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Posts Tagged ‘Bureaucrats’

As a supporter of genuine capitalism, which means the right of contract and the absence of coercion, I don’t think there should be any policies that help or hinder unions.

The government should simply be a neutral referee that enforces contracts and upholds the rule of law.

Similarly, I also don’t have any philosophical objection to employers and employees agreeing to “defined benefit” pension plans, which basically promise workers a pre-determined amount of money after they retire based on factors such as average pay and years in the workforce.

After all, my money and property aren’t involved, so it’s not my business.

That being said, these so-called “DB plans” have a bad habit of going bankrupt. And that means the rest of us may get stuck with the bill if there’s a taxpayer bailout.

I discuss these issues in an interview with Fox Business News.

My main point is that there’s a deep hole in many of these plans, so someone is going to feel some pain.

I don’t want taxpayers to be hit, and I also don’t think well-managed pensions should be gouged with ever-rising premiums simply because other plans are faltering.

But I bet both will suffer, as will workers and retirees in the under-funded plans.

As part of the interview, I also warned that other “DB plans” are ticking time bombs. More specifically, most pensions for state and local bureaucrats involve (overly generous) pre-determined commitments and very rarely have governments set aside the amount of money needed to fund those promises.

And the biggest DB time bomb is Social Security, which has an unfunded cash-flow liability of more than $30 trillion. That’s a lot of money even by Washington standards.

But I closed with a bit of good news.

As workers and employers have learned that DB plans tend to be unstable and unsustainable, there has been a marked shift toward “defined contribution” plans such as IRAs and 401(k)s.

These plans are the private property of workers, so there’s no risk that the money will be stolen or squandered.

But even this good news comes with a caveat. We closed the interview by fretting about the possibility that governments will steal (or at least over-tax) these private pension assets at some point in the future.

That’s already happened in Argentina and Poland, so I’m not just being a paranoid libertarian.

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The headline of this post might not be completely honest. Indeed, if you asked me to grade the accuracy of my title, I’ll admit right away that it falls into the “if you like your plan, you can keep your plan” category of mendacity.

Krugman WeatherBut I’m only prevaricating to set the stage for some satire about Keynesian economics.

But this satire is based on a very bizarre reality. Advocates of Keynesian economics such as Paul Krugman have claimed that war is stimulus for the economy and that it would be good if we were threatened by an alien invasion. As such, it doesn’t take too much imagination to think that conversations like this may have taken place inside the Obama White House.

Particularly since Keynes himself thought it would be good for growth if the government buried money in the ground.

So enjoy this satire from The Onion.

By the way, Krugman also said the 9-11 terrorist attacks would “do some economic good.”

So the folks at The Onion need to step it up if they want to keep pace.

Now let’s share a serious video.

I’ve written before about how the Food and Drug Administration’s risk-averse policies lead to needless deaths.

Econstories builds upon that hypothesis, using the Dallas Buyers Club to make excellent points about why markets are better than command-and-control regulation.

Very similar to what Steve Chapman wrote about bureaucracy, competency, and incentives.

By the way, the bureaucrats at the FDA also have engaged in pointless harassment of genetic testing companies, even though nobody claims there is even the tiniest shred of risk to health and safety.

And nobody will be surprised about the bureaucracy’s anti-smoking jihad.

But nothing exemplifies brainless bureaucracy more than the raid by the FDA’s milk police. Though the FDA’s strange condom regulations might be even more bizarre.

It’s hard to decide when bureaucracies do so many foolish things.

P.S. The prize for the craziest bit of red tape still belongs to Japan, where the government actually regulates providers of coffee enemas, though the Department of Agriculture’s rules for magic rabbits is a close competitor.

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There’s an old joke that a quandary exists when your mother-in-law drives off a cliff in your new Porsche. Are you more happy about losing her or more unhappy about losing your sports car?

I’m not clever enough to come up with humorous quandaries, but I have shared policy quandaries.

I’ve asked, for instance, whether libertarians might have second thoughts about an end to drug prohibition if the result was bigger government.

And I speculated whether leftists or social conservatives would be more upset about a gay man legally adopting his lover in order to minimize Pennsylvania’s death tax.

And if you like this kind of thing, I have more than one dozen additional examples of these types of quandaries.

I have something else to add to the list, and it’s near and dear to my heart because I like to think that I’m among the biggest critics of both Obamacare and bureaucracy.

But what happens if there’s an issue pitting Obamacare and bureaucrats against each other? Would I be able to pick sides?

This isn’t theoretical speculation. Check out these excerpts from a recent report in the New York Times.

Cities, counties, public schools and community colleges around the country have limited or reduced the work hours of part-time employees to avoid having to provide them with health insurance under the Affordable Care Act, state and local officials say. …Even after the administration said this month that it would ease coverage requirements for larger employers, public employers generally said they were keeping the restrictions on work hours because their obligation to provide health insurance, starting in 2015, would be based on hours worked by employees this year. Among those whose hours have been restricted in recent months are police dispatchers, prison guards, substitute teachers, bus drivers, athletic coaches, school custodians, cafeteria workers and part-time professors.

To be honest, I don’t know how to react to this.

Am I glad that we have more evidence that Obamacare is hurting people and reducing labor supply?

That’s obviously the case, and it’s an embarrassment to the Obama Administration.

For months, Obama administration officials have played down reports that employers were limiting workers’ hours. But in a report this month, the Congressional Budget Office said the Affordable Care Act could lead to a reduction in the number of hours worked, relative to what would otherwise occur. Jason Furman, the chairman of the president’s Council of Economic Advisers, reaffirmed the White House view that the law was “good for wages and incomes and for the economy over all.” …The Obama administration says “there is absolutely no evidence” of any job loss related to the Affordable Care Act.

One suspects, by the way, that the Obama White House must have a very strange definition of “job loss.”

They’ll only confess culpability, one imagines, if Obama personally delivers the pink slip or HHS Secretary Sebilius personally orders the loss of hours.

But let’s get back to our main point. I was wondering whether I should be happy to have this additional evidence against Obamacare.

But perhaps I should be glad instead that local governments are squeezing the hours and benefits of the bureaucracy, particularly since the alternative would be higher taxes.

Check out these passages from the NYT’s story. Isn’t it wonderful to read about sulking bureaucrats?

William J. Lipkin, an adjunct professor of American history and political science at Union County College in Cranford, N.J., said: “The Affordable Care Act, rather than making health care affordable for adjunct faculty members, is making it more unaffordable. Colleges are not giving us access to health care, and our hours are being cut, which means our income is being cut. We are losing on both ends.” The American Federation of Teachers lists on its website three dozen public colleges and universities in 15 states that it says have restricted the work assignments of adjunct or part-time faculty members to avoid the cost of providing health insurance.

Some people love the smell of napalm in the morning. Not me. I prefer the whining of angry and resentful bureaucrats. Maybe (as I’ve suggested before) Obamacare isn’t all bad after all.

But 98 percent bad is still bad. The law is a trainwreck and needs to be repealed.

P.S. On another topic, is anyone surprised that the IRS doesn’t like obeying the laws it enforces against the rest of us.

Treasury’s inspector general for tax administration found that the expenses for nine IRS executives — out of 31 whose travel was examined — were wrongly deemed to be nontaxable, on average reimbursements of $51,420. Those executives traveled an average of 140.5 days combined in fiscal 2011 and 2012, the two years examined by the inspector general. The IRS had at least 350 executives in each of those years, meaning the inspector general report covers just a fraction of the agency’s top officials.

Maybe we should save the IRS bureaucrats from potential legal trouble by scrapping the internal revenue code and replacing it with a simple and fair flat tax.

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I don’t like government bureaucrats.

Actually, let me re-phrase that statement. I know lots of people who work for different agencies in Washington and most of them seem like decent people.

So maybe what I really want to say is that I’m not a big fan of government bureaucracies and the results they generate. Why?

Because a bloated government means overpaid bureaucrats, both at the federal level and state level (and in other nations as well).

Because inefficient bureaucracies enable loafing and bad work habits.

Because being part of the government workforce even encourages laziness!

And it may even be the case that government bureaucracies attract dishonest people. A story in the L.A. Times reveals that there’s a correlation between cheating and a desire to work for the government.

Here are some excerpts.

College students who cheated on a simple task were more likely to want government jobs, researchers from Harvard University and the University of Pennsylvania found in a study of hundreds of students in Bangalore, India. Their results, recently released as a working paper by the National Bureau of Economic Research, suggest that one of the contributing forces behind government corruption could be who gets into government work in the first place. …Researchers ran a series of experiments with more than 600 students finishing up college in India. In one task, students had to privately roll a die and report what number they got. The higher the number, the more they would get paid. Each student rolled the die 42 times. …Cheating seemed to be rampant: More than a third of students had scores that fell in the top 1% of the predicted distribution, researchers found. Students who apparently cheated were 6.3% more likely to say they wanted to work in government, the researchers found.

I’m not surprised. Just as the wrong type of people often are attracted to politics, we shouldn’t be surprised to learn that less-than-admirable folks sometimes are attracted to jobs in the bureaucracy.

But I don’t want to draw too many conclusions from this research.

The study looked at people in India and that nation’s government is infamous for rampant corruption.

However, if you look at how America scores in that regard (corruption measures are included in both Economic Freedom of the World and the Index of Economic Freedom), the problem is much less severe.

So even though I’m willing to believe that bureaucrats in America are more prone to bad habits than their private-sector counterparts, I don’t think many of them decide to get government jobs in the expectation that they can extract bribes.

Indeed, I would guess that the average American bureaucrat is far more honest than the average American politician.

That’s damning with faint praise, I realize, but it underscores an important point that the real problem is big government. That’s what enables massive corruption in Washington.

P.S. Switching gears, I’ve written a couple of times about the intrusive and destructive Foreign Account Tax Compliance Act. Well, we have some good news on that front. The Republican National Committee has endorsed the law’s repeal. I don’t want to pretend that’s a momentous development and I even told Reuters that the GOP may only be taking this step for narrow political reasons.

Daniel Mitchell, a senior fellow at the Cato Institute, a libertarian think tank, said: “It’s hard to imagine an issue this obscure playing a visible role in elections … It is making overseas Americans far more sympathetic to (Republicans) and could have an impact on fundraising.”

That being said, I’m more than happy when politicians happen to do the right thing simply because it’s in their self interest. And if we can eventually undo FATCA and enable more tax competition, that’s good news for America and the rest of the world.

P.P.S. And here’s another positive update on a topic we’ve examined before. Governor Rick Perry of Texas has joined a growing list of people who are having second thoughts about the War on Drugs. Here’s an excerpt from a report in the Washington Post.

Texas Gov. Rick Perry (R) on Thursday voiced support for softening penalties for marijuana use, and touted his work moving in the direction of decriminalization. “After 40 years of the war on drugs, I can’t change what happened in the past. What I can do as the governor of the second largest state in the nation is to implement policies that start us toward a decriminalization and keeps people from going to prison and destroying their lives, and that’s what we’ve done over the last decade,” Perry said, according to the Austin American-Statesman.

He joins a growing list of people – such as John Stossel, Gary Johnson, John McCainMona Charen, Pat Robertson, Cory Booker, and Richard Bransonwho are recognizing that it’s foolish to give government massive amounts of power and money simply to stop people from doing dumb things to themselves.

But maybe you disagree with all those people and would rather be on the same side as Hillary Clinton.

And make life easier for the folks in this cartoon.

P.P.P.S. I’ve written before about how leftists always criticize so-called tax havens, even though rich statists are among the biggest beneficiaries of these low-tax jurisdictions.

President Obama, for instance, has been so critical of tax havens that he’s been caught making utterly dishonest statements on the topic.

But I guess the President’s opposition to tax competition is less important than his desire to prop up Obamacare. Look at some of what’s been reported by Bloomberg.

…the job of taking over construction of HealthCare.gov, which failed miserably when it debuted in October, is going to Accenture Plc, which switched its place of incorporation in 2009 to Ireland from Bermuda. …Accenture has endured so much criticism over the years for its use of tax havens that it even has a disclosure in its annual report warning investors to expect as much. …Accenture’s roots date back to a once-iconic American business, which helps explain why it’s gotten a lot of heat for incorporating in tax havens since spinning off.

By the way, it makes sense for Accenture to be domiciled in Bermuda rather than the United States.

P.P.P.P.S. On a personal note, I’m down in Florida for my first softball tournament of the year and I’m happy to report that I managed to put one over the fence.

Tampa HRHitting home runs has become a distressingly infrequent event as I’ve gotten older (I’m playing in a tourney for the 55-and-up crowd), and I like to memorialize it when it happens just in case it’s the last time.

So forgive me if I engage in Walter Mitty-style fantasizing. Maybe, just maybe, the Yankees will call with a contract offer.

Wait, who am I kidding?!?

That’s even less likely than Obamacare succeeding. Or politicians surrendering some of their power by enacting a flat tax.

I’m doomed to be a policy wonk for the rest of my life.

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Last year, while writing about the sleazy and self-serving behavior at the IRS, I came up with a Theorem that explains day-to-day behavior in Washington.

It might not be as pithy as Mitchell’s Law, and it doesn’t contain an important policy prescription like Mitchell’s Golden Rule, but it could be the motto of the federal government.

Simply stated, government is a racket that benefits the DC political elite by taking money from average people in America

I realize this is an unhappy topic to be discussing during the Christmas season, but the American people need to realize that they are being raped and pillaged by the corrupt insiders that control Washington and live fat and easy lives at our expense.

If you don’t believe me, check out this map showing that 10 of the 15 richest counties in America are the ones surrounding our nation’s imperial capital.

Who would have guessed that the wages of sin are so high?

But even though the District of Columbia isn’t on the list, that doesn’t mean the people actually living in the capital are suffering.

Here are some interesting nuggets from a report in the Washington Business Journal.

D.C. residents are enjoying a personal income boom. The District’s total personal income in 2012 was $47.28 billion, or $74,733 for each of its 632,323 residents, according to the Office of the Chief Financial Officer’s Economic and Revenue Trends report for November. The U.S. average per capita personal income was $43,725.

Why is income so much higher? Well, the lobbyists, politicians, bureaucrats, interest groups, contractors, and other insiders who dominate DC get much higher wages than people elsewhere in the country.

And they get far higher fringe benefits.

In terms of pure wages, D.C., on a per capita basis, was 79 percent higher than the national average in 2012 — $36,974 to $20,656. …Employee benefits were 102 percent higher in D.C. than the U.S. average in 2012, $7,514 to $3,710. Proprietor’s income, 137 percent higher — $9,275 to $3,906. …The numbers suggest D.C. residents are living the high life.

Now let’s share a chart from Zero Hedge. It uses median household income rather than total personal income, so the numbers don’t match up, but what’s noteworthy is how DC income grew faster than the rest of the nation during the Bush years and then even more dramatically diverged from the rest of the country during the Obama years.

In other words, policies like TARP, the fake stimulus, and Obamacare have been very good for Washington’s ruling class.

Want some other concrete examples of profitable Washington sleaze? Well, here are some excerpts from Rich Tucker’s column for Real Clear Policy.

The real place to park your money is in Washington, D.C. That’s because the way to get ahead isn’t to work hard or make things; it’s to lobby Washington for special privileges. Look no further than the sweet deal the sugar industry gets. It’s spent about $50 million on federal campaign donations over the last five years. So that would average out to $10 million per year. Last year alone, the federal government spent $278 million on direct expenditures to sugar companies. That’s a great return on investment.

Big Corn may get an even better deal than Big Sugar.

Then there’s ethanol policy. Until 2012, the federal government provided generous tax credits to refiners that blended ethanol into gasoline. In 2011 alone, Washington spent $6 billion on this credit. The federal government also maintains tariffs (54 cents per gallon) to keep out foreign ethanol,and it mandates that tens of billions of gallons of ethanol be blended into the American gasoline supply. Nothing like a federal mandate to create demand for your product. How much would you pay for billions of dollars worth of largesse? Well, the ethanol industry got a steep discount. In 2012, opensecrets.org says, the American Coalition for Ethanol spent $212,216 on lobbying.

Rich warns that the United States is sliding in the wrong direction.

What makes Washington especially profitable is that its only products are the laws, rules, and regulations that it has the power to force everyone else to follow. …we seem to be sliding toward what the authors term “extractive” institutions. That means government using its power to benefit a handful of influential individuals at the expense of everyone else.

And let’s not forget that some people are getting very rich from Obamacare while the rest of us lose our insurance or pay higher prices.

This Reason TV interview with Andrew Ferguson explains that there is a huge shadow workforce of contractors, consultants, and lobbyists who have their snouts buried deeply in the public trough.

I particularly like his common sense explanation that Washington’s wealth comes at the expense of everyone else. The politicians seize our money at the point of a gun (or simply print more of it) to finance an opulent imperial city.

So if you’re having a hard time making ends meet, remember that you should blame the parasite class in Washington.

P.S. The insider corruption of Washington is a bipartisan problem. Indeed, some of the sleaziest people in DC are Republicans.

P.P.S. Though scandals such as Solyndra show that Obama certainly knows how to play the game.

P.P.P.S. Making government smaller is the only way to reduce the Washington problem of corrupt fat cats.

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Look, up in the sky! It’s a bird, it’s a plane…no it’s Super Bureaucrat!

Actually, look to New Jersey, because you’re going to see a taxpayer ripoff that will get your blood boiling. Depending on your perspective, this may be worse that the toll collector on the New Jersey Turnpike who pocketed more than $300,000 in a single year.

Because today’s super bureaucrat isn’t getting overpaid for one job. He’s getting overpaid for six jobs!

Here are some excerpts from a local news report in New Jersey (h/t: Reason).

Patrick DeBlasio was hired Wednesday as Highlands’ chief financial officer — his sixth concurrent public job and ranking him among the highest-paid public employees in New Jersey. Highlands will pay DeBlasio a $40,000 annual salary on a part-time basis… DeBlasio will not have to work a minimum number of hours, said Administrator Tim Hill, or be required to go into the office.

Maybe one day I can get one of these $40,000 no-show jobs that don’t require any work. But I don’t know if I could juggle several of them, and this is what makes DeBlasio special.

DeBlasio has a full-time job as Carteret’s CFO and part-time gigs in Keansburg, North Plainfield and the Carteret School District, the report said. He is also currently Highland’s tax collector.

It’s rather convenient that he also serves as a tax collector since it takes a lot of money to finance all his government salaries.

In 2012, DeBlasio’s annual compensation totaled $244,606, more than Gov. Chris Christie or state Treasurer Andrew P. Sidamon-Eristoff, who earn $175,000 and $141,000, respectively.

As the old saying goes, nice work if you can get it.

Maybe it’s time to start a Bureaucrat Hall of Fame, sort of like our Moocher Hall of Fame. In addition to Mr. DeBlasio (and the toll collector mentioned above), charter members could include the following.

When you read these stories, it’s easy to understand why so many states are in fiscal trouble.

And it also makes sense that state and local bureaucrats are far less likely to quit their jobs than folks in the productive sector of the economy. After all, how many people leave positions when they’re being overpaid?

But don’t forget that federal bureaucrats enjoy an even bigger pay advantage over private sector workers. Indeed, my Cato colleague Chris Edwards reports that they get twice as much average compensation as the serfs in the productive sector of the economy who pay their bills.

This video has the unhappy details.

P.S. Super Bureaucrat joins a list of other “super heroes,” including Government Man, and also two caped crusaders inspired by President Obama. Thanks to Michael Ramirez, we have “Stupor Man.” And there’s also Super-President-Constitutional-Law-Professor.

P.P.S. Is there some hidden strand of DNA that causes people named de Blasio to be burdens to taxpayers?

P.P.P.S. Shifting gears, remember our story about ten days ago featuring the little kid who was suspended from school for firing an imaginary bow and arrow? Well, we have another example showing that government schools could be considered a form of child abuse.

A 5-year-old boy was reportedly suspended from school after making a gun gesture with his hand on the playground. His father, David Hendrix, was furious when he found out his son was issued a suspension for the gesture. “He was playing army on the playground,” Hendrix told WBTV.

Yet another argument for school choice.

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One of my first blog posts, way back in 2009, was about bureaucrats from the Social Security Administration squandering more than $700,000 on a boondoggle conference at a fancy Arizona resort.

To pick a more recent example, taxpayers have plenty of reasons to be upset about IRS bureaucrats partying at their fancy conferences (including line dances, the real message of which is captured by this Lisa Benson cartoon).

The General Services Administration, meanwhile, had a good time on our dime at a posh confab in Las Vegas.

So did revelations about all this waste cause programs, agencies, and departments to be more careful with our tax money? As you can imagine, the answer is a big fat no.

The latest scandal to be unearthed is that “public servants” from a bunch of government agencies have been enjoying fun times in the Caribbean. Here are some excerpts from a Washington Times expose.

A group of federal officials skipped chilly Washington this month for a taxpayer-funded trip to the Virgin Islands in the name of protecting the world’s coral reef. The organizer, the U.S. Coral Reef Task Force, isn’t saying much about the total cost or reasons for the trip or why officials chose the St. Croix beachfront resort Buccaneer Hotel (made famous by an episode of TV’s “The Bachelor”) as their destination. But life couldn’t have been too bad for the G-men and G-women at the swanky resort, which is surrounded by a lush green golf course and boasts rooms with rates that begin at $323 a night. …topped off with a $74 meal per diem. …In addition to the room rates and food per diems, the various departments were also responsible for providing airfare for attendees. A quick search of travel websites shows that flights from Washington to St. Croix, where the meeting was held, range from $500 to $1,000.

So what was the total cost of this boondoggle? Well, we have no idea.

And this doesn’t even count the fact that many of the bureaucrats got to party at another sun-and-fun conference!

With 11 agencies involved in funding and support for the coral reef task force, it can be difficult to track down just how much is being spent and by whom. Spending records are spread across multiple agencies, with no single record of just how much these meeting might be costing taxpayers. An Interior Department representative said the task force meeting was held in conjunction with a meeting of the Caribbean Regional Planning Body, and many people participated in both.

So let’s think about big picture of what this means for taxpayers.

We know bureaucrats are overpaid.

We know they work fewer hours.

We even know bureaucrats admit to being lazy!

But the real insult to injury is when they get to do fun things at our expense.

Antigua

“If you outlaw cannons, only outlaws will have cannons”

P.S. By coincidence, I happen to be in Antigua while doing this post. I’m a big fan of the Caribbean, so it doesn’t bother me for people to go where there is warm sunshine. I just don’t want them taking trips at my expense.

P.P.S. I’m happy to report that I wasn’t detained at the airport, which happened on my last trip to Antigua.

P.P.P.S. My friend has a real (but non-operable) cannon mounted on one of his terraces. I think I read someplace that it’s legal to own a cannon in the United States, which is part of what makes America a great country. Heck, we’re allowed to own tanks, which is even cooler.

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Regular readers know I complain about the army of overpaid bureaucrats in Washington, but that’s just the tip of the iceberg.

The larger problem is that Washington also is filled with hundreds of thousands of other people who get rich thanks to big government. And these politicians, lobbyists, crony capitalists, interest groups, contractors, and influence peddlers almost surely are a bigger net drain on the economy’s productive sector.

When you combine the official bureaucracy with these other over-compensated beneficiaries of big government, it’s easy to understand why Washington, DC, is now the richest region of America, with 10 of the nation’s 15 richest counties.

Reuters did an expose last year on how Washington fat cats are living on Easy Street at our expense, and The Economist also has touched on the issue. But you know the problem has reached epidemic levels when even the local left-wing paper covers the story.

And that’s exactly what is happening. The Washington Post reports on how coerced access to other people’s money has meant boom times for the beltway elite. Here are some excerpts on how your money is creating unearned riches for DC insiders.

The avalanche of cash that made Washington rich in the last decade has transformed the culture of a once staid capital and created a new wave of well-heeled insiders.Wash Post Capital Wealth The winners in the new Washington are not just the former senators, party consiglieri and four-star generals who have always profited from their connections. Now they are also the former bureaucrats, accountants and staff officers for whom unimagined riches are suddenly possible. …They are the lawyers, lobbyists and executives who work for companies that barely had a presence in Washington before the boom.

Here are some depressing stats from the story.

During the past decade, the region added 21,000 households in the nation’s top 1 percent. No other metro area came close. …in 2010, companies based in Rep. James P. Moran’s congressional district in Northern Virginia reaped $43 billion in federal contracts — roughly as much as the state of Texas. At the same time, big companies realized that a few million spent shaping legislation could produce windfall profits. They nearly doubled the cash they poured into the capital. …Essentially, Washington has been the beneficiary of a ­decade-long, taxpayer-funded stimulus package.

Unfortunately, all this federal largesse is corrupting the business community, with many companies deciding that lobbying for tax dollars is more lucrative than competing for consumer dollars.

The federal government wasn’t the only one pouring buckets of new money into Washington in the 2000s. Big business did it, too. At a time when promising investments were hard to find, corporate America learned that lobbying was one of the most surefire ways of bolstering its bottom line. …Companies spent about $3.5 billion annually on lobbying at the end of the last decade, a nearly 90 percent increase from 1999 after adjusting for inflation… Legal services also boomed, fueled by the growing complexities of federal business regulations. The number of lawyers in the D.C. metro area increased by a third from 2000 to 2012, nearly twice as fast as the growth rate nationwide. And those lawyers have the highest mean salaries in the country, according to George Mason University’s Center for Regional Analysis.

Lobbying isn’t automatically a bad thing, by the way. Sometimes a company needs representation so that the political vultures in Washington don’t descend upon them.

“You know that if a company stopped lobbying, it would get creamed,” Drutman said. “That’s why companies don’t stop lobbying.”

The real moral of the story is that small government and genuinely free markets are the only effective ways to reduce sordid lobbying and political corruption.

The challenge, needless to say, is convincing the Washington establishment to adopt those policies. That’s not an easy task, particularly when it violates my First Theorem of Government.

P.S. Here’s a great video from Reason about Washington’s parasite economy.

P.P.S. Here’s an example of how Obamacare has lined the pockets of some DC insiders.

P.P.P.S. And here are some grating details about how the President is part of the problem.

P.P.P.P.S. You can enjoy some government corruption humor here, here, here, here, and (my personal creation) here.

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It’s no secret that I think we have too many government bureaucrats and I’ve shared very strong evidence that most of them are grossly overpaid.

I also have shown some data suggesting that they don’t work very hard, though I confess to mixed feelings about that factoid since I’d rather have some bureaucrats goofing off all day. After all, the economy would be even more burdened if they were being zealous and harassing additional people in the economy’s productive sector.

As an economist, one of my broad concerns is that taxpayers are picking up the tab for bloated bureaucracy. But I’m also worried for another big reason. We get less prosperity when too many people are being lured into government jobs. Simply stated, those people could be contributing to economic output if they instead were employed in the private sector.

In other words, our living standards depend on how productively we utilize labor and capital.

But we need to be careful about how we define “private sector.”

Why? Because not all private jobs are created equal. There are millions of government contractors, for instance, and many of those people should be considered part of a “shadow bureaucracy.” Too often, they’re doing things that are just as wasteful and inefficient as their bureaucrat counterparts, but they don’t show up in the Labor Department data as part of the government workforce.

Another example of the wrong kind of private employment is the so-called compliance sector.

Here are some excerpts from a report in The Hill about “compliance officers” hired by private companies.

A growing thicket of federal regulations under the Obama administration has contributed to an employment spike in at least one corner of the job market: the increasingly vital compliance industry.  ObamaCare, the Dodd-Frank Act and other large federal undertakings have led to an outpouring of new agency rules derided by business groups and defended by advocates.  But the regulations have also been a boon for professional compliance officers paid to help companies understand and adapt to the new requirements.  …Data kept by the Bureau of Labor Statistics (BLS) shows an 18-percent increase in the number of compliance officers in the United States between 2009 and 2012.

The article continues, including data showing that the compliance sector is getting bigger, costing lots of money, and that the problem began before Obama took office.

At last count, there were an estimated 227,500 compliance officers employed in the United States, according to the BLS. The bureau defines a compliance officer as an employee responsible for evaluating conformity with laws and regulations. …Compliance officers make an average of just under $65,000 annually, a gross national labor cost of roughly $14.7 billion, according to the BLS data. …for small firms without the resources to hire their own full-time compliance staff, adapting to new regulations can be an expensive proposition, said Sam Batkins, director of regulatory policy for AAF. …The expansion of the compliance industry did not begin under President Obama and is not solely linked to the healthcare and Wall Street reform bills. The AAF analysis found a 122-percent increase of compliance officers over the past 10 years.

Gee, maybe we can get to the point where our entire economy is nothing but government bureaucrats and compliance officers. With enough of both categories, we could have full employment!

Of course, there would be one tiny little problem since nothing would get produced. And with nobody generating any income, there wouldn’t be any money to pay for the paper pushers from both government and the private sector.

But as we’ve seen from nations such as Greece, politicians generally don’t grasp this simple point until it’s too late.

Though let’s give a shout out to the former left-wing President of Brazil, who irritated his socialist supporters by making a seemingly elementary observation that you have to have production before you can have redistribution. Heck, even rock stars are beginning to realize that capitalism is the right approach if you want better lives for the less fortunate.

So maybe there’s hope.

Let’s close by issuing a couple of important caveats. Notwithstanding my occasionally overheated rhetoric, not all government jobs are bad jobs. Similarly, I don’t want to imply that all compliance jobs in the private sector are wasteful and inefficient.

To be more specific, I mean those statements in the narrow sense that companies doubtlessly are trying to adapt to all the new regulatory burdens in the least costly manner possible. So the jobs they are creating make sense, given the reality that firms are being buried under a blizzard of red tape.

But I also mean it in the broad sense that there are some regulations that pass a cost-benefit test, and compliance officers resulting from those regulations presumably are part of such calculations. Even a cranky libertarian like me, for instance, won’t lose sleep about compliance officers in a nuclear power plant or at a medical lab doing research on the Ebola virus.*

*But allow me to point out that a genuinely free market would have something akin to compliance officers because of “private regulation.” As I explained last year, “the profit motive creates mutually reinforcing oversight,” and we can be quite confident that market forces would do a better job of protecting us at lower cost.

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The only sustainable way of achieving more prosperity and higher living standards is to increase the quality and quantity of labor and capital in the economy.

This may sound like boring econo-speak, but labor and capital are the two “factors of production” and our ability to consume is limited by what we can produce.

That’s one of the reasons why it’s important to reduce the burden of government spending.

People sometimes assume it’s important to reduce the budget to lower the threat of tax hikes. That is a good reason to impose fiscal discipline, but it’s presumably even more important to restrain spending because we don’t want labor and capital being misallocated by fiscal policy.

A big public sector, after all, presumably means a large bureaucracy. And when you have lots of people employed by government, that means that they’re not working in the private sector. In other words, they’re consuming economic output rather than adding to economic output.*

Or, as these cartoons illustrate, they’re riding in the wagon rather than pulling the wagon.

This is why advocates of economic growth should strive to limit the amount of bureaucrats and how much they’re paid. The bad news is that the public sector is far too large in the United States, and that means (as explained in this video) we have too many over-compensated bureaucrats.

The good news, however, is that we’re not Denmark, which has the most expensive bureaucracy of all developed nations.

But it’s important to look at what’s happening Europe because BIS, OECD, and IMF data all show that we are going to become a European-style welfare state if nothing is done to reform our poorly designed entitlement programs.

That’s why a new study from the European Commission is worth a look. The report measures both the size of the bureaucracy and the degree to which bureaucrats are over-paid.

Here’s a chart from the study that shows the share of the workforce that was diverted to bureaucracy in both 2006 and 2010. I’m not sure I fully trust the numbers (I doubt, for instance, that France tripled its bureaucracy in just four years), and there’s an absurdly large amount of missing data for nations on the right side of the chart, but we at least can get a rough idea that about one-third of all worker have been sucked into the public sector.

EC Bureaucrats Share of Workforce

That’s certainly not very good news for economic output. And it explains in part why European tax burdens are so excessive.

But if you want to be further depressed, here’s another chart from the study showing the degree to which government bureaucrats are over-paid compared to workers with similar skills and experience in the private sector.

EC Bureaucrats Wage Premium

Looking at the data, there are some countries – such as Denmark, Finland, Estonia, and Slovakia – where bureaucrat pay is roughly comparable to private sector compensation.**

But there are other nations where bureaucrats are wildly over-compensated. And it’s no surprise that these are some of the nations that are facing fiscal crisis, including Cyprus, Spain, Italy, Greece, and Ireland.

And this is why Americans should pay close attention to this issue. My colleague at the Cato Institute, Chris Edwards, put together this chart showing that federal bureaucrats receive, on average, far more compensation than workers in the productive sector of the economy.

Federal Bureaucrat Compensation Premium

These numbers aren’t adjusted for education and experience, so they’re not directly comparable to the second chart in this post, but the data certainly suggest that federal bureaucrats are doing very well and that we could save a lot of money by freezing pay and benefits until the gap begins to narrow.

But what worries me is that politicians in Washington will make things worse, not better. Heck, just think of all the new over-paid IRS agents we’ll have to pay for just because of Obamacare!

*Some types of government spending, for core “public goods” such as maintenance of rule of law, create conditions that enable private output, so this is not an argument for zero bureaucrats. Instead, the key point is that government should be relatively small and staffed by people who are not being over-paid.

**Pay levels are an important indicator, and it’s good that some nations don’t pay bureaucrats more than workers in the productive sector of the economy. But keep in mind that bureaucrats are – by definition – being paid too much if they are part of departments, agencies, and programs that shouldn’t exist. Which reinforces the point about limiting the size of government.

P.S. I’ve criticized the European Commission for statism and I’ve mocked the two lead bureaucrats of the EC, but I should acknowledge that the international bureaucracy deserves some credit for producing a report that highlights overpaid government bureaucrats. And it was just a couple of months ago that one of the European Commissioners criticized France for excessive taxation. Maybe, just maybe, reality is forcing Europe’s political elite to wake up.

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I posted a video back in 2010 that used biting humor to complain about overpaid firefighters.

That video stirred a hornet’s nest, generating some spirited debate in the comments section. But there was no resolution, in part because you can’t make sweeping judgements when firefighter pay is determined locally.

Some firefighters may be underpaid and some almost certainly are overpaid.

And you can find a jaw-dropping example of the latter category in southern California.

Andrew Biggs at the American Enterprise Institute looks into a controversy about compensation levels for firefighters in Orange County and says the critics are wrong – but also right – about excessive pay and benefits for the firefighting bureaucracy.

UnionWatch.org reports that the average firefighter in Orange County, California pulls in total pay and benefits of $234,000 per year, making them among the best-paid public employees – and, for that matter, among the best-paid of any kind of employees – in the country. But is this true? No. But yes. UnionWatch relies on compensation data provided by Orange County itself, which appears to buttress their claims. Average salaries for firefighters top $91,000, on top of which they typically receive another $65,000 in overtime and other supplementary pay. Firefighters then receive an employer pension employer contribution of around $61,000 and health insurance benefits of about $15,000, for a total of over $234,000.

Here’s why UnionWatch.org is incorrect.

…why is this not right? Because in Orange County and most other cities and states, much of the employer’s pension contribution is to pay off unfunded liabilities from prior years, which is different from pension benefits earned by employees in the current year. Only the latter is truly compensation. The “normal cost” of Orange County Fire pension benefits accruing this year is about 23.49 percent of salaries, or around $37,685. So, average annual compensation would be around $23,000 less, so make that total compensation of about $211,000. Still not shabby, but less than the headline.

But it seems that the group also is right. Indeed, they understated the cost of employing a firefighter.

But here’s the bad news: total compensation is actually a lot higher than $211,000, and even higher than UnionWatch’s $234,000 figure. The reason is that Orange County calculates its pension contribution based on the assumption the plan’s investments will 7.75% investment returns every year. …If we assume a 4% interest rate – something above the riskless Treasury yield, but lower than the pensions’ own risky investment return – the normal cost of Orange County Fire pensions rises a lot – to about 75 percent of salaries. (…the Congressional Budget Office applied the same risk-adjustment in valuing pensions for federal government employees.) In other words, in an average year an Orange County firefighter accrues future pension benefits worth over $118,000. So total annual compensation for an average Orange County firefighter is somewhere in the neighborhood of $290,000 per year.

That’s a nice pile of cash. Not as good as the city manager in one California town who raked in more than $787,000 per year, but definitely not shabby.

But the real issue is whether $290,000 is too much or too little. Being a firefighter is a risky profession, after all, and higher compensation is an efficient way of compensating for danger. And I assume there are fitness requirements that restrict the pool of eligible applicants.

Unfortunately, the article doesn’t give us the information needed to specifically assess whether Orange County firefighters are overpaid.

For what it’s worth, though, I think the answer is yes. We have data from the Department of Labor showing that state and local government bureaucrats are far less likely to voluntarily leave their jobs compared to workers in the private sector.

That’s a very strong indication that they’re receiving above-market wages. And since firefighters are paid a lot more than the average state or local bureaucrat, we can make some educated assumptions about their relative compensation.

To put this issue in context, here’s a video I narrated from the Center for Freedom and Prosperity on the issue of bureaucratic compensation.

If I had to simplify this video into a couple of short messages, one of them would be that a lot of bureaucrats are grossly overpaid for the simple reason that their jobs shouldn’t exist. I’m sure there are some very nice and wonderfully conscientious people working at places such as the Department of Agriculture and the Department of Housing and Urban Development, but their jobs should be phased out as those departments are eliminated.

The other message is that we should use market indicators to determine compensation for government jobs that would still exist. Whether we’re talking about military pay at the federal level or compensation for cops at the local level, it makes sense to pay enough to get the right people but not so much that taxpayers are getting the short end of the stick.

In Orange County, California, taxpayers are left with a twig.

P.S. I already mentioned the fat-cat city manager from Bell, California. Here are some other bureaucrats who are living on Easy Street courtesy of taxpayers.

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I’ve shared some remarkable data showing that bureaucrats get paid more than people in the private sector.

JOLTS dataI’ve also dug into the Department of Labor’s JOLTS data to debunk those who argue bureaucrats aren’t overpaid.

I’ve even showed that they work fewer hours (though that’s probably a good thing since presumably the nation will be in better shape if bureaucrats are out of the office rather than molesting people in the economy’s productive sector).

Well, now we can add something else to the list, though it won’t surprise anybody who has been to the Post Office, DMV, or tried to generate any sort of action from a government agency. It turns out that bureaucrats are lazy. Here are some interesting excerpts from a National Post column from Canada.

Who says civil servants are lazy? Well, they do actually. The study that finds these effects is based on a social survey that asked people to agree or disagree, on a scale of one to seven, with the statement “I see myself as someone who tends to be lazy,” with the endpoint options being “Does not apply to me at all” and “Applies to me perfectly.” …the survey in question was for Germany for the years 2004-5. (The just-published analysis of its results has been done by Robert Dur and Robin Zoutenbier, economists at the Erasmus University Rotterdam.) …if there was a country where you’d think people would be ashamed to admitting to laziness, it’s probably Germany. So if the story holds there, it probably holds everywhere. …What results do the Rotterdam economists get? When they control for other things that are both correlated with self-declarations of…laziness and also differ systematically across sectors, such as age, gender, education, family status and so on, it does turn out that public-sector workers tend to be…more lazy than private-sector workers. A one-unit increase in self-declared laziness on that seven-unit scale increases the likelihood of a person’s being in the public sector by almost one per cent. …Turning the data around, the results suggest that workers who are…lazy have a probability of almost exactly one-third of working in the public sector. By contrast, workers who self-declare as…energetic have only about a one-fifth chance of ending up in the public sector.

Gee, knock me over with a feather. Lazy people are more likely to work for the government. And they even admit it!

However, it seems that there are some causation/correlation issues. It may be that you don’t work for the government because you’re lazy. Instead, working for the government may make you lazy.

When the researchers looked only at younger workers they found that…there was no difference in laziness. Only with people further along in their careers did the correlation between laziness and the public sector show up. Either it takes time for lazy people to find their public sector niche or naturally energetic people get worn down by the bureaucracy. They learn laziness.

As a taxpayer, I confess this causes me some mixed feelings. I’m irked that bureaucrats are getting lavishly compensated at my expense. And I don’t like the idea of them goofing off while playing Solitaire or updating their Facebook pages.

But then I remind myself that this may be the least-destructive way for them to occupy their time. Sure beats them being hard at work coming up with crazy new regulations.

In any event, this chart shows that American taxpayers at least can be thankful we’re not in Denmark.

Or any of the Nordic countries. I don’t know if bureaucrats in those nations are lazy, but they sure are expensive.

And I’m surprised that Japanese bureaucrats are relatively inexpensive, particularly when the nation’s long-run fiscal outlook is so bad.

P.S. Since we’re making fun of bureaucrats, here’s a good jab at the Post Office from Jimmy Kimmel. And to see how government operates, we have the Fable of the Ant. But this Pearls before Swine cartoon strip is my favorite.

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The bad news is that governments do a lot of things they shouldn’t do. The good news is that I never run out of material.

I’ve even created some sub-categories, such as my U.S. vs U.K. government stupidity contest and my great-moments-in-local-government series.

But I never thought I would have a special category about bureaucrats vs. Bambi.

1. Bureaucrats in Virginia filed three misdemeanor charges against a man for the horrible crime of rescuing a deer that was hit by a car.

2. Bureaucrats in Maryland fined two men $90 each for not having life jackets when they had the gall to rescue a deer that fell through some ice.

3. Bureaucrats in Indiana are threatening prison time for a family that rescued a baby deer from coyotes.

The paper pushers of the world seem to harbor a special grudge against these harmless ruminants, since we now have another story about a baby deer. But this time, Bambi was the victim, not the family.

Here are some of the unbelievable details from a local news report.

Two weeks ago, Schulze was working in the barn at the Society of St. Francis on the Kenosha-Illinois border when a swarm of squad cars arrived and officers unloaded with a search warrant. “(There were) nine DNR agents and four deputy sheriffs, and they were all armed to the teeth,” Schulze said. The focus of their search was a baby fawn brought there by an Illinois family worried she had been abandoned by her mother.

My first reaction when reading this was “what the @#$*?” Is he public sector really so bloated that 13 bureaucrats have nothing better to do than to serve a search warrant for a baby deer?

And why on earth were they heavily armed? Were they expecting Osama Bin Bambi?

But don’t answer yet, because it gets more absurd.

The Department of Natural Resources began investigating after two anonymous calls reporting a baby deer at the no-kill shelter. The warden drafted an affidavit for the search warrant, complete with aerial photos in which he described getting himself into a position where he was able to see the fawn going in and out of the barn.

I’m not sure what part of this excerpt gets me more upset, the fact that some snitch informed on the shelter for having a baby deer, or the fact that the government is so wasteful that bureaucrats went through the cost of arranging aerial surveillance!

Dangerous criminal executed

As a taxpayer, I get agitated about the waste of money. As a decent human being, this next part bothers me even more.

“I was thinking in my mind they were going to take the deer and take it to a wildlife shelter, and here they come carrying the baby deer over their shoulder. She was in a body bag,” Schulze said. “I said, ‘Why did you do that?’ He said, ‘That’s our policy,’ and I said, ‘That’s one hell of a policy.’”

The local cops justified the overkill approach by equating an animal shelter with a crack house.

“Could you have made a phone call before showing up, I mean, that’s a lot of resources,” WISN 12 News investigative reporter Colleen Henry asked. “If a sheriff’s department is going in to do a search warrant on a drug bust, they don’t call them and ask them to voluntarily surrender their marijuana or whatever drug that they have before they show up,” Niemeyer said,

Horrified citizens are complaining and fighting back, though I’m not holding my breath that justice will be served.

Schultz said she plans to sue the DNR for removing Giggles without even a court hearing. She also questioned what such an operation costs taxpayers. “They went way over the top for a little tiny baby deer,” Schultz said,

Remember, though, that this type of government thuggery is hardly unusual.

The Food and Drug Administration raided a dairy for the terrible crime of selling unpasteurized milk to people who prefer unpasteurized milk.

New York City imposed a $30,000 fine on a small shop because it sold a toy gun.

The pinheads at the Equal Employment Opportunity Commission went after Hooters for not having any male waiters in hot pants and tight t-shirts.

An unlucky guy wound up in legal hot water for releasing some heart-shaped balloons to impress his sweetheart.

Yup, our tax dollars at work. And Obama thinks government is too small and needs more of our money so it can do even more things.

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In an interview last week about Detroit’s bankruptcy, I explained that the city got in trouble because of growing dependency and an ever-rising burden of government spending.

I also warned that the federal government faces the same challenge. Washington is in trouble mostly because of poorly designed entitlement programs rather than excessive compensation for a bloated bureaucracy, but the end result is the same. Or, to be more accurate, the end result will be the same in the absence of genuine entitlement reform.

As I said in the interview, fiscal crisis was “the most predictable crisis in the world for Detroit [and] it’s the most predictable crisis for America.”

The Washington Examiner has the same assessment. Here’s how they conclude a recent editorial.

More than anywhere else in America (with the possible exception of Chicago) Detroit has been a one-party union city. Democratic politicians backed by the United Auto Workers and public employees unions have ruled virtually as they pleased. Along the way, many of the politicians ended up in jail on corruption charges and the bureaucrats made out with sweetheart deals on pensions and health benefits. Those sweetheart deals now account for most of the $20 billion in debt that put the city into bankruptcy. There are too many disturbing parallels between Detroit and America. The national debt of $17 trillion gets a lot of attention, but the reality is the government’s actual debt, counting the unfunded liabilities of Social Security, Medicare and federal employee and retiree benefits, exceeds $86 trillion, according to former congressmen Chris Cox and Bill Archer. As they say, things that can’t go on forever, won’t.

I used to warn that America was on a path to becoming Greece, but maybe now I should use Detroit as an example.

Some of America’s best political cartoonists already are using this theme.

Here’s one from Glenn McCoy. Since I’m not overly optimist about either Illinois or California, I also think it’s just a matter of time before this happens.

Detroit Cartoon 1

Keep in mind, however, that there was plenty of wasteful spending in both Illinois and California under Republican governors, so this is a bipartisan problem.

Speaking of California, here’s a good cartoon by Lisa Benson.

Detroit Cartoon 2

Amazingly, some people think California’s no longer in trouble because a retroactive tax hike collected more tax revenue. Yeah, good luck with that.

Next we have a cartoon by Rob Rogers of the Pittsburgh Post-Gazette.

Detroit Cartoon 3

And last but not least, Eric Allie weighs in with a cartoon comparing Texas and Detroit.

Detroit Cartoon 4

On a serious note, it would be interesting to see how Detroit looks compared to cities in Texas, such as Dallas and Houston.

But let’s end with something that’s really hilarious, albeit by accident rather than on purpose.

A few people want to enable Detroit’s profligacy. Here are some excerpts from a story in The Hill about union bosses wanting a federal-state bailout of Detroit.

Union leaders are calling on Congress and President Obama to provide a federal bailout to the city of Detroit. The executive council of the AFL-CIO, the nation’s largest labor federation, called for an “immediate infusion of federal assistance for Detroit” to be matched by Michigan, which they say has not done enough to keep the city from going through bankruptcy. …“It appears that Governor [Rick] Snyder and [Emergency Financial Manager] Kevyn Orr are pushing Detroit into bankruptcy to gut the modest benefits received by Detroit’s retired public service employees,” the AFL-CIO’s statement reads.

I suppose I could make some snarky comments, but I’ll close with two vaguely sympathetic responses.

First, there’s no way a bailout of Detroit goes through the House of Representatives. Heck, I don’t even think it could make it through the Senate. So some folks on the left would be justified if they asked why the high rollers on Wall Street supposedly deserved a bailout a few years ago but they don’t get one today.

The answer, of course, is discrimination by color. But I’m not talking black vs white. The color that matters in politics is green. The financial industry dispenses huge campaign contributions to both sides of the aisle, and the bailout was their payoff. Public employee unions, by contrast, give almost every penny of their money to Democrats, so there’s no incentive for GOPers to do the wrong thing.

Second, I have no idea whether retired bureaucrats in Detroit get “modest benefits.” I’m skeptical for very obvious reasons, but the real problem is that the city screwed up by having too many people riding in the wagon without paying attention to whether there were enough people producing in the private sector to pull the wagon.

Is that the fault of the garbage men, clerks, secretaries, and other municipal employees? That’s a hard question to answer. They obviously weren’t calling the shots, but they were happy to go along for the ride.

At some point, they should have paid attention to the message in this Chuck Asay cartoon.

P.S. For readers in New Jersey (and also New York City), I’ll be speaking this Wednesday, July 31, at the Friedman Day luncheon sponsored by Americans for Prosperity.

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About two weeks ago, while making an important point about the Laffer Curve, here’s what I wrote about the fiscal disaster in Detroit.

Detroit’s problems are the completely predictable result of excessive government. Just as statism explains the problems of Greece. And the problems of California. And the problems of Cyprus. And the problems of Illinois. …Simply stated, as the size and scope of the public sector increased, that created very destructive economic and political dynamics. More and more people got lured into the wagon of government dependency, which puts an ever-increasing burden on a shrinking pool of producers. Meanwhile, organized interest groups such as government bureaucrats used their political muscle to extract absurdly excessive compensation packages, putting an even larger burden of the dwindling supply of taxpayers.

And in this Fox News interview, I elaborate on these arguments and warned that federal government profligacy – if unchecked – will lead to similarly dismal results for the entire United States.

I want to augment on a couple of my points.

First, I explained that Detroit’s bankruptcy won’t have any major and long-lasting ripple effects – assuming politicians on the state or national level don’t encourage more bad policy with bailouts. If you’re a creditor, it’s not good news that the city owes you money, and it’s also not a cheerful time if you’re a retired bureaucrat hoping for years and years of pension payments and healthcare subsidies, but there’s no reason to expect that Detroit’s problems will impose significant damage on Michigan – particularly compared to the harm that would be caused if Detroit was allowed to continue with business as usual.

Similarly, the United States wouldn’t suffer major consequences if (probably when) California no longer can pay its bills. On the other hand, the European Union and the euro currency are being weakened by the mess in Greece, though that’s because they’ve been subsidizing bad fiscal policy with bailouts.

Second, I made the argument for entitlement reform, specifically the “pre-funding” version of Social Security reform that’s been adopted in nations as diverse as Australia and Chile.

Incidentally, this approach is even bolder than the Medicaid and Medicare reforms in the GOP budgets.

Third, I expressed some optimism that the United States has a chance to implement these much-needed reforms, in part because countries such as France and Japan will blow up before America.

And each time another nation, state, or city gets into trouble, it will strengthen our arguments to put the federal government on a long-overdue diet.

Big problems for America if politicians leave government on auto-pilot

Having a strong argument, though, is not the same as having an argument that will prevail. So even though America still has some breathing room, and even though the economic and moral case for spending restraint is very powerful, we’re in the unfortunate situation of having to rely on politicians in Washington.

So keep places such as Australia in mind just in case you need to escape when America’s fiscal chickens come home to roost.

In conclusion, I can’t resist drawing your attention to something I wrote back in 2011, when I showed the eerie similarity of Detroit’s collapse with the “blighted areas” in Ayn Rand’s classic novel, Atlas Shrugged.

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I’m a strong believer in federalism, but not because I think state and local governments are competent. Politicians and interest groups are a toxic combination in all circumstance.

But at least people have considerable ability to cross borders if they want to escape greedy and despotic governments at the state and local level. And when the geese with the golden eggs can fly away, this facilitates competition between governments and forces politicians to restrain their appetites.

So when California screws up, people can move to Texas. And when Detroit screws up, people can move just about anyplace.

But it’s not just stereotypically left-wing places where you find stupid and oppressive government. Here are three examples of bad government, and you get to pick the one that most exemplifies statism in action!

Option #1: The “Prove Your Gender” Requirement in Georgia

I realize that gender can be a somewhat fuzzy concept in modern society, and things can get even more complicated with modern technology, but you would think that certain things are…um…well, self evident.

But that wasn’t good enough for one bureaucrat in Georgia, as reported by the New York Daily News. Here are some relevant excerpts

A Georgia mom was ordered by state workers to prove she was a woman after she found her birth certificate mistakenly listed her as a man. Nakia Grimes, 36, said she was left “in shock” after officials told her she must undergo an invasive Pap smear exam if she ever wanted the error corrected. …Grimes said the offensive proposition came about when she spotted her birth certificate had an “X” listed next to male while getting her driver’s license renewed. …a state worker said the only way for the Clayton County resident to get her gender changed would be to prove it properly. “She said I needed to go have the exam, have a doctor write a note verifying you’re a woman, and bring it back – notarized,” she added.

Shockingly, this story actually has a happy ending. According to the story, the government eventually “…altered her gender status after checking her son Zion’s birth certificate, where she is legally listed as the birth mother.”

Option #2: Squandering Money to Rip Up Flowers in Washington, DC

When government fails to fulfill one of its supposed obligations, there’s a natural tendency among some people to volunteer their time and energy to improve their communities.

But bureaucrats don’t like private initiative, particularly since it makes it rather obvious that government is a costly and inefficient way of doing things. And that’s why good Samaritans who clean parks and rescue people open themselves up to harassment and persecution.

In other cases, the bureaucrats undo the good work of private citizens. Here’s some of what was reported in the Washington Post about one episode of spiteful bureaucracy.

…the transit system would look silly if it let perish 1,000 flowers planted secretly at the Dupont Circle station by local garden artist Henry Docter, the self-described Phantom Planter. I feared that Metro would merely neglect the flowers. Instead, last Sunday, it sent workmen to yank them out.The transit system regularly pleads poverty, yet employees devoted supposedly valuable time to remove more than 1,000 morning glories, cardinal flowers and cypress vines that Docter donated to the city — albeit without permission. The plants would have bloomed from August to October in a patriotic display of red, white and blue.Instead of greenery today and colors to come, the 176 flower boxes along the top stretch of the escalators at the station’s north entrance now feature dirt, a few straggling stems and the occasional discarded soda can. …“They paid people to tear out plants that everyone loves? Well, this is cause for insurrection. Talk about fixing something that’s not broken,” said Robin Diener, a member of the Dupont Circle Citizens Association board of directors.

Amazing. The bureaucracy claims there’s no money to plant flowers, but there’s somehow money to dig up flowers someone else has planted. That’s government in action!

Option #3: Thugs from Local Government Harass Organic Farmer

One of the most unpleasant features of big government is that bureaucrats have immense power to engage in vindictive attacks.

I’ve already shared some horror stories, such as this instance of vicious IRS persecution, a story of a woman jailed overnight because she let her kids play outside, an example of cops “legally” stealing $17,000 from a man who committed no crime, a video about how the EPA tried – and fortunately failed – to destroy a family, and a disturbing report about the Justice Department’s discriminatory attack on a hapless homeowner.

We have another example of government thuggery. Here are some passages from a disturbing Washington Examiner story, though you really should read the whole thing.

Since purchasing Liberty Farm in Fauquier County, Virginia, where she grows organic vegetables and has over 160 rescued livestock…, her life has been a series of harassment and bullying by people in power. The latest trouble is that her house…was vandalized. The same day, she was harassed at her farm by strangers in a Georgetown-registered car. Ten days earlier Martha had gone public about an IRS audit. Journalist Kevin Mooney broke the story that Boneta was audited by the IRS last year after a series of disputes with the Piedmont Environmental Council and the Fauquier County government. It was later shown that the audit was disclosed to at least one Fauquier County official, perhaps feloniously. Martha’s disputes brought her national attention because of her willingness to stand up to ridiculousness. She was cited and threatened with $5,000 fines for hosting a birthday party for eight 10-year-old girls without an “events” permit from the county. …Asked about the IRS audit of Boneta coming on the heels of legal disputes between the farmer and the PEC, [former IRS Commissioner] Richardson said, “Coincidences do happen.” But this audit has shown to be no coincidence. A Fauquier County supervisor blabbed about the audit two days after the notice was signed at the IRS and six days before Boneta received it. That shows collusion. The supervisor is Richardson’s friend and neighbor, and a former PEC board member.

This is such a disturbing story that I’m incapable of making a snarky or sarcastic comment. But at least this is a good example to illustrate my point that politicians and bureaucrats at the state and local level can be just as evil as those from Washington.

Anyhow, not it’s time for you to throw in your two cents. Which story best symbolizes government?

P.S. If you were inspired by these stories and want to engage in petty harassment of people who produce, here’s one way of training for government employment.

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I feel sorry for the people of California.  They’re in a state that faces a very bleak future.

And why does the Golden State have a not-so-golden outlook?

Because interest groups have effective control of state and local political systems and they use their power to engage in massive rip-offs of taxpayers. One of the main problems is that there’s a bloated government workforce that gets wildly overcompensated. Here are some staggering examples.

A state nurse getting $331,000 of annual compensation.

A county administrator getting $423,000 pensions.

A state psychiatrist getting $822,000 of annual compensation.

Cops that get $188,000 of annual compensation.

A city manager getting $800,000 of annual compensation.

But overpaid bureaucrats are not the only problem. California politicians are experts at wasting money in other ways, such as the supposedly high-speed rail boondoggle that was supposed to cost $33 billion and now has a price tag of $100 billion.

You may be thinking that I’ve merely provided a handful of anecdotes, so let’s recycle some numbers that I first shared back in 2010.

California state spending has outgrown the state’s tax base by 1.3 percentage points annually for 25 years. Simple arithmetic dictates that in lieu of constant tax increases, this perpetuates a deficit. From 1985 to 2009 state GDP in California grew by 5.5 percent per year, on average (not adjusted for inflation). Annual growth in state spending was 6.8 percent, on average.

In other words, California politicians have routinely violated my Golden Rule for good fiscal policy. And when government grows faster than the productive sector of the economy for an extended period of time, bad things are going to happen.

And those bad things can happen even faster when upper-income taxpayers can leave the state.

Walter Williams sarcastically suggested last year that California barricade the state to prevent emigration, reminiscent of the actions of totalitarian regimes such as East Germany.

But since state politicians fortunately don’t have that power, successful taxpayers can escape, and hundred of thousands of them have “voted with their feet” to flee to states such as Texas.

One recent example is NBA superstar, Dwight Howard, who left the Los Angeles Lakers for the Houston Rockets. There are probably several reasons that he decided to make the switch, but the Wall Street Journal opines on a very big reason why he’ll be happier in Texas. The WSJ starts by looking at Mr. Howard’s two options.

NBA labor agreement…allows the Lakers to offer Mr. Howard $117 million over five years, compared to a maximum of $88 million over four years in Houston.

That looks about even when you look at annual pay, with the Lakers offering $23.4 million per year and the Rockets offering $22 million per year, but there’s another very important factor.

…this picture looks a lot different once the tax man cometh: “Howard would pay nearly $12 million in California tax over the four years if he signs with the Lakers, but only $600,000 in state tax should he sign with Houston. This means that a four-year deal with Houston would actually yield an additional $8 million in after-tax income.” California has the highest top rate for personal income in the nation, while Texas has no state income tax.

Some of you may be thinking this is no big deal. After all, the Lakers will sign somebody to take Dwight Howard’s place and that person will also get a huge salary.

That’s true, though Lakers fans probably aren’t happy that they’re destined to be a middle-of-the-pack team. The bigger point, though, is that there are tens of thousands of other high-paid people who can leave the state and there’s no automatic replacement. And many of them already have escaped.

Including very well-paid Chevron workers.

Ramirez California Promised LandNow that California’s moochers and looters have imposed an even higher top tax rate of 13.3 percent, expect that exodus to continue. Other pro athletes are looking to escape, and even famous leftists are thinking about fleeing.

In other words, Governor Jerry Brown can impose high tax rates, but he can’t force people to earn income in California. I don’t know whether to call this “the revenge of the Laffer Curve” or “a real life example of Atlas Shrugs,” but I know that California will be a very bleak place in 20 years.

P.S. Here’s the famous joke about California, Texas, and a coyote. And here’s an amusing picture of the California bureaucracy in (in)action.

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What do you do if you’re part of a government bureaucracy that has been caught red-handed engaged in sleazy, corrupt, and (almost surely) illegal targeting of Americans for their political beliefs?

But before you answer, keep in mind that your bureaucracy also has been exposed for wasting huge amounts of money at lavish conferences. What’s the ideal way of dealing with the fallout from that scandal as well?

The answer is simple. Even though you and your pals already are paid more than the peasants in the private sector, give yourself and your cronies giant bonuses!

I’m not joking. Here are some excerpts from an AP report.

The Internal Revenue Service is about to pay $70 million in employee bonuses despite an Obama administration directive to cancel discretionary bonuses because of automatic spending cuts enacted this year, according to a GOP senator. …“The IRS always claims to be short on resources,” Grassley said. “But it appears to have $70 million for union bonuses…” Three congressional committees and the Justice Department are investigating the targeting of conservative groups. And key Republicans in Congress are promising more scrutiny of the agency’s budget, especially as it ramps up to play a major role in implementing the new health care law.

Sort of makes this cartoon self evident.

IRS Trust Cartoon

Indeed, this motivates me to announce “Mitchell’s First Theorem of Government.”

I’ve explicitly expressed this sentiment in the past, and hinted at it here, here, and here.

Now it’s time to make it official.

Mitchell's First Theorem of Government

I hope you’ll agree this is a nice addition to Mitchell’s Golden Rule, Mitchell’s Bleeding Heart Guide, and Mitchell’s Law.

And maybe one of these will catch on and I can be famous like Art Laffer.

P.S. Enjoy some cartoons about the IRS scandals here, here, and here.

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I’ve repeatedly explained that Keynesian economics doesn’t work because any money the government spends must first be diverted from the productive sector of the economy, which means either higher taxes or more red ink.

So unless one actually thinks that politicians spend money with high levels of effectiveness and efficiency, this certainly suggests that growth will be stronger when the burden of government spending is modest (and if spending is concentrated on “public goods,” which do have a positive “rate of return” for the economy).

I’ve also complained (to the point of being a nuisance!) that there are too many government bureaucrats and they cost too much.

But I never would have thought that there were people at the IMF who would be publicly willing to express the same beliefs. Yet that’s exactly what two economists found in a new study.

Here are some key passages from the abstract.

We quantify the extent to which public-sector employment crowds out private-sector employment using specially assembled datasets for a large cross-section of developing and advanced countries… Regressions of either private-sector employment rates or unemployment rates on two measures of public-sector employment point to full crowding out. This means that high rates of public employment, which incur substantial fiscal costs, have a large negative impact on private employment rates and do not reduce overall unemployment rates.

So even an international bureaucracy now acknowledges that bureaucrats “incur substantial fiscal costs” and “have a large negative impact on private employment.”

Well knock me over with a feather.

Next thing you know, one of these bureaucracies will tell us that government spending, in general, undermines prosperity. Hold on, the European Central Bank and World Bank already have produced such research. And the Organization for Economic Cooperation and Development has even explained how welfare spending hurts growth by reducing work incentives.

To be sure, these are the results of research by staff economists, which the political appointees at these bureaucracies routinely ignore.

Nonetheless, it’s good to know that there’s powerful evidence for smaller government, just in case we ever find some politicians who actually want to do the right thing.

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I’ve shared some outrageous stories about bureaucrats ripping off taxpayers.

So perhaps it is time to create a Bureaucrat-of-the-Year Award to honor the parasite who best exemplifies the unofficial SEIU motto of “Better Living on the Taxpayer Teat.”

And I think we already have a very strong candidate for 2013. Ms. Dorothy Dugger certainly has the right skills, working the system to get 19 months of vacation time after being forced out of her position. Here are some excerpts from a story in the Washington Times.

A former official of the Bay Area Rapid Transit raked in more than $333,000 last year without working a single day after she resigned under pressure in May 2011. Dorothy Dugger, the BART’s former general manager, quietly stayed on the payroll, burning off nearly 80 weeks of unused vacation time, drawing paychecks and full benefits for more than 19 months after she agreed to quit more than two years ago, San Jose Mercury News reported.

But that’s only part of the story. Yes, she was grossly overpaid and, yes, she has been bilking the grotesquely lavish fringe benefits system reserved for the bureaucracy.

But she also got a big fat severance package! Sort of a reward she received because she was an incompetent employee who wasn’t properly fired by an incompetent government.

But no worries. Taxpayers are there to smooth everything over.

The months of extra pay were in addition to the $920,000 Ms. Dugger was paid to leave after the BART’s board botched an effort to fire her by violating public meetings laws, San Jose Mercury News reported.

You’ll be happy to know, however, that Ms. Dugger is willing to acknowledge that some people may not be happy about

When asked by the paper if she thought the payout was fair to BART riders, she said: “That’s a fair issue to debate.”

How generous of her to say this is a “fair issue” now that she’s already pocketed all her loot and left “government service.”

But don’t forget that there are millions of other bureaucrats still on the payroll, earning more than us while working less than us.

And while Ms. Dugger has some impressive credentials for the Bureaucrat-of-the-Year Award, she does face some stiff competition. John Geary, for instance, used his job as a welfare bureaucrat to perpetrate a welfare-for-sex scam. And Susan Muranishi managed to snag a guaranteed yearly payment of $423,664 for the rest of her life.

We pay, they play.

P.S. Let’s be thankful we’re not Denmark.

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I’ve complained endlessly about America’s bloated and expensive government bureaucracies. It irks me that people in the productive sector get slammed with ever-higher taxes in part to support a bunch of paper pushers, regulators, cronies, busy bodies, hacks, and others who have climbed on the gravy train of public sector employment.

It even bothers me that bureaucrats put in fewer hours on the job than private-sector workers, even though I realize the economy probably does better when government employees are lazy (after all, we probably don’t want hard-working OSHA inspectors, Fannie and Freddie regulators, and IRS bureaucrats).

But sometimes it helps to realize that things could be worse. And based on some international data from my “friends” at the OECD, let’s be thankful the United States isn’t Denmark.

That’s because nearly 20 percent of Denmark’s economic output is diverted to pay the salaries and benefits of bureaucrats, compared to “only” about 11 percent of GDP in the United States.

Bureaucrat Costs

Not only are bureaucrats nearly twice as expensive in Denmark as in the United States, they’re also much more expensive in Denmark than in other Nordic nations.

Speaking of Nordic nations, they tend to get bad scores because a very large share of their populations are sucking at the government employment teat.

Bureaucrat share of labor force

Whether we’re looking at the total cost of the bureaucracy or the number of bureaucrats, the United States is a middle-of-the-pack country.

But I am somewhat surprised by some of the other results.

  • Germany is significantly better than the United States, whether measured by the cost of the bureaucracy or the size of the bureaucracy.
  • Japan also does much better than America, notwithstanding that nation’s other problems.
  • In the I’m-not-surprised category, France does poorly and Switzerland does well.
  • To see where bureaucrats are most overpaid, look at the nations (particularly Greece, but also Portugal and Spain) where overall pay is a very large burden but bureaucrats are not a big share of the workforce.
  • To see where the trends are most worrisome, look at the changes over time. The total cost of bureaucracy, for instance, jumped considerably between 2000 and 2009 in Ireland, Greece, the United Kingdom, Denmark, Spain, and the United States. So much for “austerity.”

P.S. These numbers are only for OECD nations, so it’s quite possible that other jurisdictions are worse. To cite just one example, I was one of the researchers for the Miller-Shaw Commission, which discovered that fiscal problems in the Cayman Islands are almost entirely a function of too many bureaucrats with too much compensation.

P.P.S. Here’s my video on the cost of bureaucracy in the United States.

P.P.P.S. Denmark has a bloated and costly bureaucracy, but it compensates by having very pro-market policies in areas other than fiscal policy.

P.P.P.P.S. Perhaps the numbers are bad in Denmark because people like Robert Nielson are listed on government payrolls as independent leisure consultants?

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John Geary is not a good person.

He’s been a bureaucrat for about a decade, which almost surely means he’s over-paid and under-worked.

IRS welfareNot only is he a bureaucrat, but his job is to distribute welfare, which means he’s been screwing taxpayers and trapping poor people into government dependency.

But apparently he wasn’t satisfied with screwing taxpayers and poor people, at least in the figurative sense of the word. Here’s some of a report from a local CBS station.

Welfare Bureaucrat CriminalA state welfare worker is facing charges after allegedly offering benefits in exchange for sex. …According to the police criminal complaint, Geary also repeatedly asked the woman to smoke crack with him on the weekends when his wife was working and his children were asleep in their North Versailles home. …Police think there may be more victims as Geary allegedly told the woman that he had done the same thing with women in the past.

Gee, he sounds like a really swell guy and a model husband and father, wouldn’t you agree?

P.S. Perhaps Mr. Geary should be the first non-recipient member of the Moocher Hall of Fame?

P.P.S. Furthermore, we could include this in the Great-Moments-in-Local-Government series. Previous versions can be seen here, here, here, here, here, here, here, here, here, here, here, here, and here.

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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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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?

IRS Employees arrested

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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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?

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.

Jerry Brown MosesEven 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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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.

Here are some good state maps with useful information.

And I even have a local map.

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.

Non-teacher to Teacher Ratio Map

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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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!

Edwards Bureaucrat Pay ComparisonTo 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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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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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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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.

Bureaucrat Hours Worked

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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