bizarre charge — that she lied about the interaction with the humpback that produced no charges — more than a dozen federal agents, led by one from NOAA, raided her home. They removed her scientific photos, business files and computers.

This unfortunate woman has also been charged with another non-crime.

She has also been charged with the crime of feeding killer whales when she and two aides were in a dinghy observing them feeding on strips of blubber torn from their prey — a gray whale. To facilitate photographing the killers’ feeding habits, she cut a hole in one of the floating slabs of blubber and, through the hole, attached a rope to stabilize the slab while a camera on a pole recorded the whales’ underwater eating. So she is charged with “feeding” killer whales that were already feeding on a gray whale they had killed. She could more plausibly be accused of interfering with the feeding.

As an aside, Will notes that the NOAA bureaucrats have little regard for the Constitution.

Six years ago, NOAA agents, who evidently consider the First Amendment a dispensable nuisance, told Black’s scientific colleagues not to talk to her and to inform them if they were contacted by her or her lawyers. Since then she has not spoken with one of her best friends.

Most important, he concludes with the key point about how all of us are threatened by Leviathan.

In 1980, federal statutes specified 3,000 criminal offenses; by 2007, 4,450. They continue to multiply. Often, as in Black’s case, they are untethered from the common-law tradition ofmens rea, which holds that a crime must involve a criminal intent — a guilty mind. Legions of government lawyers inundate targets like Black with discovery demands, producing financial burdens that compel the innocent to surrender in order to survive. The protracted and pointless tormenting of Black illustrates the thesis of Harvey Silverglate’s invaluable 2009 book, “Three Felonies a Day: How the Feds Target the Innocent.” Silverglate, a civil liberties lawyer in Boston, chillingly demonstrates how the mad proliferation of federal criminal laws — which often are too vague to give fair notice of what behavior is proscribed or prescribed — means that “our normal daily activities expose us to potential prosecution at the whim of a government official.” Such laws, which enable government zealots to accuse almost anyone of committing three felonies in a day, do not just enable government misconduct, they incite prosecutors to intimidate decent people who never had culpable intentions. And to inflict punishments without crimes. …The more Americans learn about their government’s abuse of criminal law for capricious bullying, the more likely they are to recoil in a libertarian direction and put Leviathan on a short leash.

Utterly disgusting. As Glenn Reynolds periodically suggests, “tar, feathers” would be an appropriate way of dealing with these hyenas.

By the way, government thuggery is not limited to the crowd in Washington.

• If you have a soul, you will be outraged by this example of a local government abusing poor people.
• If you have decency, you will be disgusted by this example of a state government persecuting someone who didn’t commit a crime.
• If you believe in basic rights, you will be horrified by this example of a foreign government seeking to outlaw political dissent and free speech.

P.S. For the second time, I feel compelled to apologize to Hyenas. They’re part of the natural ecosystem. Thuggish bureaucrats, by contrast, are a malignant and artificial force.

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Here’s Why the Cayman Islands Is Considering Fiscal Suicide

What Do Greece, the United States, and the Cayman Islands Have in Common?

At first, this seems like a trick question. After all, the Cayman Islands are a fiscal paradise, with no personal income tax, no corporate income tax, no capital gains tax, and no death tax.

By contrast, Greece is a bankrupt, high-tax welfare state, and the United States sooner or later will suffer the same fate because of misguided entitlement programs.

But even though there are some important differences, all three of these jurisdictions share a common characteristic in that they face fiscal troubles because government spending has been growing faster than economic output.

I’ve written before that the definition of good fiscal policy is for the private sector to grow faster than the government. I’ve humbly decided to refer to this simple principle as Mitchell’s Golden Rule, and have pointed out that bad things happen when governments violate this common-sense guideline.

In the case of the Cayman Islands, the “bad thing” is that the government is proposing to levy an income tax, which would be akin to committing fiscal suicide.

The Cayman Islands are one of the world’s richest jurisdictions (more prosperous than the United States according to the latest World Bank data), in part because there are no tax penalties on income and production.

So why are the local politicians considering a plan to kill the goose that lays the golden eggs? For the simple reason that they have been promiscuous in spending other people’s money. This chart shows that the burden of government spending in the Cayman Islands has climbed twice as fast as economic output since 2000.

Much of this spending has been to employ and over-compensate a bloated civil service (in this respect, Cayman is sort of a Caribbean version of California).

In other words, the economic problem is that there has been too much spending, and the political problem is that politicians have been trying to buy votes by padding government payrolls (a problem that also exists in America).

The right solution to this problem is to reduce the burden of government spending back to the levels in the early part of last decade. The political class in Cayman, however, hopes it can prop up its costly bureaucracy with a new tax – which euphemistically is being called a “community enhancement fee.”

The politicians claim the tax will only be 10 percent and will only be imposed on the expat community. But it’s worth noting that the U.S. income tax began in 1913 with a top rate of only 7 percent and it affected less than 1 percent of the population. But that supposedly benign tax has since become a monstrous internal revenue code that plagues the nation today.

Except the results will be even worse in Cayman because the thousands of foreigners who are being targeted easily can shift their operations to other zero-income tax jurisdictions such as Bermuda, Monaco, or the Bahamas. Or they can decide that to set up shop in places such as Hong Kong and Singapore, which have very modest income tax burdens (and the ability to out-compete Cayman in other areas).

As a long-time admirer of the Cayman Islands, I desperately hope the government will reconsider this dangerous step. The world already has lots of examples of nations that are following bad policy. We need a few places that are at least being semi-sensible.

By they way, I started this post with a rhetorical question about the similarities of Greece, the United States, and the Cayman Islands. Let’s elaborate on the answer.

Here’s a post that shows how Greece’s fiscal nightmare developed. But let’s show a separate chart for the burden of federal spending in the United States.

What’s remarkable is that the federal government and the Cayman Islands government have followed very similar paths to fiscal trouble. Indeed, Caymanian politicians have achieved the dubious distinction of increasing the burden of government spending at a faster rate than even Bush and Obama. No mean feat.

This data for the U.S. chart doesn’t include the burden of state and local government spending, so the Cayman Islands still has an advantage over the United States, but I’ll close with a prediction.

Cayman’s proposed income tax

If the Cayman Islands adopts an income tax – regardless of whether they call it a community enhancement fee (to misquote Shakespeare, a rotting fish on the beach by any other name would still smell like crap), it will be just a matter of time before the burden of government spending becomes even more onerous and Cayman loses its allure and drops from being one of the world’s 10-richest jurisdictions.

Which will be very sad since I’ll now have to find a different place to go when America suffers its Greek-style fiscal collapse.

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What’s the Secret Recipe for Job Creation?

With Obama’s dismal record on jobs, there’s a lot of debate about how to improve the employment situation.

I take the pro-market position in this special report on Fox News.

The discussion focuses on the following questions.

• Does government spending create jobs? This is the discredited Keynesian notion that you become richer by switching money from your right pocket to left pocket, and I explain that this approach has never worked.
• What does create jobs? I explain we need to shrink the burden of government and I cite my favorite Golden Rule about the importance of making sure the productive sector of the economy grows faster than the public sector.
• Should there be more government workers? Anyone who has seen this video knows my answer to that question.
• Is it a good idea to raise taxes on the rich? I argue that penalizing success doesn’t make sense, so class warfare tax policy should be rejected.
• Would it help to impose higher taxes on corporations? Since the United States already penalizes companies with the world’s highest corporate tax rate, that question answers itself.
• Should the United States copy Europe? My answer shouldn’t be a surprise. I say that Europe is a giant warning signal about the dangers of excessive government.

In other words, there is no secret to job creation. Just get government out of the way.

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The United Kingdom Is Doomed by a Perniciously Wimpy Form of Political Correctness

Normally, I get pessimistic about the future when I think about wasteful spending programs that will drive almost all developed nations into bankruptcy. And America is on that list, by the way, because of our poorly designed entitlement programs.

But sometimes my despair is the result of idiotic political correctness and bone-headed bureaucracy. And for some reason, as shown by these examples, the United Kingdom seems to have a disproportionate share of morons who want to impose bad policy on their fellow citizens.

• A job-placement center got in trouble for discriminating against incompetent people by seeking “reliable” and “hard-working” candidates.
• A women who was being threatened by thugs got in trouble with the police for brandishing a knife in her own home.
• A proposal to prevent children from watching Olympic shooting events.
• A man got arrested for finding a gun in his yard and turning it over to the police.
• The government wanted to require “competency tests” for pet owners.
• An ID requirement to buy teaspoons.
• The most useless sign in the history of the world.
• A proposal to ban skinny models.

But I don’t know if any of those horror stories can match this baffling story reported in the Telegraph.

Public Enemy No. 1?

When the chief starter at the London Olympics agreed to fire his pistol to start the races at a school sports day, parents thought it was a wonderful treat for their children. But they did not count on the intervention of health and safety officials from their local council, who ruled that the noise from Alan Bell’s starting pistol would be too frightening for the youngsters. Bizarrely, the local authority instead suggested playing a recording of a starting pistol on an iPod before agreeing to let Mr Bell start the races by sounding a klaxon. …One parent, who did not wish to be named, told a Sunday newspaper: “It was ridiculous. We were told that the children would be distressed by Mr Bell firing his starting pistol. “Anyone who believes they would be frightened by a starting pistol has never experienced the noise at a typical three-year-old’s birthday party. …Norman Gardiner, president of the Pitreavie Amateur Athletics Club in Dunfermline, said the decision was “health and safety gone mad.”

It’s amazing to think that the United Kingdom once ruled half the world, but now produces pencil-neck bureaucrats who think starting pistols are a menace to society.

But we Americans shouldn’t feel superior. We’re traveling down the same path.

• A Rhode Island boy got in trouble for bringing toy soldiers to school.
• A student in San Diego got in trouble for making a motion detector for a science project, simply because someone decided it resembled a bomb.
• The military was criticized for giving Osama bin Laden an Indian code name (Geronimo) as part of the operation to exterminate the al Qaeda dirtbag.
• A Florida student was expelled for having a toy gun on school property.
• And how can we omit the politicians in San Francisco, who decided that banning happy meal toys was an appropriate use of government coercion.
• We also have regulations in Maryland governing the application of sunscreen at summer camps.
• And proposals in Seattle to require life vests on swimmers who are more than five feet from shore.

My initial instinct is that we should fire the over-paid bureaucrats who generate this kind of nonsense. I admit that such as step might only address the symptom of a politically correct world, but it would be a good start.

(hat tip to my fellow Bulldog Charles Oliver)

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The Joy of Government-Run Healthcare: The UK’s Gilded Bureaucrats and Dying Patients

I’m not sure whether this is a post about America’s dismal future if Obamacare is allowed to take root or whether this is a post about bureaucrats ripping off taxpayers.

But I do know that it shows that the insiders take care of themselves quite nicely when the government seizes more control of a nation’s healthcare sector.

Here’s a report from the UK-based Telegraph about how bureaucrats at a Scottish branch of the National Health Service are bilking taxpayers.

National Procurement, a branch of the NHS National Services Division, arranged for staff who are deemed to be “regular users” of cars for business to get the cars through a taxpayer-backed vehicle-leasing scheme. …Figures provided by National Procurement in response to a Freedom of Information request showed that…one in eight members of staff, had used the 4x4s and convertibles to drive to work. Much of the insurance, petrol, road tax and leasing is funded by the state.

And we’re not talking cheap automobiles. Keep in mind, when you read this next passage, that £25,000 is almost $40,000.

One employee was leased a £27,000 Mercedes, while three other workers have been driving £23,000 S-line Audi A3 sports cars. Another employee received a £28,300 Audi TT. Since the beginning of this year, five new cars have been leased to staff, including a four-door BMW worth more than £30,500. Other leased vehicles include another Audi sports car worth more than £25,000 and three Range Rover Evoques costing up to £29,500.

So how do they work this scam? Simple, they take needless trips.

…staff have had to clock up a minimum of 5000 business miles during office hours to qualify for the scheme. …A department source told the Herald newspaper that some members of staff were using their leased cars for 80-mile round trips between National Procurement’s two offices, in Larkhall, Lanarkshire, and South Gyle in Edinburgh, even though there are adequate video conferencing facilities at both locations.

One hopes that this scandal in a Scottish branch is an exception and that most bureaucrats don’t behave in a similarly reprehensible fashion.

But given the bloated size of the National Health Service bureaucracy, it’s more likely that this is just the tip of the iceberg.

There is an entitlement culture in most government bureaucracies, and I would be shocked in the paper pushers and memo writers hadn’t figured out how to manipulate the system

And since there are more than 1.6 million of them, the magnitude of the fraud is presumably enormous.

The obvious follow-up question is whether taxpayers in the United Kingdom are getting some good value from this army of cosseted bureaucrats?

Unfortunately, that’s not the case. Here are some chilling excerpts from a story in the Daily Mail.

NHS doctors are prematurely ending the lives of thousands of elderly hospital patients because they are difficult to manage or to free up beds, a senior consultant claimed yesterday. Professor Patrick Pullicino said doctors had turned the use of a controversial ‘death pathway’ into the equivalent of euthanasia… There are around 450,000 deaths in Britain each year of people who are in hospital or under NHS care. Around 29 per cent – 130,000 – are of patients who were on the LCP. Professor Pullicino claimed that far too often elderly patients who could live longer are placed on the LCP and it had now become an ‘assisted death pathway rather than a care pathway’.

Here are a couple of horrifying examples.

Professor Pullicino revealed he had personally intervened to take a patient off the LCP who went on to be successfully treated. He said this showed that claims they had hours or days left are ‘palpably false’. In the example he revealed a 71-year-old who was admitted to hospital suffering from pneumonia and epilepsy was put on the LCP by a covering doctor on a weekend shift. Professor Pullicino said he had returned to work after a weekend to find the patient unresponsive and his family upset because they had not agreed to place him on the LCP. ‘I removed the patient from the LCP despite significant resistance,’ he said. ‘His seizures came under control and four weeks later he was discharged home to his family,’ he said.

In other words, government-run healthcare in the United Kingdom is a great scam if you’re an insider. But not such a good deal if you’re someone who needs, well, healthcare.

Sort of makes you wonder what Paul Krugman was thinking when he wrote, “In Britain, the government itself runs the hospitals and employs the doctors. We’ve all heard scare stories about how that works in practice; these stories are false.”

I guess the English newspapers are making up stories to denigrate their own nation. If you want to see more of these “false” stories, click here, here, here, here, here, here, here, here, here, here and here.

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California’s Fiscal Policy and the Lesson of Humpty Dumpty

I’ve almost exhausted my interest in California’s suicidal fiscal policy. How many times, after all, can you write about politicians over-taxing and over-spending to the point of economic ruin?

But everyone has a cross to bear in life, and (if you allow me to mix my metaphors) griping about bloated government is my Sisyphean task.

So here’s a good cartoon about the bankruptcy of Stockton, California. I assume the California egg is supposed to be Governor Brown, but that’s not important. The obvious lesson is that the entire state will follow Stockton into collapse unless there’s a dramatic shift in policy.

As explained in this video, the main problem with state and local governments such as California and Stockton is that there are too many bureaucrats and they are paid too much (this cartoon makes the same point in a more amusing fashion).

But to be more specific, what’s killing them are the promises for retiree pensions and health care.

Interestingly, the federal government also is heading toward a fiscal cliff because of promises to spend money on retirees, but the nitwits in Washington have created entitlements for the entire population and not just for a privileged class of bureaucrats.

So the moral of the story is that as goes Stockton, so goes California. And as goes Greece, so goes America.

P.S. You can see some other cartoons from Lisa Benson here, here, here, here, and here.

P.P.S. Here’s a great Chuck Asay cartoon about California.

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On Reason TV, Andrew Ferguson Discusses the Parasite Economy of Washington, DC

Back in February, I posted this startling map showing that 10 of America’s 15-richest counties are the bedroom communities surrounding Washington, DC.

There’s a lot of money in Washington because federal bureaucrats are wildly overpaid, as I document in this video, and also because there is a huge shadow workforce of contractors, consultants, and lobbyists who have their snouts buried deeply in the public trough.

In an interview for Reason TV, Andy Ferguson talks about how these well-paid parasites have created a bubble economy in Washington.

And you know it must be true because even the leftists at Politico wrote a story acknowledging how the DC area was thriving at a time when the rest of America was struggling.

In other words, the poor and middle-class people in the real world are paying high taxes to subsidize the indolent moochers of Washington.

You would think that’s one kind of redistribution that the left would oppose. Heck, it’s almost enough to make you think that it would be a good idea to reduce the size and scope of the federal government.

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Funny Cartoon (Unless You’re the Person Being Coerced by Union Thugs)

If there was a contest for the best political cartoon about what’s been happening in Wisconsin, I would pick either this “fake negotiation” cartoon by Ramirez or this “coach class” cartoon by Payne.

But here’s a new entry from Bok that also deserves some consideration.

If you like humor about the Wisconsin fight, check out this Hitler parody about the recall.

And if you enjoy humor about overpaid government employees, regardless of where they’re located, here’s a great top-10 list from Letterman and here’s a cartoon about the relationship of bureaucrats and taxpayers.

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Hilarious Hitler Parody about Wisconsin Recall

I thought this cartoon about overpaid bureaucrats in Wisconsin was amusing, but this Hitler parody about the recall result is an instant classic.

Speaking of Hitler parodies, here’s a good one about the European downgrade.

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Predicting the November Election (along with Thoughts on Wisconsin and California)

Since I’m a policy wonk and not a political prognosticator, I’m not sure why people keep asking me what will happen in the November elections. But since I got lucky with my 2010 predictions, I may as well throw in my two cents.

The election is now exactly five months away, so here’s my first cut at what will happen.

At this point, I am predicting an Obama victory, albeit by a much narrower margin than in 2008.

Given the weak economy and unpopularity of Obamacare, one might think Romney should be the favorite. However, the establishment media is completely in the tank for Obama and Romney is not exactly the strongest candidate, and I think those factors will tip the scales in November.

That being said, Obama has dropped from being a 60 percent-plus favorite on Intrade to just a 52.3 percent favorite in recent weeks, so GOP partisans have reasons to be hopeful.

Since all I care about is policy, I confess I’m not sure whether to be happy about my prediction. It all boils down to whether the “Richard Nixon Disinfectant Rule” applies to Romney. As of right now, we don’t know the answer. Here’s what I told ABC News earlier this week.

“The negative spin is that he’s said all these things to basically get past a conservative-leaning Republican Party electorate and that he’s really the Massachusetts moderate that some of his opponents tried to make him out to be,” said Dan Mitchell, a Cato economist… The flip side, Mitchell said, is that if Romney does stick to his promises to conservatives, they’ll be pleased when he gives support to Paul Ryan’s budget, takes steps to lower the spending-to-GDP ratio significantly, and offers states flexibility on spending Medicaid money.

We’ll have plenty of time between today and November 6 to analyze the presidential election, so let’s leave the national stage and take a look at what happened yesterday in Wisconsin and California.

We’ll start with California, because there were two very important – but largely overlooked – votes in San Diego and San Jose about curtailing lavish pensions for bureaucrats. The results were shocking, particularly since California is a left-wing state. Here’s part of the AP report.

Voters in two major California cities overwhelmingly approved cuts to retirement benefits for city workers in what supporters said was a mandate that may lead to similar ballot initiatives in other states and cities that are struggling with mounting pension obligations. Supporters had a simple message to voters in San Diego and San Jose: Pensions for city workers are unaffordable and more generous than many private companies offer… In San Diego, 66 percent voted in favor of Proposition B, while 34 percent were opposed. Nearly 97 percent of precincts were tallied by early Wednesday. The landslide was even bigger in San Jose, the nation’s 10th-largest city. With all precincts counted, 70 percent were in favor of Measure B and 30 percent were opposed.

Since I’ve written repeatedly about excessive compensation for government employees, these results are encouraging. Perhaps the gravy train has finally been derailed

Yesterday’s big election, though, was in Wisconsin. Republicans took control of the state in 2010 and enacted laws to restrain the power of union bureaucracies, which led to a counterattack by the left. First, there was a recall effort against Republicans in the State Senate and that failed. Then there was a recall against one of the GOP judges on the state’s Supreme Court, and that failed.

The climactic battle yesterday was to recall Governor Scott Walker. So how did that turn out? Let’s enjoy these excerpts from the Washington Post.

Wisconsin Gov. Scott Walker won a vote to keep his job on Tuesday, surviving a recall effort that turned the Republican into a conservative icon…That made Walker the first governor in U.S. history to survive a recall election; two others had failed. …the night provided a huge boost for Walker — as well as Republicans in Washington and state capitals who have embraced the same energetic, austere brand of fiscal conservatism as a solution for recession and debt. In a state known for a strong progressive tradition, Walker defended his policies against the full force of the labor movement and the modern left. And he won, again.

By the way, the final result in the Badger State was 53 percent-46 percent and I predicted 54 percent-46 percent, so I somewhat atoned for my awful guess on the Iowa caucuses.

P.S. This cartoon accurately shows what was at stake in Wisconsin.

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Contract for Buffalo Teachers Shows the Wrong Way of Cutting Excess Bureaucratic Blubber

Government bureaucrats are significantly overpaid compared to folks in the productive sector of the economy.

So you would think I’d support cuts, especially the kind that get rid of excess blubber in the government workforce.

But not when it means higher costs for taxpayers, and that’s exactly what’s happening in New York, where Buffalo taxpayers cough up more money every time some bureaucrat goes under the knife for cosmetic procedures such as liposuction.

Here are some excerpts from a report in the UK-based Daily Mail.

Teachers in Buffalo are getting plastic surgery on the tax payer’s buck, it has been revealed. Tummy tucks, liposuction and Botox are all part of the controversial one of a kind health plan. …it is a perk that comes with a price tag. Last year Buffalo schools paid $5.9 million for its teachers to have plastic surgery. In 2010 the figure was up at $9 million. …60 teachers spent $30,000 each on procedures in 2011, an investigation by the school board revealed, and because the schools are self-insured, tax payers foot the bill. …The policy to pay for teachers to have surgery started out innocently enough – it was intended for accident and burns victims in need of reconstructive surgery. But in the age of cosmetic surgery the rider extends to arm lifts, face lifts and breast enhancements, with surgeons advertising their services in the teacher’s union newsletter.

Wow. It’s bad enough that government workers get excessive salaries and gold-plated benefits. But this takes it to a new level.

At least we see an example of economics in action. How likely is it that plastic surgeons would be advertising in the union’s newsletter in the absence of taxpayer financing?

P.S. Here’s David Letterman’s top-10 list of how to tell you’re a unionized government bureaucrat. Liposuction isn’t on the list, but wait ’til next year.

P.P.S. Just in case you think I’m exaggerating about overpaid government employees, take a look at this map showing 10 of the 15 richest counties in America.

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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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I Always Suspected Greek Bureaucrats Were Useless Pieces of S**t, but even I’m Surprised to Learn that They’re Actually Collecting the Stuff

I’ve been having fun in recent months by comparing some of the foolish decisions of politicians and bureaucrats in the United States and United Kingdom. Here’s part of what I wrote in early January.

In June of last year, I posted several examples of idiotic government policy from both the United States and United Kingdom and asked which nation had the dumbest bureaucrats and politicians.

Since then, we have found new examples of brain-dead government and jaw-dropping political correctness from England, including an effort to stop children from watching Olympic shooting events and (what must be) the most pointless sign in the history of the world.

But American politicians have been busy as well in recent months, with impressive displays of incompetence and stupidity such as preventing a girl from boarding a plane because her purse had an image of a gun and a local school calling the police because a little girl kissed a little boy in gym class.

These examples are so absurd that one hopes the reporters somehow screwed up and get their stories wrong.

But now, thanks to a story sent by a friend, I’ve come to the conclusion that there is no limit to stupid and clueless behavior by government.  Here are some of the mind-bogglingly unbelievable details from an English-language Greek news site.

It took 10 months, a fat bundle of paperwork, countless certificates, long hours of haggling with bureaucrats and overcoming myriad other inconceivable obstacles for one group of young entrepreneurs to open an online store. …opening an online store based in Greece is no job for the fainthearted. …Antonopoulos and his partners spent hours collecting papers from tax offices, the Athens Chamber of Commerce and Industry, the municipal service where the company is based, the health inspector’s office, the fire department and banks. At the health department, they were told that all the shareholders of the company would have to provide chest X-rays, and, in the most surreal demand of all, stool samples.

As you can imagine, I think it’s ridiculous that a business has to take 10 months to get permission to operate. You also can guess that I’m shaking my head with dismay at all the regulatory hurdles. And I am utterly dumbfounded that you need to submit chest X-rays to open an online store.

But I can’t even begin to describe my reaction to the requirement for stool samples. I was tempted to write the previous sentence in ALL CAPS. I also thought about unleashing my inner teenager and writing WTF, OMG, and LMAO.

New Symbol of the Greek Government?

I confess, though, that I’m not quite sure what to write. It’s as if we’ve passed into a parallel dimension where parody and satire have become superfluous.

The only thing that rivals this is the story about the Greek government deciding that pedophiles deserve disability payments.

And to add insult to injury, the politicians from Europe and elsewhere are processing yet another bailout for this wasteful and spendthrift government.

Some people thought I was being a bit over-the-top when I did an interview and said the Greeks shouldn’t be allowed to “loot and mooch their way through life.”

But I think I understated the problem. Brainless policy choices are probably the inevitable result of having so many bureaucrats that they resort to asking for stool samples to justify their pointless and empty lives.

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Based on Where the Top 1 Percent Lives, the Occupy Crowd Should Be Protesting Against Big Government

I’ve written before about how big government is enriching people in the Washington metropolitan area. This is for two reasons.

First, bureaucrats are paid too much, getting twice as much compensation, on average, as people in the productive sector of the economy.

Second, lobbyists, contractors, and interest groups have figured out how to get lucrative positions at the federal trough.

A new report from MSN Money illustrates how the political elite is getting very rich by plundering honest Americans. America has 3,033 counties, and they identified the 15 richest jurisdictions from that list.

Of those 15 super-elite counties (the top 1/2 of one percent), 10 are in the Washington metropolitan area. I’ve identified them with stars in the map.

You may be wondering, by the way, about the location of the other counties in the top 15. Well, four of them are suburbs of New York City, meaning that they are home to rich Wall Street people who mooched from the taxpayers thanks to TARP bailouts and other subsidies.

So if you really want to be cynical, you could count them as auxiliary counties of Washington, DC. That’s probably an unfair conclusion, but TARP was unfair to honest and hard-working people, so I don’t feel too guilty.

As far as I can tell, the only untarnished jurisdiction in the top 15 is Douglas County, Colorado. And given that these are the folks who are implementing a good school choice plan, it seems that we have a group of productive people who also believe in doing the right thing.

For more information about the overcompensation of bureaucrats, this video is loaded with information.

Most important of all, remember that any proposals to increase government spending will further widen the income gulf between the political elite and regular Americans. And any initiative to boost the tax burden would lead to the same result.

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Acting as the Typhoid Mary of the Global Economy, the OECD Urges Higher Taxes in Latin America

Is it April Fool’s Day? Has somebody in Paris hacked the website at the Organization for Economic Cooperation and Development? Have we been transported to a parallel dimension where up is down and black is white?

Please forgive all these questions. I’m trying to figure out why any organization – even a leftist bureaucracy such as the OECD – would send out a press release entitled, “Rising tax revenues: a key to economic development in Latin American countries.”

Not even Keynesians, after all, think higher taxes are a recipe for growth.

Ah, never mind. I just remembered that the OECD is a hotbed of statism, so the press release makes perfect sense. After all, the US-taxpayer-funded organization has become infamous for reflexively advocating big government.

• The OECD has an anti-tax competition project designed to prop up Europe’s bankrupt welfare states.
• The OECD is pushing a “Multilateral Convention” that is designed to become something akin to a World Tax Organization, with the power to persecute nations with free-market tax policy.
• The OECD has endorsed Obama’s class-warfare agenda, publishing documents endorsing “higher marginal tax rates” so that the so-called rich “contribute their fair share.”
• The OECD pulled off a hat trick of bad policy in a 2010 document, promoting a value-added tax, Obama’s global warming agenda, and failed Keynesian stimulus.
• The OECD endorsed Obamacare, as I explain in this video.
• The OECD even advocates higher taxes when nations are in the middle of economic crisis.

With this dismal track record, it’s hardly a surprise that the Paris-based bureaucracy is now pushing to undermine prosperity in Latin America. Here’s some of what the OECD said in its release.

Additional tax revenues enable governments to simultaneously improve their competitiveness and promote social cohesion through increased spending on education, infrastructure and innovation. Latin American countries have made great strides over the past two decades in raising tax revenues.

You won’t be surprised when I tell you that the Paris-based bureaucrats do not bother to provide even the tiniest shred of proof to support the silly claim that higher taxes improve competitiveness. But that shouldn’t be surprising since even Keynesians don’t believe something that absurd.

And the claim about social cohesion also is a bit of a stretch given the riots, chaos, and social disarray in many European nations.

The only accurate part of the passage is that Latin American nations have increased tax burdens over the past 20 years. To the tax-free bureaucrats at the OECD, that is making “great strides.”

Let’s see what else the OECD had to say.

Despite these improvements, significant gaps between Latin America and OECD countries remain. The average tax to GDP ratio in OECD countries is much higher than in Latin American countries (33.8% compared to 19.2% in 2009, respectively). As the countries in the region still find themselves in relatively strong economic conditions, now is the time to consider reforms that generate long-term, stable resources for governments to finance development.

Wow. The OECD is implying that Latin American nations should mimic OECD nations. In other words, the bureaucrats in Paris apparently think it makes sense to tell nations to copy the failed high-tax, welfare-state model of countries such as Greece, Italy, and Spain.

Is that really the lesson they think people should learn from recent fiscal history? Are they really so oblivious and/or blinded by ideology that they issued the release as these European nations are in the middle of a fiscal crisis?

To further demonstrate their bias, the folks at the OECD even acknowledged that the Latin American nations, with their less oppressive tax regimes, are enjoying “relatively strong economic conditions.” Normal people would therefore conclude that the failed high-tax European nation should copy Latin America on fiscal policy, not the other way around. But not the geniuses at the OECD.

Now that we’ve addressed the awful policy advice of the OECD, let’s take a moment to look at the real policy challenges facing Latin America.

The Fraser Institute, in cooperation with dozens of other research organizations around the world, produces every year a comprehensive survey measuring Economic Freedom of the World.

The report ranks 141 nations based on dozens of variables that are used to construct scores for five key measures of economic freedom. Of those five categories, the Latin nations have the highest average ranking on…you guessed it…fiscal policy.

Yet the OECD wants policies that will undermine the competitiveness of the Latin nations, hurting them in the area where they are doing a halfway decent job.

If the bureaucrats actually wanted to boost economic performance in Latin America, they would be pressuring those nations to make reforms in the two areas where the burden of government is most severe – legal structure/property rights and regulation.

But that would make sense, which is contrary to the OECD’s mission of promoting statism.

The only semi-positive thing to say about the OECD is that it is consistent. As this video explains, the Paris-based bureaucrats are advocating bigger government in the United States. And to add insult to injury, they’re using American tax dollars to push that agenda.

What a scam. Politicians from various nations send taxpayer money to Paris. The bureaucrats at the OECD then issue reports and studies saying the politicians in those countries should raise taxes and increase the burden of government. Everybody wins…except for taxpayers and the global economy.

Per dollar spent, OECD subsidies may be the most destructively wasteful part of the federal budget. And that says a lot.

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Creating Jobs, the Obama Way

I sometimes get a bit pessimistic about America’s future, especially when I see numbers showing record levels of dependency.

But sometimes looking at big-picture data doesn’t quite capture what’s really happening.

If you want a glaring sign of American decline, here’s part of a grim story from NBC in New York.

Economic woes have forced at least one city agency into a hiring spree — adding more workers to process the demand for food stamps and other assistance. The Human Resources Administration added more than 100 workers last July and plans to hire another 100 to serve the burgeoning number of New Yorkers applying for food stamps and rent assistance at their offices… About 1.8 million New Yorkers are now on food stamps, which marks nearly a 65 percent increase from four years ago, according to city records.

If this seems familiar, that’s probably because you know about game called Greece-o-rama. The rules are simple. The politicians buy votes by expanding the number of people who live off the government. In some cases, they’re bureaucrats administering programs. In some cases, they’re the folks getting handouts.

But they’re both part of the same crowd if you divide society into those riding in the wagon and those pulling the wagon – as this cartoon aptly demonstrates.

Speaking of cartoons, here’s one that mocks Obama by linking the poor jobs situation with his decision to block the Keystone pipeline.

Last but not least, this is a good opportunity to share the video from last year showing how the so-called War on Poverty has created a dependency trap. The chart at 3:15 is a stunningly powerful powerful piece of evidence.

This system is good for bureaucrats (Walter Williams calls them Poverty Pimps) and good for politicians, but it’s been bad news for poor people.

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Obama Administration Supports Rogue IRS Regulation in Order to Please Europeans, even though It Will Undermine American Banks and Hurt the U.S. Economy

I’ve written several times about a proposed IRS regulation that would force American banks to put foreign law above U.S. law. I’ve repeatedly warned that the scheme, which would force financial institutions to report the deposit interest they pay to foreigners, is bad economic policy, bad regulatory policy, and bad banking policy.

My arguments have included:

• Explaining that this onerous regulatory scheme will result in capital fleeing to other nations, needlessly harming the financial sector and putting American banks at risk.
• Explaining why the proposal is a threat to human rights since many foreigners keep money in the United States because they live in nations with unstable and/or repressive governments.
• Explaining that the IRS action is a gross abuse of the regulatory process since an executive branch agency does not have the authority to overturn laws enacted as part of the democratic process.
• Explaining that this proposed regulation is just the beginning, and that proponents hope to issue follow-up rules that would cripple policies making America a haven for global capital.

But these points don’t seem to matter to the Obama Administration, which is ideologically committed to the anti-tax competition agenda of Europe’s welfare states. This is why the White House supports all sorts of destructive policies, including not only this misguided regulation, but also the creation of something akin to a world tax organization that will have power to block free-market tax policy.

A new article in the Weekly Standard explains what’s at stake.

Early last year the Treasury Department published its “Guidance on Reporting Interest Paid to Nonresident Aliens,” which would require banks to report to the Internal Revenue Service the interest paid to foreign depositors with a U.S. bank account. While the Treasury and the regulatory apparatus insist that the cost and inconvenience of adhering to this regulation is next to nothing, the rule may cost the U.S. banking system hundreds of billions of dollars in lost deposits, in turn costing our economy billions of dollars, while providing no discernible benefit to banks, depositors, taxpayers, or the U.S. economy. …a much bigger problem—for banks and the economy—than the compliance costs is the threat of a massive capital flight. The United States is a very popular place for foreigners to park their savings, for a variety of reasons. For starters, we offer a stable government that can be trusted to keep its hands off deposits—something that appeals greatly to residents of Venezuela, Argentina, Ecuador, and any number of other unstable countries. …As a result, a staggeringly large amount of savings from abroad is currently held in U.S banks. While the Treasury asserts that “deposits held by nonresident alien individuals are a very small percentage of the [total] deposits held by U.S. financial institutions,” that very small percentage amounts to more than $3.7 trillion, according to a 2011 Bureau of Economic Analysis report, hardly a pittance. The massive amount of foreign savings here is a boon to the U.S. economy. Banks lend against these deposits, mainly to companies here in the United States. Jay Cochran, an economist at George Mason University, studied the impact that the more limited 2002 reporting requirements would have had on the banking system, estimating that it would have resulted in nearly $100 billion in deposits leaving the U.S. banking system. A reporting regulation that covers all foreign accounts would likely result in two to three times more capital flight. The impact would be harmful not just for the banks but for the broader economy. The decline in profits in the banking sector alone from a roughly quarter-trillion-dollar capital flight would be in the range of $5-10 billion—which makes a mockery of the notion that the costs of the regulation are under $100,000.

For more information about this wretched proposal, here’s a video I narrated on the topic.

To put it bluntly, the Obama Administration is pushing this regulation because it thinks the anti-tax competition agenda of Europe’s welfare states is so important that it is willing to risk the health of the American economy, undermine the soundness of U.S. financial institutions, disregard the rule of law, and abuse the regulatory process.

Indeed, this proposal is even worse than the increasingly infamous Foreign Account Tax Compliance Act.

And that’s saying something, because with each passing day, it is more and more obvious that FATCA is a destructive law that will significantly harm the American economy. But at least it’s a law, one that was approved by Congress and signed by the President. And the costly FATCA regulations being developed by the IRS are for the purpose of enforcing the law.

The interest-reporting IRS regulation is also costly and destructive, to be sure, but what makes it so perverse is that it is – at best – completely gratuitous. It is being advanced solely for reasons of ideology, regardless of the law and consequences be damned.

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California’s Top-One-Percent Bureaucrats

Every so often (about 362 days per year), I come to the conclusion that government is a racket for the benefit of special interests.

Greece  would be an example. And if we limit ourselves to the United States, California is probably the poster child for a kleptocracy masquerading as a government.

Here are some absurd details, from a Bloomberg report, about bureaucrats ripping off taxpayers.

Manglicmot is one of 42 state nurses who each made more than $1 million in those six years, mostly by tapping overtime, according to payroll data compiled by Bloomberg News. Together, those nurses collected $47.5 million. In 2008, Manglicmot was paid $331,346, including $211,257 in overtime. The extra pay that allows some nurses to triple their regular compensation underscores a broader trend in California, where government workers are paid more than in other states for similar duties and civil-service job protections hamper efforts to close budget gaps. Governor Jerry Brown said this week that revenue will fall short of expectations, triggering $1 billion in cuts to school busing, libraries and care for children, the elderly and the disabled, among other programs. “California taxpayers should be outraged,” said Lanny Ebenstein, an economics lecturer at the University of California at Santa Barbara and president of the California Center for Public Policy, a research institution critical of public-sector compensation. …California is home to city managers whose compensation is higher than the governor’s, prison doctors who make more than counterparts elsewhere, Los Angeles firefighters who collect twice the national mean and state workers who reaped $1.7 billion more than their regular salaries last year, from overtime and unused vacation pay to physical-fitness incentives.

I can only imagine how horrible it would feel to be a California taxpayer, particularly since the story just cited is merely the tip of the iceberg.

This video from Reason TV is a good explanation of how bloated bureaucracy has helped to cause a deteriorating situation in the Golden State.

And here’s my video on the overall topic of overpaid bureaucrats.

Last but not least, don’t forget the video from the folks at Government Gone Wild.

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