Archive for February 3rd, 2010

I’d say only a government would be stupid enough to sign a contract that obligates them to pay somebody more than $100K each year for doing nothing, though it’s possible the corporate bureaucrats at the auto companies may have done something equally stupid in their deals with the UAW. But the real lessons to be learned here are, 1) that governments sign absurdly generous agreements with unions because they have no reason to be responsible when spending other people’s money, and 2) what makes unions so destructive are not necessarily salaries, but rather the accompanying rules that make it all but impossible to weed out bad employees. In any event, here’s a New York Post story that should anger all taxpayers:

A Queens teacher who collects a $100,000 salary for doing nothing spends time in a Department of Education “rubber room” working on his law practice and managing 12 real-estate properties worth an estimated $7.8 million, The Post found. Alan Rosenfeld hasn’t set foot in a classroom for nearly a decade since he was accused in 2001 of making lewd comments to junior-high girls and “staring at their butts,” yet the department still pays him handsomely for sitting on his own butt seven hours a day. …The DOE can’t fire him. “We have to abide by the union contract,” spokeswoman Ann Forte said. So Rosenfeld simply collects his $100,049 salary — top scale for teachers — plus full health benefits and the promise of a fat pension, about $82,000 a year if he were to retire today. His pension will grow by $1,700 each year he remains. He could have retired at age 62, but he stays. He has also accumulated about 435 unused sick days — and will get paid for half of them when he retires.

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While speaking in Canada earlier this week, I authored a column in the Financial Post. I hope the entire piece is worth reading, but here are a few of the highlights:

The Obama Administration claimed that spending more money would keep the unemployment rate below 8% in the United States, yet it climbed to 10%. The United Kingdom and Canada also suffered continued stagnation after adopting so-called stimulus packages. Ironically, statist nations such as France and Germany that resisted the siren song of Keynesianism better weathered the global economic storm. …While many factors influence economic performance, the negative impact of government spending is one reason why small-government jurisdictions such as Hong Kong (where the burden of the public sector is below 20% of GDP) have higher growth rates than nations that have medium-sized government, such as Canada and the United States. The same principle explains in part why big-government countries such as France often suffer from economic stagnation. …Most studies using current economic data show that economic performance is maximized when the public sector is less than 20% of GDP. And if historical data is used, the evidence suggests that government should be even smaller. Ironically, John Maynard Keynes might not be a Keynesian if he was alive today. He certainly would not be a proponent of big government. In correspondence with another British economist, he agreed with the premise of “25% [of GDP] as the maximum tolerable proportion of taxation.”

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Back during last year’s debate over the so-called stimulus, the Cato Institute took out a full-page ad in several newspapers to highlight the fact that hundreds of economists, including Nobel laureates, rejected the notion that making government bigger would boost growth.

We published that ad because we couldn’t believe Obama was asserting that “every economist, from the left and the right” endorsed a bigger burden of government spending. As one might expect, the ad had a big impact on the debate, particularly thinks to alternative media coverage such as blogs and talk radio.

The establishment media was a bit slow to pick up on the story, but our motto is better late than never, so yesterday it was good to see ABC News expose Obama’s nonsensical claim about “every economist.” The story even quotes me and links to one of my blog posts, though it would have been much more effective to link to Cato’s stimulus ad (I’m not bashful, to be sure, but even I’m willing to admit that Nobel laureates rank higher).

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