Another Great Moment in Local Government

It’s no secret that I have very little faith in the competence and good will of government.

I focus primarily on the fecklessness of Washington, but I also can’t resist highlighting malfeasance and stupidity by local governments, state governments, and foreign governments.

Indeed, I’ve even had to create special categories to keep track of some of the more amazing episodes of bureaucratic blundering. Here are just a few that will leave you shaking your head in disbelief.

A bizarre collection of examples showing anti-gun political correctness in schools.

A local government stupidity contest.

A bunch of supposed victories in the Drug War.

A comparison of government stupidity in the United States and United Kingdom.

A list of new “rights” concocted by governments.

A pick-the-dumbest-regulation poll.

And even a strange collection of stories about anti-Bambi persecution by bureaucrats.

Today, we’re going to add to this collection. But I’m not sure how to categorize this story. Is is a great moment in local law enforcement, like when cops bust little girls with lemonade stands, or they arrest young men for the horrible crime of saving people from drowning?

Or is it an example of the regulatory state run amok, like when the FDA conducted a raid to stop consenting adults from buying and selling unpasteurized milk,  or when the Greek bureaucracy required submission of stool samples in order to set up an online company.

You’ll understand why it’s hard to decide after reading this story. The issue is (gasp!) unregulated topless hair cutting. Here’s some of what was reported by the New York Times.

A woman who allegedly offered topless hairstyling services in northern Colorado faces criminal charges. But police say the problem isn’t cutting hair without a top. …46-year old Suzette Hall was arrested Wednesday night on suspicion of practicing cosmetology without a license.

I don’t know about you, but I’m going to sleep better tonight knowing that the dangerous scourge of unlicensed haircutting in Colorado has been stifled.

Aren’t we lucky that the government is protecting us from such dangers!

Interestingly, the Rebel Barber (who is not the same person as the Rebel Economist) actually tried to comply with the government’s regulatory demands. But there was no license for her particular form of business.

Hall’s ex-husband told police she set up shop in Loveland and offered services as “Rebel Barber.” He told police she applied for “a nude license for hairstylists,” but no such license exists.

Perhaps we can get some federal legislation requiring all states to have new bureaucracies for the purposes of licensing and regulating nude hairstylists?

Actually, I shouldn’t even make that kind of joke. Some politician might take the suggestion seriously.

Better to leave such matters in the hands of local governments. That way, the potential damage is limited by borders.

Speaking of which, the politicians of Snohomish County in Washington have created special licensing rules for adult coffees shops.

Though that’s amateur hour compared to the Germans, who have figured out how to use parking meters to tax prostitutes.

In other words, governments don’t mind sex so long as they can figure out how to regulate it or tax it.

P.S. The all-time record for government incompetence was set by Fall River, Massachusetts in 2011.

P.P.S. As you might imagine, Dave Barry is very funny when he decides to mock government.

Read Full Post »

A Thanksgiving Tale of How Property Rights Saved America

The genius of capitalism is that there is a link between effort and reward. In a genuine market economy (as opposed to cronyism), people can only make themselves rich by working harder and smarter to satisfy the needs and wants of others.

The blunder of statism is that the link between effort and reward is damaged. Punitive tax rates, for instance, punish people for producing. Redistribution programs, meanwhile, create incentives for dependency. And regulation throws lots of sand in the gears of the economy, while also creating big opportunities for corrupt cronyism.

I sometimes try to make this clear by citing the failure of communism. And by failure, I’m not talking about the brutality of Soviet-style dictatorships. Instead, I’m referring to the basic failure of state-controlled economies. Heck, places such as Cuba and Venezuela can’t even produce enough toilet paper!

And North Korea is such a basket case that it reduced physical requirements for military service after pervasive famine led to a stunted generation.

But I don’t want anyone to accuse me of red-baiting, so let’s pretend communism never existed and look at an unfortunate episode from American history.

When the colonists created the Plymouth Colony, they used a socialist model. This video from Reason TV explains how that system foundered.

Gee, what a surprise. Socialism was the problem and capitalism was the solution. When you give people property rights and establish a clear link between effort and reward, good things happen.

As Bono now understands. More remarkable, even Obama once said we should “let the market work.” So maybe there’s hope.

In honor of the season, let’s share a few more Thanksgiving cartoons, all of which – as you might expect – make fun of Obamacare.

Continuing a theme from some of yesterday’s cartoons, we have the Turkey of the Year.

And an observation on how well the law is working.

This Lisa Benson cartoon is very appropriate since the Mayflower carried the first colonists to Plymouth.

P.S. I don’t want to pass up this opportunity for some well-deserved mockery of the evil philosophy of communism,. You can see some great Reagan jokes in the fourth video of this link and the first video in this link. And this doctored image makes a very powerful point in an amusing fashion.

P.P.S. Back in 2010, I also debunked the leftist counter-argument in a post that included the Reason video and a John Stossel column on the topic of the Pilgrims and property rights.

Read Full Post »

Some Partially Serious Thanksgiving Humor

Tim Carney of the Washington Examiner is a must-read columnist and expert on the pervasive corruption in Washington.

He’s also an insightful commentator on why freedom and morality go hand in hand, which suggests libertarians and conservatives should be strong allies.

But today, in honor of the holidays, let’s address a lighter topic. Tim has some helpful advice on how to educate your crazy statist relatives.

When Thanksgiving talk turns political, do you feel like you and your liberal relatives can’t communicate? It’s okay. I can help you. I was born in Greenwich Village to a lawyer dad and community-organizer mom. I used to live on Capitol Hill, and now I live in Montgomery County in Maryland. I even served a year as an MSNBC contributor. This is all to say, I speak liberal. …So let me offer my conservative and libertarian readers the first annual Thanksgiving Guide to Making Conservative Arguments in Liberals’ Language.

Tim shows how you can help them understand that regulation is misguided.

Your liberal relatives generally trust government regulations to solve problems. They don’t sweat the costs to the economy as much as you do. Throw in a healthy distrust of Corporate America — often even an unhealthy disdain for it — and progressives (this is what they call themselves these days) end up regarding regulation as a force for good. You can plant a seed of skepticism about regulators’ ability to do good, though, by pointing to the salad course Trevor brought. The organic, local, sustainable kale in it might be impossible to get after the Obama administration’s food safety rules go into effect. …At work here are two dynamics common to regulation: They’re called “regulatory capture” and “the overhead smash.” Obama’s food safety czar is Michael Taylor, former top lobbyist for Monsanto. (You’ll be amazed at the power of the word “Monsanto” with some of your relatives.) Industrial farms and major food processors hire the best lobbyists and thus get a seat at the table when the FDA writes the rules. Thus, the biggest players in the regulated industry have “captured” the agency that regulates them. “The overhead smash” is my phrase for the tendency of regulations to add to overhead — the fixed costs of doing business — which smashes smaller competitors while protecting the big guys. In the food safety realm, small farms are begging to be exempted from these rules that only big farms can afford.

Since regulation imposes a staggering cost on the economy, I hope Tim’s suggested approach is successful.

And he explains how you can open their eyes about the need for Social Security reform.

FDR is still probably a god to these relatives, so you’ve got an uphill battle convincing them Social Security needs reforming. Here’s one place to start: Social Security is funded by a regressive tax and it redistributes wealth from minorities to whites. Here’s a line for you: For every $100 that white beneficiaries pay in taxes, they receive $113 in benefits, blacks receive $89 and Hispanics receive $58. …Social Security’s redistribution isn’t due to some racist Republican rule change. …White people live longer and are less likely to be immigrants, so they earn more credits and collect for longer.

And since more than 30 jurisdictions around the world have implemented personal retirement accounts (most recently the Faroe Islands), we know that reform can be very successful.

But let’s not get all serious when there’s turkey and football to occupy our attention, so let’s close with some great cartoons.

We’ll begin with a gem from Henry Payne, who identifies the top turkey of the season.

Michael Ramirez then identifies a prayer that no longer applies.

Robert Ariail suggests that the wrong turkey got pardoned at the White House.

And here’s another one of his cartoons mocking the President’s reprehensible dishonesty.

Nate Beeler also has some fun with the notion of a White House turkey pardon.

This Glenn McCoy classic is probably my favorite from today’s collection.

Last but not least, we have another Ramirez cartoon, which also weaves in some Iran humor.

P.S. Looking through the archives, we had some good class-warfare cartoons last year.

P.P.S. In 2011, we had a cartoon about politicians and a dismal vision of a future Thanksgiving caused by Obama and Bloomberg.

P.P.P.S. We shared a serious lesson about incentives and private property in 2010, but also had some non-political humor here and here.

P.P.P.P.S. In the blog’s first year, we looked at how government makes Thanksgiving more expensive and wondered why the PC crowd doesn’t like the holiday.

Read Full Post »

More Bad News for Gun Grabbers

Citing polling data with poorly (or dishonestly) worded questions, anti-Second Amendment ideologues often argue that gun control is popular.

The real test, though, is what happens on election day. That’s why it was such big news when two incumbent Democrats from Colorado’s State Senate were defeated in a recall election.

They both represented districts that had voted for Obama, yet they were easily tossed out of office after voting for legislation to restrict the rights of law-abiding citizens.

Well, as Yogi Berra would say, it’s deja vu all over again. Another statist politician has been forced out of a job in Colorado. Here are some details from a local news report.

Political thug gives up her seat after undermining constitutional freedoms

State Sen. Evie Hudak has decided to resign rather than risk facing a recall election… Hudak, D-Westminster, could have been the third Democratic lawmaker to face a recall over a package of gun control bills they helped pass earlier this year. Sens. John Morse, D-Colorado Springs, and Angela Giron, D-Pueblo, both decided to fight recall elections against them, but were ousted in September in favor of Republican replacements.

So why is she throwing in the towel? Because she thinks she will lose and that would give the GOP control of the State Senate.

Hudak is playing it safe. By resigning before the signatures are turned in, she assures that a Democratic vacancy committee will appoint her replacement, keeping the seat — and the senate — in the party’s hands, at least through November, when her successor will be forced to win reelection.

It’s almost a shame that there won’t be a recall election. Not because I care about whether Republicans take over the State Senate, but rather because I would like to see the outgoing Napoleonic Mayor of New York, Michael Bloomberg, squander more of his fortune on another Colorado contest. He blew a lot of money on the earlier gun-related recall elections, and he also dropped a lot of cash on a failed effort to replace the state’s flat tax with a so-called progressive scheme that would set Colorado on a path to becoming another California.

But I won’t let that little detail reduce the happiness I feel that a political thug has been forced to resign. Particularly since that sends a signal to other politicians all across the nation.

Since we’re on the topic of gun control, this is a great opportunity to call attention to a powerful column by Stephen Halbrook. He explains how the Nazis used gun control to advance their totalitarian and murderous agenda.

Historians have documented most everything about it except what made it so easy to attack the defenseless Jews without fear of resistance. Their guns were registered and thus easily confiscated.

He provides some of the sordid history of the period.

The Nazis immediately used the firearms-registration records to identify, disarm and attack “enemies of the state,” a euphemism for Social Democrats and other political opponents of all types. …The Gestapo cautioned the police that it would endanger public safety to issue gun permits to Jews. …By fall of 1938, the Nazis were ratcheting up measures to expropriate the assets of Jews. To ensure that they had no means of resistance, the Jews were ordered to surrender their firearms. …This scenario took place all over Germany — firearms were confiscated from all Jews registered as gun owners. …Under the pretense of searching for weapons, Jewish homes were vandalized, businesses ransacked and synagogues burned. Jews were terrorized, beaten and killed. Orders were sent to shoot anyone who resisted. SS head Heinrich Himmler decreed that possession of a gun by a Jew was punishable by 20 years in a concentration camp.

So what’s the message. Halbrook puts it in very stark terms.

Today, gun control, registration and prohibition are depicted as benign and progressive. Government should register gun owners and ban any guns it wishes, Americans are told, because government is inherently good and trustworthy. The experiences of Hitler’s Germany and, for that matter, Stalin’s Russia and Pol Pot’s Cambodia, are beneath the realm of possibility in exceptional America. Let’s hope so.

Most people assume that such awful things could never happen in America.

And maybe they’re right. But when you look at very grim numbers showing that the United States is headed for a fiscal collapse, and when you consider that there already has been rioting in Europe as the welfare state implodes, it doesn’t require a very vivid imagination to think that America could face some very tough times in the not-too-distant future.

That’s why I argued, in this interview with NRA TV, that gun ownership is very important in the event of societal breakdown.

Let’s conclude with a bit of gun control satire.

My fourth-most viewed post is a montage of dictators who supported gun control. But some dictators are worse than others.

And the former head of the National Socialists definitely is in that category.

So, given the wise words we just read from Stephen Halbrook, let’s all keep in mind this very powerful message from Jews for the Preservation of Firearms Ownership.

P.S. If you want more information on gun control, I strongly recommend this analysis from an actual firearms expert, as well as remarkable admissions from leftists that can be read here and here.

P.P.S. If you’re interested, my three posts with the most views are the set of cartoons showing why welfare states collapse, a joke about California and Texas, and a story of how you can use beer to explain the tax system.

Read Full Post »

Least Sympathetic Obamacare Victims…Ever

I have great sympathy for almost all segments of the population that have been disadvantaged by Obamacare.

Among the victims are many relatively powerless people, including children, low-income workers, and retirees.

It’s equally tragic that millions of families – notwithstanding the President’s oft-repeated promise – already have lost their insurance plans, and it’s a crisis that this number could swell to more than 50 million over the next year.

And taxpayers, needless to say, are going to incur heavy burdens because of the President’s reckless new entitlement.

Heck, compared to all these groups, the unfortunate people who merely had to endure the “third world experience” of the Obamacare website should consider themselves lucky.

Yet even though I am brimming with empathy for the victims of Obamacare, there is one group that is suffering and I can say without hesitation or reservation that the people affected don’t tug on my heart strings or engender feelings of sympathy.

I’m referring to the staffers on Capitol Hill. According to a Politico story, some of these folks are having to pay more thanks to the President’s scheme to expand government’s control over the healthcare system. Here are the key excerpts.

Veteran House Democratic aides are sick over the insurance prices they’ll pay under Obamacare, and they’re scrambling to find a cure. “In a shock to the system, the older staff in my office (folks over 59) have now found out their personal health insurance costs (even with the government contribution) have gone up 3-4 times what they were paying before,” Minh Ta, chief of staff to Rep. Gwen Moore (D-Wis.), wrote to fellow Democratic chiefs of staff… In the email, Ta noted that older congressional staffs may leave their jobs because of the change to their health insurance.

Oh no, they might leave? Perish the thought! Surely they have more money to waste, more regulations to impose, and higher taxes to approve.

You may detect a slight tone of sarcasm in my remarks, but that’s for a good reason. First of all, many of these staffers are only in an unpleasant situation because their bosses voted for Obamacare. If they want to complain, perhaps they should schedule a meeting with the power-hungry politicians that caused the mess in the first place.

Second, I have a hard time feeling much empathy for these people when the Obama Administration already has arbitrarily and illegally altered the law so that taxpayers will cover 75 percent of their health insurance expenditures. I realize there’s an entitlement mentality in Washington, but you would think these people would have some sense of shame!

Let’s finish by enjoying some new cartoons. Here’s one from Gary Varvel on the economic burden of Obamacare, which appeals to me for obvious reasons.

By the way, if you like the Aflac duck and the GEICO gecko, here’s another Varvel cartoon you’ll appreciate.

Now we have a Bob Gorrell cartoon that starkly exposes the President’s illegal changes to Obamacare.

In other words, this bit of satire turned out to be reality.

Nate Beeler has a very good cartoon that captures Obama’s disdain for the suffering of ordinary people.

It fits in well with the Ramirez cartoon in this post.

Then we have Jerry Holbert showing a way to really punish Iran.

Sort of like what Rand Paul said (quoting me!) about Syria.

Last but not least, here’s another Varvel cartoon that sums up what Obama staffers are trying to do.

Surprisingly, this is only the second time I can recall sharing a cartoon featuring Humpty Dumpty.

But don’t laugh too hard at these cartoons. Obama may get the last laugh if he can survive the short-run political damage and create more long-run government dependency.

P.S. Actually, the title of this post is wrong. There is a group of people in America who don’t like Obamacare and – believe it or not – they are even less deserving of sympathy than the army of staffers on Capitol Hill.

P.P.S. Let’s keep our fingers crossed that politicians don’t deal with this issue by re-hiring the taxpayer-financed “grief counselors” who were used to console Democratic staffers after the 2010 elections.

P.P.P.S. Here’s a very funny parody video about the Obamacare disaster.

Read Full Post »

Paul Krugman Is (Sort of) Right about a Plot against France

Every so often, when the temptation is too great, I’ll comment on something written by Paul Krugman.

When he botched his analysis of Estonia, for instance, I joined that nation’s President in correcting some egregious errors.

And I periodically remind people that Krugman was wildly wrong to deny the scandalous shortcomings of the government-run health system in the United Kingdom.

Today, however, I want to agree with Paul Krugman. He recently wrote that there’s a “plot against France,” and I think that’s unambiguously true.

But we do have one small disagreement. Krugman thinks the plot is being carried out by right-wing ideologues who want to discredit France because it “committed the unforgivable sin of being fiscally responsible without inflicting pain on the poor and unlucky.”

I think, by contrast, that the plot against France is being carried out by France’s statist politicians.

Simply stated, it’s almost as if the nation’s political elite is trying to destroy the nation with a fiscal regime of reckless spending and punitive taxation.

And since France’s “leaders” presumably are aware of the country’s grim medium-term fiscal outlook, it certainly seems like they are scheming to impoverish their own people.

Let’s look at some evidence of France’s decline.

Canada’s Financial Post has an article about the growth of government dependency in France. Here are some of the horrifying details.

More than half of the active French population is living off the state, according to figures in a new book by a tax lawyer seeking to explain why so many of his clients in private enterprise are leaving France. …the author begins with France’s or civil servants, of which there are 5.2 million and whose number has increased by 36% since 1983. These represent 22% of the workforce compared with a European average of 15%, leading him to conclude that France has 1.5 million too many “fonctionnaires”. He then adds the 3.2 million unemployed people in France relying on state benefits, another 1.3 million taking low-income handouts, a further two million in the “parapublic” sector — majority state-owned companies — and more than a million people in state-funded associations such as charities. Under the current Socialist government, there are 750,000 state-subsidized jobs and the author includes a million people in the agricultural sector who rely largely on contributions from European Common Agricultural Policy subsidies.

Wow. I sometimes complain about growing dependency in the United States, but I guess we should count ourselves as being lucky that we’re not as far down the path as France.

The article continues with some observations about how the geese with the golden eggs are tired of being mistreated.

The book is written in the first person, supposedly by a successful boss of a medium-sized company who decided to move abroad with his wife and children to avoid “being treated like an enemy because I make a good living”. In fact, the narrator is a mixture of about 20 clients of Jean-Philippe Delsol, a tax advisor, who is also an author and administrator of the Institute for Research in Economic and Fiscal Issues, a think tank. Those fleeing France would only speak anonymously “to avoid reprisals from the tax authorities,” he explained. …The huge nanny state, he said, had “modified the very spirit of (French) society by turning everyone into fonctionnaires”. …soon “the system will no longer function as there will be less and less people working to support more and more people working less”, he argued.

The last quote in the excerpt, by the way, is a real-world version of the famous set of cartoons about what happens when too many people decide to climb in the wagon.

But not everybody has the ability to escape France’s tax net, and those that remain are protesting against a rapacious central government.

A story from France 24 discusses anti-tax riots. Here are some highlights.

Protest organisers said 30,000 people, including hauliers, fishermen and food industry workers, had gathered in the town of Quimper in Brittany to demonstrate against an environmental tax on trucks and layoffs, even though the government had earlier in the week suspended the application of the so-called ecotax. Authorities estimate that 15,000 people joined in the protest. Some of the protestors pelted police with stones, iron bars and even pots of chrysanthemum, while others burned palettes. Police responded with water cannons and tear gas. …protestors marched under banners such as “Right to work”, “Bretons yes, sheep no” and “France is not a cash cow”. Many also wore red caps, a symbol of the anti-tax campaign in Brittany in the 17th century. …52-year-old mason Claude Sergent said the taxes “are killing us”.

Even equestrians are agitated about the growing burden of the value-added tax. Here are some tidbits from a news report.

Thousands of horse-lovers paraded their animals through central Paris on Sunday in a protest against a planned sales tax rise they say will put riding centers out of business and send horses to the slaughterhouse. …Organizers of Sunday’s protest say the EU-mandated rise of France’s VAT to 20 percent as of January 1 – from the 7 percent reduced rate paid by equestrian centers today – will shut down a fifth of centers across France. Some 6,000 jobs will be lost, they estimate, and 80,000 horses will have to be sent to slaughter. “Riders, up in arms!” shouted protesters carrying signs reading “Sales tax at 20 percent – Death of Horses and Ponies”. A guillotine was wheeled through the streets, its blade poised above a toy horse’s head. Another horse effigy was mounted on a crucifix.

And since we’re on the subject of the VAT, it’s worth noting that the feckless Finance Minister is browbeating retailers in hopes that they will swallow the cost of a tax hike rather than passing it on to consumers. Here are key portions of a Reuters report.

France’s finance minister appealed to retailers’ better instincts on Thursday, urging them not to pass on a rise in sales tax to shoppers in January as public frustration grows over a tax-heavy 2014 budget. Following violent anti-tax protests in western France, Pierre Moscovici said he would not abandon plans to raise value added tax by 0.4 percent on Jan. 1. But he would ask retail chains – already struggling with smaller margins than some of their European peers – not to raise their prices. Nobody has to reflect this (VAT hike) in their prices,” he told RTL radio. “I think it’s important to show virtuous behaviour, notably in the retail sector which along with the French people must display a civic spirit.”

And let’s not overlook the government’s additional taxes on people who save. Here is some analysis from a column in the UK-based Telegraph.

This was the face of a future French Tea Party, a political development that seems increasingly likely. Mr Hollande also had to “suspend” — a word that fills the French with unease, as it promises a stealthy return of the same measures whenever the fracas dies down — a 15.5 per cent retroactive tax on savings schemes that seemed tailor-made to infuriated his most natural voters. A Parisian barrister, himself not a Hollande voter, told me that his Portuguese-born cleaning lady, a single mother of five children, had sworn never again to cast her ballot for the president, as she did last year. “You work hard all your life, you do what’s right, and then they come after the little bit you’ve managed to put aside for your retirement age?” she said. “What kind of a Left-wing government is that?” …Since the spending ministries do not really want to make hard cuts, the only way — or so he thinks — is through more taxes.” The Laffer curve theory (too much tax kills tax revenue) does not seem to have made it to Bercy, the massive brutalist fortress built 20 years go to accommodate the finance ministry’s plethoric troops. …An unchecked French civil servant can think up some pretty outlandish tax ideas. …The beginning of the week saw Mr Hollande’s ratings plunge even lower than before, breaking records of unpopularity. Two separate polls have given him the worst ratings of any French president.

So let’s sum up all these articles. France is in the toilet, with a stifling fiscal burden, growing social unrest, and a deeply unpopular political class.

Does that sound like a nation that has been, in the words of Krugman, a role model of “fiscal responsibility”?

Krugman’s response would be that the French government still has the ability to borrow at very low interest rates, meaning that there is faith among international investors that the nation is well managed.

I must confess that this is a strong point. It’s possible to argue, of course, that the investors are wrong. After all, many investors thought Greece, Spain, Italy, etc, were in good shape before those nations suffered their fiscal crises.

My prediction, for what it’s worth, that France will suffer a fiscal crisis. As I’ve already admitted, I don’t pretend to know whether that crisis will start in 7 months or 7 years, but the underlying trend lines are unsustainable in the long run. This is a nation that violates my Golden Rule on a regular basis and that can’t end well.

P.S. To elaborate, I don’t think French politicians actually are plotting against their own country, just like I reject conspiracy theories that American leftists are deliberately trying to bring down the United States. Instead, what we’re witnessing is classic and predictable political behavior. Simply stated, politicians always have an incentive to buy votes with other people’s money and they very rarely are willing to engage in genuine reform until a crisis actually happens.

P.P.S. For those who think that it is “compassionate” for government to provide an extensive array of services, I’ll ask the same question I posed to a French audience earlier this year: Is there any evidence that the French government, which consumes 57 percent of the economy’s output, provides more and/or better services than the Swiss government, which accounts for only 34 percent of GDP?

P.P.P.S. I’ve written that Obama will never be able to make America as bad as France. But as this Michael Ramirez cartoon illustrates, that doesn’t mean he isn’t trying.

Read Full Post »

Caribbean Junkets: You Pay While Bureaucrats Play

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.

“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.

Read Full Post »

The Naval Versions of Reagan, Clinton, and Obama

Time for some weekend humor.

A friend sent me an example of three naval ships.

The first is an aircraft carrier named after Ronald Reagan.

Regular readers know I’m a big fan of the Gipper, and I’ve shared several inspirational Reagan videos (see here, here, and here). So I’m understandably appreciative of the USS Reagan.

Next, we have a ship named after Bill Clinton.

We’re obviously entering make-believe territory, and I would have preferred this joke to target Jimmy Carter because Clinton actually turned out to be a pretty good President. Or, to be more precise, we got reasonably good policy during the Clinton years.

In any event, I can certainly see the humor in this image.

Though I’m surprised there isn’t a reference to coed bunks.

Or interns.

Or cigars.

Or…well, you get the point.

By the way, if you like Bill Clinton humor, you can enjoy my favorites by clicking here, here, here, here, and here.

Last but not least, we have a new naval vessel that captures the Obama Administration.

I’m surprised there’s not also a reference to a website, but maybe this set of images was put together before the cluster-you-know-what of Obamacare.

To close, let’s share some more Obama mockery. We have this t-shirt, this Pennsylvania joke, this Reagan-Obama comparison, this Wyoming joke, this Bush-Obama comparison, this video satire, and this bumper sticker.

Read Full Post »

The Essence of Government, as Captured by Cartoons

I greatly admire the way some political cartoonists are able to effectively capture the essence of an issue.

And when it comes to government, I’ve always enjoyed the cartoons that portray the state as a blundering, often-malicious, overweight nitwit. You can see some of my favorite examples here, here, here, here, here, here, here, here, here and here.

But I don’t recall ever seeing a cartoon that manages to illustrate the real nature of politics.

Until now, that is. Enjoy this Glenn McCoy cartoon, which cleverly shows the attitude of Washington’s ruling class when confronted by ordinary citizens who band together to defend themselves from predatory politicians.

Glenn McCoy, by the way, had a very respectable showing in my poll allowing readers to pick their favorite political cartoonist. His top cartoon, on media bias, is funny on several levels.

Sticking with the topic of government, let’s also enjoy a Steve Kelley cartoon that was published back during the shutdown fight (which was the source of a lot of good humor). The cartoon is a bit dated, of course, but the “business as usual” line gives it an everlasting appeal.

Needless to say, the disastrous unveiling of Obamacare basically confirms the cartoon’s message, so it’s hard to know where satire ends and reality begins. It’s almost as if Obama is a Manchurian candidate. Except instead of being a socialist plant, as some conspiracy-minded conservatives seem to think, he’s actually a closeted libertarian who’s brilliantly waging a campaign to convince people to distrust big government!

Maybe I accidentally stumbled onto something when I joked back in 2010 that the Libertarian Party was going to name Obama its Man of the Year.

All joking aside, this poster has a very serious message, just like the above cartoons, and I encourage people to share it widely.

Read Full Post »

Big Government Redistributes Money from Ordinary Americans to Benefit Washington’s Gilded Class

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. 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.

Read Full Post »

Will Paul Ryan and GOP Budget Negotiators Snatch Defeat from the Jaws of Victory?!?

There’s a joke in Washington that Democrats are the evil party and Republicans are the stupid party.

Except this joke isn’t very funny since a lot of bad policy occurs when gullible GOPers get lured into “bipartisan” deals that expand government. Consider, for example, all the tax-hiking budget deals – such as the “read my lips” capitulation of the first President Bush – that enable more spending.

To be fair, sometimes Republicans are placed in a no-win situation. During the “fiscal cliff” discussions last year, Obama held the upper hand since he would get a huge automatic tax hike if nothing happened. So the final agreement, which resulted in a smaller tax increase, was actually better (or, to be more accurate, less worse) than I was expecting.

But in other cases, Republicans should prevail because they have the stronger hand. That’s the situation we’re in today with the automatic spending cuts known as sequestration.

The sequester, which resulted from the 2011 debt-limit fight, was an unambiguous defeat for Obama and a significant victory for advocates of smaller government. And it was a defeat for all the lobbyists, special interests, and crony capitalists that get rich when there’s more money in Washington.

Though I don’t want to exaggerate. The “cuts” merely reduce the projected growth of federal spending.

But after years of unconstrained spending by both Bush and Obama, any fiscal restraint is a welcome development. Indeed, the sequester helps to explain why we’ve seen two consecutive years of lower spending in Washington for the first time since the 1950s.

No wonder Obama is desperate to cancel sequestration, even to the point of making himself a laughingstock to cartoonists.

But maybe Obama will have the last laugh because some Republicans are negotiating with Democrats to undo some of the benefits of sequestration. Here are some excerpts from a Politico report.

…an agreement may not be so elusive after all. Hopes are growing that Ryan and Murray could reach a narrow deal to replace a portion of the automatic spending cuts known as sequestration, according to lawmakers and senior aides involved in the discussions. …On Tuesday, several key lawmakers and aides said there was about a 50-50 chance, if not better, that a small deal could be reached — a much better prognosis than many had anticipated. Murray said in an interview Tuesday that she’s in “very good conversations” with Ryan. “The goal here is to replace sequestration with responsible spending cuts and revenue,” Murray said.

I shudder to think what Senator Murray means by “responsible spending cuts.” Presumably gimmicks.

But we don’t need a vivid imagination to know what she means by “revenue.” The real question is why Republicans would be willing to “feed the beast” with more revenue, particularly when it means eviscerating the genuine spending restraint imposed by sequestration.

It even appears as if Republicans are willing to increase unemployment as part of a bad deal.

House and Senate appropriators are putting major pressure on Murray and Ryan… Revenue raisers being discussed include increased Transportation Security Administration fees… As an extra bargaining chip, Republicans would consider including an extension of extended unemployment benefits, which expire on Dec. 28. …Murray has made clear she won’t agree to any structural changes to Medicare or Social Security, particularly without significant revenue increases.

So let’s summarize this issue.

Current law is the sequester, which is a big victory.

The big spenders understandably want to eliminate or weaken the sequester, and would be especially happy to get more revenue coming to Washington.

Paul Ryan and the other Republican negotiators have the upper hand since the sequester continues if there’s no agreement.

So we have to ask ourselves why GOPers are even bothering to negotiate. There are two possible answers.

1. The “stupid party” joke actually is an accurate assessment of mental ability and Republicans are easy to trick because of their developmental challenges.

2. Republicans pretend to be fiscal conservatives when talking to voters but secretly want to enable more spending by sabotaging the sequester.

I’m actually being a bit unfair. What’s really happening is that there are divisions inside the GOP. A majority of the Republican caucus presumably understands that they hold a winning hand and they’re content to maintain current law and let the sequester continue.

But the Republicans on the Appropriations Committee tend to dislike the sequester since it reduces their ability to spend other people’s money in exchange for political support.

They correctly complain that America’s main fiscal problem is entitlement spending, so you can understand why they’re a bit irked that their programs are being restrained while boondoggles such as Obamacare are putting us deeper in a fiscal hole.

But that’s not an argument to waste money on so-called discretionary programs. Moreover, the appropriators are wildly wrong when they assert that appropriations spending already has been “cut to the bone.”

There are also some hawks who accurately complain that defense spending incurs a disproportionate share of the sequester, but they are wrong when they say this endangers national security. After all, defense spending still grows under sequestration and America will still account for nearly 50 percent of the world’s military spending.

So what’s the bottom line?

In an ideal world, policy makers would focus first on desperately needed entitlement reform. And I suspect many members of the Appropriations and Defense Committees would grumble a lot less about restraints on discretionary spending if real structural reforms to so-called mandatory programs were being implemented.

But we don’t live in that world. The sad reality of Washington is that genuine entitlement reform won’t happen with Obama in the White House. But that’s not an argument for surrendering on sequestration and allowing discretionary spending to climb at a faster rate.

Read Full Post »

Is Obama is “One of the Best Presidents Ever”?

While I’m critical of the overall design and impact of President Obama’s economic policy, I don’t have a partisan agenda and I’m willing to give the White House credit when it’s warranted.

I’ve pointed out, for instance, that Obama has increased spending at a slower rate than his GOP predecessor. That may be damning with faint praise since Bush was a big spender, but at least Obama didn’t open the money spigot in Washington even wider.

I also gave Obama some grudging praise for opposing a French tax harmonization scheme.

Heck, I even went out of my way to find something vaguely positive to say about Obamacare.

And I’ve shared some pro-Obama humor and even (sort of) defended Obama from the accusation that he’s a socialist.

So I think I have at least some ability to dispassionately judge (from a libertarian perspective) how President Obama ranks in comparison to others who have held the office.

I’m motivated to address this issue because several readers sent me an article in the Huffington Post that makes a rather remarkable claim.

Barack Obama is one of the greatest presidents America has ever seen. I believe history will prove this, and with time, he will be remembered in the annals of history as a revered revolutionary.

Even more amazing, the author wasn’t being satirical. He lists 12 specific reasons why he thinks Obama deserves high praise.

1. He is for The People. …2. He is for civil rights. …3. He is for one race – the human race. …4. He is for a healthcare system that brings hope and healing to the hurting. …5.  He is for the middle class. …6. He is for women’s rights. …7. He is for doing away with pomp and circumstance. …8. He is for the environment. …9. He is for veterans. …10. He is for peace. …11. He is for education. …12. He is for entertaining the masses.

If you click through and read the details, you’ll notice that the author almost never provides any details to back up his 12 reasons. He simply asserts that the President has good intentions.

Well, that probably true. But so what? I’m sure Jimmy Carter and Richard Nixon also had good intentions.

And when the author does provide details, they are very weak. Let’s look at a few specific claims.

We’re supposed to believe Obama “is for peace” because he was awarded a Nobel Prize immediately after taking office and before he did anything.

His actual record, for what it’s worth, has been to continue many of Bush’s policies and to pursue military intervention in Libya and Syria.

The author says Obama is “for the middle class,” yet that passage of the article doesn’t list a single policy, much less a specific accomplishment.

And there certainly wasn’t any effort to explain how an $8 trillion output gap and a seemingly permanent reduction in the employment-population ratio are good for ordinary people.

Moreover, if Obama “is for a healthcare system that brings hope and healing to the hurting,” then one might expect the author to reconcile that assertion with the fact that Obamacare is causing millions of people to lose their health insurance.

I’m also puzzled by the claim that the President “is for education.” This is the White House, after all, that was so intent on undermining opportunity for disadvantaged kids in Louisiana that even the Washington Post felt compelled to slam the Administration.

There’s no need to go through all 12 “reasons” before reaching the conclusion that there’s no way Obama deserves to be ranked anywhere near the top of the list for best Presidents.

And I’m not basing that on my own ideological preferences. If you want my opinion, Reagan and Coolidge are among the best (with an honorable mention for Bill Clinton) and FDR, Nixon, Wilson, and Hoover are near the bottom.

But even by non-ideological standards, it’s simply not credible to give Obama high marks.

P.S. If I had to guess, I suspect Obama would like to be another FDR. Fortunately, he won’t achieve that goal.

P.P.S. The assertion that Obama is “one of the best Presidents ever” is almost as silly as the claim that he is a conservative.

P.P.P.S. Since we’re comparing Presidents, I can’t resist sharing that the polling data showing that people would overwhelmingly vote for Reagan over Obama.

Read Full Post »

Some Jobs Are Bad Jobs, even in the Private Sector

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.

Read Full Post »

Obama Administration Urges More Unemployment

President Obama has presided over a terrible jobs market.

Unemployment is more than two-percentage points higher today than the White House claimed it would be if the so-called stimulus was enacted.

Even more worrisome, the employment-population ratio seems to have permanently fallen, which is bad news for economic performance since our output is a function of how much capital and labor is being productively utilized.

So what’s the response from the Obama Administration? Well, they want to further subsidize people for not working.

I’m not joking. Here’s some of what has been reported by the Huffington Post.

The Obama administration on Friday came out strongly in support of extending long-term unemployment insurance past its current expiration date. …”We have always done so when unemployment is this high and would make little sense to fail to do so now when we are still facing the burdens of the worst downturn since the Great Recession,” [Obama economic adviser Gene] Sperling said. “It is high bang for the buck for the economy, reduces poverty and helps workers who lost jobs due to no fault of their own get back on their feet.”

But is it true that providing more unemployment benefits is an approach that “helps workers”?  In their academic writings, both Paul Krugman and Larry Summers have pointed out that you get more unemployment when you subsidize joblessness.

And research by Professor Casey Mulligan also has found a very clear link between government benefits and unemployment. If you’re still not convinced, here’s some more empirical evidence showing that you get more joblessness when you subsidize leisure.

And now we have even more evidence showing that it doesn’t make sense to make leisure more attractive than employment. Four economists conducted some new empirical research to look at how unemployment benefits impact economic performance in the labor market. First they explain the theoretical concerns.

Unemployment in the U.S. rose dramatically during the Great Recession… The policy response involved an unprecedented extension of unemployment benefits with benefit duration rising from the usual 26 weeks to as long as 99 weeks. …The effectiveness of this policy response was questioned by Barro (2010) and Mulligan (2012), among others. Because unemployment benefit extensions represent an implicit tax on market work, they subsidize unemployment and discourage labor supply. …Everything else equal, extending unemployment benefits exerts an upward pressure on the equilibrium wage. This lowers the profits employers receive from filled jobs, leading to a decline in vacancy creation. Lower vacancies imply a lower job finding rate for workers, which leads to an increase in unemployment.

Then they report their findings, including the remarkable result that the bulk of poor employment numbers in recent years are the result of extended unemployment benefits.

Our empirical strategy exploits a policy discontinuity at state borders to identify the effects of unemployment insurance policies on unemployment. …We explicitly control for the effects of other policy changes at the state level (that could be correlated with the expansion of unemployment benefit durations) to ensure that our estimates isolate the effects of unemployment benefit extensions. …We find that unemployment rises dramatically in the border counties belonging to the states that expanded unemployment benefit duration as compared to the counties just across the state border. The quantitative magnitude of this effect is so large that our estimates imply that benefit extensions can quantitatively account for much of the unemployment dynamics following the Great Recession.

Some Keynesians argue that unemployment benefits are nonetheless good for the economy because of the impact on aggregate demand. But even if you believe Keynesian theory, the authors find that unemployment benefits don’t help because of the offsetting foregone income resulting from fewer jobs.

…an increase in unemployment due to benefit extensions is similar in magnitude to the decline of employment. Thus, the total effect on spending is ambiguous as extending benefits increase spending by the unemployed but at the same time decrease spending as fewer people are employed.

So what’s the bottom line? Simply stated, we need some tough love. There needs to be a limit on unemployment benefits so that companies will have more incentive to create jobs and so that unemployed people will have more incentive to get off the couch and find a job.

I’ve made this point during television interviews, but I suspect that many people will find this Michael Ramirez cartoon more compelling and convincing. In any event, it’s more entertaining.

And we definitely can’t overlook this superb Wizard-of-Id parody. It doesn’t focus on unemployment benefits, but it makes a great point about labor supply incentives in a very amusing fashion.

But let’s close on a serious note. Comparing data from the United States and Europe also shows that government policy has a big impact on the labor market. And if you prefer anecdotes, check out this story from Michigan and this example from Ohio.

P.S. At least the President is consistent. He also is pushing another policy that would increase unemployment.

Read Full Post »

Obamacare, Schadenfreude, and the Joy of Just Deserts*

I’ve periodically used “Schadenfreude” to describe my feelings about certain issues.

“Time for another tax hike!”

Maybe this makes me a bad person, but I’ve openly admitted to a perverse sense of happiness at the misfortune of others when, for instance, France’s class-warfare tax policy backfired because successful taxpayers emigrated.

And I’ve expressed similar amusement when writing about Europe’s fiscal crisis and the whining of statist politicians.

But the Obamacare disaster gives me a steroid-fueled feeling of Schadenfreude. As a matter of fact, we need to augment that term with another phrase just to capture what’s happening.

So what’s a good option? Well, according to Wikipedia, “Desert /dɨˈzɜrt/ in philosophy is the condition of being deserving of something, whether good or bad.”

That’s where we get the phrase “just deserts,” and that’s exactly what Obamacare supporters are getting as their cherished scheme for government-run healthcare blows up in front of our eyes.

I’m not the only one who is enjoying this moment in history. Here’s some of Jonah Goldberg’s unabashedly snarky column in National Review.

To paraphrase Oscar Wilde, you’d have to have a heart of stone not to laugh at the unraveling of Obamacare. …If you can’t take some joy, some modicum of relief and mirth, in the unprecedentedly spectacular beclowning of the president, his administration, its enablers, and, to no small degree, liberalism itself, then you need to ask yourself why you’re following politics in the first place. Because, frankly, this has been one of the most enjoyable political moments of my lifetime. …Indeed, not since Dan Rather handcuffed himself to a fraudulent typewriter, hurled it into the abyss, and saw his career plummet like Ted Kennedy was behind the wheel have I enjoyed a story more.

Isn’t that a marvelous excerpt, particularly the comment about the “beclowning of the president”?

But Jonah’s just getting started.

In every tale of hubris, the transgressor is eventually slapped across the face with the semi-frozen flounder of reality. …in the modern era, comeuppance-for-the-arrogant is more often found in comedies, and the “rollout” of Healthcare.gov has been downright hilarious. …Indeed, the whole law is coming apart like a papier-mâché yacht in rough waters.

I don’t even know what “orcs” are, but this next passage does a very good job of nailing Obama for arrogantly refusing to negotiate when the President probably had the most to gain from a delay!

During the government shutdown, Barack Obama held fast, heroically refusing to give an inch to the hostage-taking, barbaric orcs of the Tea Party who insisted on delaying Obamacare. …But we didn’t know something back then: Obama desperately needed a delay of Healthcare.gov. In his arrogance, though, he couldn’t bring himself to admit it. The other possibility is that he is such an incompetent manager, who has cultivated such a culture of yes-men, that he was completely in the dark about the problems. …This is how you know we’re in the political sweet spot: when the only plausible excuses for the administration are equally disastrous indictments.

Jonah also has some great commentary about the role of other Administration flunkies.

The president may now claim that he knew nothing, but he must have wondered why Henry Chao, Healthcare.gov’s chief project manager, set the bar of success at sea level last March: “Let’s just make sure it’s not a Third World experience.” At this point, it could only be more of a Third World experience if Healthcare.gov required enrollees to pay with chickens. …every day Jay Carney looks even more like a little boy who put on his dad’s suit. You have to wonder what goes on in his mind, as a former journalist, when he tells his former colleagues that “the American forces have been completely destroyed with minimal Iraqi casualties.” (Oh, wait, that was Baghdad Bob. I get them confused.) And what about Dan Pfeiffer going on the Sunday shows to insist that no American should believe his or her lying eyes? …the website will get better. It could hardly get worse, short of a finding that it causes irritable bowel syndrome.

Speaking of Jay Carney, Jonah says that the President’s spokesman has reached the point where “the musky stench of fear, sweat, and urine wafting from the podium makes it hard for all but the true believers to put much stock in his words.”

Jonah then makes the very serious point – in a very amusing way – that Obamacare was deliberately designed so that millions of people would lose their old coverage.

Five million people — and counting — have lost their health insurance, despite the president’s years of “you can keep your plan” promises. The president has apologized, sort of. He says he’s “sorry” that people have found themselves in a bad situation because of “assurances” he made. But no one has lost their insurance because of the president’s assurances, they’ve lost their insurance because of the president’s law. If a captain has the lifejackets filled with cement, his assurance that “you can keep your lifejacket” is only half the crime.  Obama knew the lifejackets wouldn’t work. …Millions more will eventually lose the insurance they like because of Obamacare, according to the administration’s own internal estimates. The cancellations aren’t a bug, they’re a feature, and the president lied about it over and over again.

So what’s the bottom line? Jonah is reveling in the moment.

…as a political and ideological matter, this is beyond fantastic. For years we’ve been told that Democrats were more “reality-based,” that “facts have a liberal bias,” in the words of Paul Krugman, and that if they could just have their way, they could fix all of our problems. No one represented this arrogant promise more than Barack Obama himself. But, with an irony so rich it would be made of Corinthian leather if it was a car seat, the only way he could get his signature legislation passed was to baldly and brazenly lie about it, over and over and over again. He created a rhetorical cloud castle where no one would lose his insurance, every family would save thousands of dollars, and millions of the uninsured would suddenly get coverage. Anyone who doubted this was called a fool or a liar, or even a racist.

Let’s add to our amusement with some cartoons, starting with one from Glenn McCoy.

Next is one from Michael Ramirez.

We’ve already seen some humor with that theme, but I wanted to share the Ramirez cartoon because he does such a great job capturing Obama’s imperious demeanor.

Next we have Nate Beeler who makes a very serious point in a very funny manner.

Eric Allie shows how the President’s lapdogs are trying to rationalize this train wreck.

Last but not least, Henry Payne summarizes the website mess while suggesting that’s just the tip of the iceberg.

If this hasn’t exhausted your interest in Obamacare humor, you can enjoy various cartoons, videos, and jokes by clicking here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, here, and here.

*Several people have asked whether it should be “just desserts.” That was my initial inclination, but I went with the single-S approach based on Wikipedia. Suffice to say, I’m not sure which approach is correct and I’ve certainly made mistakes before. But if this is a goof on my part, at least it’s a lot smaller than the $16 trillion error I made on national TV.

Read Full Post »

The Continuing…and Continuing…Obamacare Disaster

When I wrote a few days ago about the “Continuing Obamacare Disaster,” I didn’t realize I was understating the problems with the President’s boondoggle scheme.

Now that the law’s been passed and implemented, the American people are finally finding out what’s in it (per Nancy Pelosi) and they’re not happy.

Indeed, they’re so unhappy that our overseers in Washington are scrambling to mitigate the political fallout.

The Wall Street Journal opined today on the meaning of President Obama’s announcement.

In a major political reversal, the President announced at a surprise press conference that he is suspending the regulations that he now admits are the reason that millions of health insurance plans have been terminated. …Now these mass cancellations are proving to be unpopular, and Democrats are panicking, so Mr. Obama is offering a temporary stay of execution.  …There is less reprieve here than Mr. Obama claims. It’s hard to un-cancel insurance. The rules Mr. Obama is repudiating were written in 2010, and insurers have been adapting to them for years. They will now have to scramble to revive the policies they can while throwing all of their actuarial assumptions out the window. The faux reprieve also lasts for only one year and applies only to anyone who was covered in 2013.

But even that’s not the full story. Here’s more of the editorial.

The burden will also now fall on state insurance commissioners to decide if they want to try to reapprove old plans, or something similar to the outlawed products. But even the insurers that want to exercise this option will need to resuscitate plans in a mere six weeks. The first they heard about the President’s “fix” was at the press conference. …Such regulatory rewriting is also probably illegal. The Administration claims it has “enforcement discretion” to suspend the regulations. But like the employer mandate Mr. Obama also delayed for a year, their hard start-dates are defined in the statute—January 1, 2014. The black-letter law of the Affordable Care Act does not say the rules apply whenever they are politically convenient.

Megan McArdle also thinks the White House is brazenly disregarding legal requirements.

The administration is not changing the rules, just declining to enforce them against the insurers. This is becoming a pattern: Obama’s position on the law seems to be that it’s his law, and therefore the law is whatever he and his appointees say it is. That’s dangerous for all sorts of reasons.

I’ll be less polite and say that the President is acting like America is a banana republic and he’s the tinpot dictator who can arbitrarily decide the law.

Keep this going and we’ll eventually be Argentina.

Though maybe this isn’t a bad thing. If I can somehow magically become President, I can use the Obama precedent to suspend bad tax law and to unilaterally decide to shut down a bunch of wasteful government departments.

Returning to the real world, Veronique de Rugy gives us a very important reminder in the Washington Examiner that this mess was entirely predictable because of the inherent incompetence and inefficiency of government.

Washington is missing the bigger picture of what the rollout glitches represent. That’s the much deeper problem of government intervention in general. …government-program incentives tend to favor interest groups instead of rewarding success or punishing failure in the same way as the market. …In sum, the problem with the Obamacare rollout is…that government institutions themselves are inherently prone to bad decision-making, often choosing the interest of politically favored groups. …In fact, we can expect these types of negative consequences when the government intervenes in any market — not just health care. For proof, look no further than the flawed government policies that distorted the health care system and prompted the push for Obamacare in the first place.

The final sentence is spot on. Our healthcare system was dysfunctional when Obama took office. But it was screwed up because of government intervention. So Obama’s plan to add another layer of government was a very painful example of Mitchell’s Law.

In reality, you don’t solve government-caused problems with more government.

But this brings us to the big issue of what happens next. The statists will argue that the failure of Obamacare means we need single payer healthcare, which means the government has full control of everything, like in the United Kingdom.

Needless to say, that would be a disaster. More spending and more taxes would be one obvious consequence, but it would also mean that politicians and bureaucrats would decide who lives and who dies. If you think that’s an exaggeration, check out this horror story (as well as the other examples linked in the third paragraph).

For those of us who care about both taxpayers and good healthcare, we need to use the Obamacare meltdown as a springboard to push for policies that will actually make the system work better.

I actually wrote back in April that Obamacare wouldn’t work and that this would create precisely this opportunity. But making a prediction is the easy part (especially since I never remind people of the times when I make inaccurate predictions). The hard part is pushing the right policies and convincing the American people that we have the right ideas.

I’m a think tank wonk, so I’ll simply list the good policies.

As part of fundamental tax reform, we need to phase out the healthcare exclusion in the tax code – a perverse policy that encourages grotesque waste, inefficiency, and featherbedding in most parts of the medical industry.

We also should reform Medicaid and Medicare to help address the part of the third-party payer crisis caused by the direct government intervention.

If you want to get an idea of how a genuine market-based system would operate, watch this superb video from Reason TV. If you want more examples, here’s a report from North Carolina on free-market healthcare in action and here’s a similar story about capitalist healthcare in Maine.

Read Full Post »

Economic Growth Is the Best Way to Help the Poor, not Redistribution in Pursuit of Coerced Income Equality

Switzerland’s left-wing party has instigated a referendum for November 24 that asks voters to limit pay ranges so that a company wouldn’t be able to pay top employees more than 12 times what they’re paying their lowest-level employees.

I talked with Neil Cavuto about this proposal and made several (hopefully) cogent points.

Since Swiss voters already have demonstrated considerable wisdom (rejecting a class-warfare tax proposal in 2010 and imposing a cap on government spending in 2001), I predicted they will reject the plan. And I pointed out that Switzerland’s comparatively successful system is a result of not letting government have too much power over the economy.

But I don’t want to focus today on the Swiss referendum. Instead, I want to expand on my final point, which deals with the misguided belief by some on the left that the economy is a fixed pie and that you have to penalize the rich in order to help the poor.

I’ve covered this issue before, and I even tried to educate a PBS audience that economic growth is key.

But maybe this chart is the most persuasive bit of evidence. It shows per-capita GDP in France and Hong Kong over the past 50 or so years. France is a nation that prides itself of redistribution to “help” the poor while Hong Kong is famous for having the most economic freedom of any jurisdiction.

Now look at this data and ask yourself whether you’d rather be a poor person in France or Hong Kong?

Since Hong Kong is richer and is growing faster, the obvious answer is that poor people in France almost surely face a bleaker outlook.

In other words, the welfare state can give you the basic necessities and allow you to survive (at least until the house of cards collapses), but it comes at a very high cost of lower growth and diminished opportunity.

The moral of the story is that prosperity is best achieved by a policy of free markets and small government.

P.S. If you want more evidence on the superiority of markets over statism, check out the comparison of South Korea and North Korea and the difference between Chile, Argentina, and Venezuela. Heck, even the data comparing America and Europe show similar results.

P.P.S. As you might expect, Margaret Thatcher addressed this issue in a brilliant fashion.

P.P.P.S. There’s a lot to like about Sweden, but click here if you want to see an impossibly absurd example from that nation of the equality-über-alles mentality.

P.P.P.P.S. There is some very interesting academic research that suggests humans are hard-wired by evolution to be statists. Let’s hope that’s not true.

Read Full Post »

The Oleaginous Interaction of Sex and Obamacare

When I talk about people being “screwed” by Obamacare, I’m generally referring to taxpayers who will bear a heavier fiscal burden and consumers who will pay more to get less.

But maybe we need to use a more elastic definition because some Obamacare proponents are using sex as a selling point to trick young people into buying over-priced insurance through exchanges.

Chris Moody of Yahoo! News reports that subsidized birth control is the focus.

From the folks who brought you the “brosurance” campaign that promotes the affordable care act comes a new line of ads aimed at reminding young women the new law will subsidize their birth control. The online ads were created by two nonprofit groups, the Colorado Consumer Health Initiative and Progress Now, to encourage young people to enroll in the exchanges.

And the ads are not exactly subtle. Here’s an example, presumably modeled after the “got milk?” campaign.

As an unmarried male, I theoretically should support anything that makes females easier to obtain, but instead this ad campaign is disconcerting on several levels.

1. I don’t like government either promoting sex or discouraging sex. Simply stated, it’s not their business. Though if some group wants to discourage sex by making it less enjoyable, then linking it to government might work like magic.

2. I don’t like the absurdity of using insurance for routine medical expenses. We don’t use auto insurance for oil changes and we don’t use homeowner’s insurance to repaint the dining room. The same principle should exist for health insurance, with policies only covering large and unexpected bills. That’s how a genuine market works, but Obamacare will take us farther down the path of third-party payer, which means more inefficiency and rising costs.

3. And I don’t like Obamacare, so it goes without saying that don’t like anything of the law’s features. The one time I wrote something nice about Obamacare, I included so many caveats that I’m pretty sure I preserved my anti-Obamacare virginity.

But it’s not just the Colorado Obamacare exchange that is linking sex with Obamacare. The private sector also is getting involved.

Sugar daddies are using government-run healthcare to go after young women.

Here’s a blurb from a report by the local CBS station in Dallas.

The online dating website Seeking Arrangement is launching the new campaign in Dallas, targeting young and healthy women who are now set to pay higher health insurance premiums under the recently launched Affordable Care Act. The new law is projected to increase insurance prices by an average of 41 percent next year, the website states. They want to offer women a “sweeter” plan. Seeking Arrangement suggests that women use their service to connect with a “sugar daddy” who can offset some of the new healthcare related costs. The website has earned a reputation for urging female college students and single mothers to meet men who are willing to offer money and expensive gifts for companionship.

The website is even posting a billboard.

As I wrote above, I don’t think it’s government’s job to interfere with the decisions of consenting adults regarding sex. But I’m old-fashioned enough to think that it’s wrong if the government makes the healthcare system so convoluted and expensive that young women are encouraged to seek out rich older men merely to deal with the higher costs of Obamacare.

Some readers may joke that I might feel differently if I was rich rather than merely old, but we libertarians are a purist bunch. I don’t want to benefit from state intervention. Heck, I’ve already said I’d be happy to get rid of the mortgage interest deduction in the tax code, even though I’m a beneficiary.

P.S. Since we’re on the topic of sex and government-run healthcare, here’s what Mark Steyn wrote about pornography and government-imposed health rules.

P.P.S. Don’t forget that Obamacare allows taxpayer-financed Viagra for sex offenders.

P.P.P.S. And I’m sure we’re all delighted that the government wants a database about our sex lives.

P.P.P.P.S. Our British cousins already link healthcare and sex, with government-provided breast augmentation as well as taxpayer-financed sex trips to Amsterdam.

P.P.P.P.P.S. Remember Sandra Fluke, the 30-yr. old college student who whined that birth control wasn’t being subsidized? Well, you can remember her ignoble role and enjoy some laughs with this great Reason video, this funny cartoon, and four more jokes here.

Read Full Post »

The Rise (and Upcoming Fall) of the Welfare State in the Western World

I routinely (some would say repetitively) argue that the burden of government spending is a drag on the economy because labor and capital are being misallocated via the political process.

My message is that we need to reduce the size of the public sector, even if we do it in a very gradual way by imposing some sort of spending cap that fulfills the Golden Rule requirement of having government grow slower than the productive sector of the economy.

That being said, a modest short-run agenda doesn’t mean we shouldn’t have bold long-run goals.

So while I’m glad the Tea Party has helped restrain government spending in the past two years, that’s just an interim step.

And I’m all in favor of bringing federal government spending back down to about 18 percent of GDP, which is where it was when Bill Clinton left office.

But why stop there? Wouldn’t it be better to dramatically shrink the public sector?

That approach certainly would be consistent with what our Founders wanted and with the first 150 years of our nation’s history.

I shared some remarkable data last year showing that the public sector used to be very small. Not just in the United States, but other nations as well.

Indeed, government spending (at all levels) consumed less than 10 percent of economic output in the world’s leading nations in 1870. And even as late as 1913, the public sector only consumed an average of about 12 percent of GDP in those major western nations.

So why has government become much larger in the past 100 years? The answer, as shown by this remarkable chart prepared by Vito Tanzi, the former Director of Fiscal Affairs at the International Monetary Fund, is that the welfare state has exploded.

As you can see from the table, there was almost no welfare state at the beginning of the 1900s, and redistribution spending was minimal even as late as 1930.

But welfare-state outlays, referred to as “social transfers” in the table, have ballooned over the past eight decades. And if you’re a glutton for bad news, you should also understand that BIS, OECD, and IMF data predict major long-run troubles because entitlement programs are going to become an even bigger burden in the future.

In other words, we’re already in a deep hole because the welfare state has radically expanded, and that hole will become much deeper in almost all nations in the absence of genuine entitlement reform and effective caps on so-called discretionary spending.

Fortunately, we can make progress. Perhaps not in the next couple of years with Obama in the White House, but spending caps and entitlement reform are possible at some point in the near future.

Simply stated, the ongoing fiscal crisis in Europe is causing more and more people to understand that we can’t remain on the current path.

Our ultimate goal, however, should be shrinking government even further by restoring the Constitution’s limit on the size and scope of the federal government.

Maybe I’m a Pollyanna, but I’m glad to be at the Cato Institute where I can strive every day for this vision of a freer and more prosperous America.

P.S. We should undo the welfare state not only because that reform would be good for taxpayers, but also because the so-called War on Poverty is bad for poor people. Redistribution creates long-run dependency because of a poverty trap that makes it more difficult to climb the economic ladder. If we really want to help the less fortunate, private charity does a far better job – and Americans (unlike Europeans) still have the genuine compassion that exists when you spend your own money.

P.P.S. If you want a humorous look at genuine compassion, Libertarian Jesus has some wise advice.

Read Full Post »

The Continuing Obamacare Disaster

You know things are going poorly for the Obama White House when even the New York Times is writing about the “third world experience” of Obamacare.

Heck, it’s almost gotten to the point where I feel sorry for the President.

But I guess I must be a mean-spirited anti-government ideologue, because I can’t stop myself from mocking the President’s ill-fated healthcare scheme. Whether I’m sharing funny cartoons or sarcastic videos, I can’t resist the temptation to kick Obamacare while it’s down.

In this spirit of love and togetherness, let’s take a look at some recent news about the law.

McClatchy News has a big expose that reveals the magnitude of the President’s if-you-like-your-insurance-you-can-keep-it prevarication. Let’s review a couple of excerpts from the story, beginning with a comparison of the President’s promise and the staggering revelation that as many as 52 million Americans may have the rug pulled out from under them.

Even as President Barack Obama sold a new health care law in part by assuring Americans they would be able to keep their insurance plans, his administration knew that tens of millions of people actually could lose those their policies. …report in 2010 said that as many as 69 percent of certain employer-based insurance plans would lose that protection, meaning as many as 41 million people could lose their plans even if they wanted to keep them and would be forced into other plans. Another 11 million who bought their own insurance also could lose their plans. Combined, as many as 52 million Americans could lose or have lost old insurance plans.

Amazingly, the President continues to be truth-challenged.

Obama insisted anew Thursday that the problem is limited to people who buy their own insurance. “We’re talking about 5 percent of the population who are in what’s called the individual market. They’re out there buying health insurance on their own,” he told NBC. But a closer examination finds that the number of people who have plans changing, or have already changed, could be between 34 million to 52 million. That’s because many employer-provided insurance plans also could change, not just individually purchased insurance plans.

Now let’s examine an example of what this means. The Weekly Standard reports on what has happened to some citizens from flyover country.

In North Dakota, only 30 people have so far signed up for Obamacare. Meanwhile, 35,000 people have already or will be losing their existing health insurance plans in that state alone.

But that’s not the only bad news for the President’s statist healthcare scheme.

It seems that Obamacare is a gold mine for crooks and con artists. Let’s look at parts of a New York Times story.

To the list of problems plaguing President Obama’s health care law, add one more — fraud. …State and federal authorities report a rising number of consumer complaints, ranging from deceptive sales practices to identity theft, linked to the Affordable Care Act. …Some level of fraud or abuse is predictable with any big government program… But now, the technical failures troubling the HealthCare.gov website, as well as the law’s complexity, threaten to make matters worse. …Authorities warn that in some cases the come-ons are merely a ruse to get people to divulge sensitive Medicare and banking information. …Medicare has also long been a magnet for swindlers, thanks to its sheer scale and complexity. The troubled rollout of the new health care law has amplified the problem.

By the way, this story doesn’t even mention the possibility and risk of hackers and identity thieves breaking into the massive government databases that will be created as a result of Obamacare.

And if you’ll allow me to briefly digress, the same danger exists if politicians create the huge tracking-and-monitoring database that would be necessary if state politicians get the authority to tax out-of-state Internet sales.

Returning to the topic of Obamacare, it’s also worth noting that the growing burden of taxes and spending isn’t part of the aforementioned stories. Yet can there be any doubt that the program’s failures will lead to even more spending?

Not that any of us should be surprised. That’s almost always been the case when politicians create new entitlement programs. Indeed, I would pat myself on the back for making exactly this predication about Obamacare, but anybody with a room-temperature IQ knew this would happen, so I can’t claim any special insight.

But this does give me a reason to share this new Lisa Benson cartoon.

Needless to say, I’m enjoying the ongoing Obamacare disaster. But not just for reasons of Schadenfreude. The cluster-you-know-what of Obamacare is good news because it increases our chances of repealing the law in a few years (just as I predicted back in April).

But not just our chance to repeal Obamacare. We may actually have a chance to deal with the larger government-caused problems in our healthcare system, all of which lead to third-party payer and undermine the efficiency and low costs that exist when there is a genuine free market.

Read Full Post »

Obamacare and other Jokes

Time to laugh at the clowns in Washington. And nothing is more amusing than the cluster-you-know-what known as Obamacare. Here’s Gary Varvel’s amusing assessment.

Today, though we’re going to focus on the one-liners from the nighttime talk shows.

We’ll start with our favorite closet libertarian, Jay Leno

• President Obama’s approval rating is down to 39 percent. And Toronto Mayor Rob Ford, who admitted to smoking crack cocaine, went up to 49 percent. How does this make Obama feel? He’d be better off smoking crack than passing Obamacare.
• Did you all turn your clocks back an hour over the weekend? It is easy to remember “spring ahead, fall back.” It’s like trying to log on to Obamacare. You spring ahead, make a little progress, then you fall back.
• NSA leaker Edward Snowden got a new job in Moscow. Not only that, but he was also able to sign up for “PutinCare.”
• It’s really trick-or-treat time at the White House. President Obama tricked us into thinking we’d be able to afford treatment.
• Con artists are using Obamacare confusion to sign people up for fake health insurance. The scammers lure victims with false promises like, “If you like your healthcare plan, you can keep your healthcare plan.” The scammers will tell you that, so you have to be careful.
• According to a new report, more than 700 fake Obamacare websites have been created. Security experts say it’s simple to identify the phony sites because they are easy to log on to.
• The Obamacare website is not the only one crashing. The NSA website went offline Friday after suspected hackers broke into it. Hey, NSA: It’s not so much fun when people are sneaking into YOUR computer, is it?
• Some marketing experts are comparing the Obamacare website rollout to a Ford Edsel filled with New Coke. But they are making progress. They said today that if you find yourself getting too frustrated trying to log on, they’ve added a link to a suicide hot line.
• What the president should do is put the NSA in charge of the website. That way there’s nothing to fill out. They already have all our information. You just put your name in.
• Consumer Reports is now recommending that people sit back and wait a few weeks until the government fixes the problems. Really, a few weeks? When was the last time the government fixed anything in a few weeks? We still have troops in Korea, OK?
• A 25-year-old man in New York was arrested for trying to join al-Qaida. Here’s the amazing part: He said it was easier to join al-Qaida using their website than it was to sign up for Obamacare.
• Today there were more problems with the Obamacare website. It seems when you type in your age, it’s confusing because it’s not clear if they want the age you are right now, or the age you’ll be when you finally log in.
• Here’s my favorite part: The president said yesterday that if it’s taking too long you can bypass the website and enroll by mail. Only the federal government could come up with a website that’s slower than sending something by mail.
• It was kind of a rough day today. A friend of mine was given six months by his doctor — not to live, to sign up for Obamacare.

Lots of good Obamacare humor to add to our collection.

David Letterman seems a bit too deferential to Obama, but he has a few good jokes, and his jab about non-essential bureaucrats reminds me of these great MacNelly cartoons.

• Anybody try to sign up for Obamacare? It’s impossible, and everybody’s furious. The Republicans are upset about Obamacare because something they tried to stop now won’t get started.
• Obama said they’ve had some glitches with the Affordable Care website. I’ll tell you something. If you order a pair of pants online and they send you the wrong color, that’s a glitch. This is like a Carnival cruise, for God’s sake!
• We seem to be getting along just fine without a government during the shutdown. I just pray that when the shutdown is over, all nonessential employees — about 800,000 of them — will be back at their nonessential jobs.

Here are some jokes from Conan. I’m amused by the one comparing the popularity of politicians and lice. Reminds me of the results of this 2010 poll.

• The new mayor of New York City is a progressive Democrat with an African-American wife who used to be a lesbian. Or as Fox News reported, the apocalypse is upon us.
• New Jersey re-elected Governor Chris Christie. Or as Christie put it, “I came back for seconds.”
• There’s been a lot of speculation but now it’s clear that Joe Biden will run for president in 2016. In an effort to appear presidential, today Biden launched a website that doesn’t work.
• The popularity of Congress is at an all-time low, according to a recent poll that says Americans like head lice more than they like Congress. But you know, I think the real story here is that some Americans like head lice.
• As of today, same-sex marriages are now legal in New Jersey. And today New Jersey governor Chris Christie announced he would no longer oppose gay marriage. He said, “How can I oppose anything that brings more cake into New Jersey?”

We’ve just enjoyed a joke involving lice, so it’s appropriate that we now go the talk show host who gave us a great bedbug joke. Hare are some Craig Ferguson jokes one-liners.

• President Obama is still in trouble for this spying stuff. You can tell he is getting tired of talking about this scandal. Today he said, “Anyone want to talk about my birth certificate?”
• This morning Joe Biden personally greeted government employees who’d been out of work during the shutdown. Haven’t those people suffered enough?
• Because of the government shutdown, the White House is under attack — by squirrels. They’ve invaded the White House garden because the gardeners were laid off. Michelle Obama planted a garden to show how easy it is to grow your own food. All you need is water, sunlight, and 50 full-time federal employees.

This Jimmy Fallon joke is funny and it reminds me of a very serious point about why we should be at least quasi-optimistic about deep-sixing the Obamacare turkey.

• Only 12 percent of Americans think the rollout of Obamacare is going well, while 100 percent of Republicans think the rollout of Obamacare is going GREAT.

Last but not least, here are a pair of Jimmy Kimmel jokes.

• In San Francisco, Apple unveiled its new products. Apple said, “This iPad is the fastest and most vivid way to not be able to log on to the Obamacare website.”
• The government shutdown officially ended last night. Should we be happy the government is back? I feel like my sister got back together with an abusive boyfriend or something.

The part about whether we should be happy with a re-opened government is right on the mark. I was only half-joking when I suggested we should just leave it closed.

Let’s close with a very good image of a new Mount Rushmore.

Seems like Jimmy Carter belongs in that cartoon, but I guess he doesn’t have any famous lines to parody. In any event, this isn’t the first time we’ve featured Mount Rushmore in some humor. Click here to see another way Obama could (sort of) get recognized.

Read Full Post »

The European Crisis (and American Future?) of too Many Over-Compensated Bureaucrats

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.

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.

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.

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.

Read Full Post »

Obamanomics and the Vanishing American Worker

The Department of Labor has issued its monthly employment report and the item that will attract the most attention is that the unemployment rate marginally increased to 7.3 percent.

That number is worthy of some attention, but I think it distracts attention from a far more important set of data. What we should be more worried about is the overall supply of employed workers.

I don’t want to sound like a boring economist (is there any other kind?), but our economic well being is a function of what we produce, and and what we produce is a function of the amount of labor and capital that is being productively utilized. We economists use jargon about “factors of production,” but what we’re really trying to say is that our living standards depend on good jobs and wise investment.

Which is why the most depressing bit of data from the Labor Department isn’t the unemployment rate. We should be far more worried about the employment-population ratio.

Here’s a chart based on DOL data showing the percent of the working-age population that is employed (click here to see the Labor Department’s explanation of this variable). As you can see, that key number used to be close to 63 percent. Now it’s down close to 58 percent.

To be fair, this isn’t all Obama’s fault. Not even close.

The big drop occurred at the end of the Bush years. Some of that drop was cyclical, caused by the recession. And some of it was presumably the cumulative impact of Bush’s big-government policies.

But what’s noteworthy is that the recession has been over since mid-2009 and the employment-population ratio hasn’t improved. And that’s something that we can blame in part on Obama.

It’s not just cranky libertarians who worry about this trend in the employment data.

William Galston of the Brookings Institution shares some very disturbing numbers in a Wall Street Journal column about the decline in labor force participation in the United States.

The great American jobs machine is faltering, and it is time for Washington to pay attention. Participation in the workforce is falling, the pace of job creation is anemic, and long-term unemployment remains stubbornly high. …the United States was once viewed as the home of the “employment miracle.” As recently as 1989, it was a leader in labor-force participation and employment rates among the world’s most developed economies. That is no longer the case. …When we consider prime-age workers age 35 to 54—past the period of extended education that success in the 21st century economy so often requires—the comparison looks even worse: Average participation rates in the 16 comparison countries are four to six points higher than they are in the U.S. Last year, the U.S. ranked in the bottom third for women, and dead last for men. …prospects for robust growth and shared prosperity are dim unless we can devise more effective labor-market policies.

I suspect Galston and I would only partly agree on “effective labor-market policies,” but I think a big part of the answer is smaller government and less intervention.

If we want more jobs, we need to make it more profitable for employers to create jobs. And, as this very clever cartoon parody indicates (and also as shown in this great Chuck Asay cartoon), we need to make it more attractive for people to get back in the job market.

Let’s conclude by returning to the data on the unemployment rate. I don’t think it’s particularly newsworthy that the joblessness rate crept up by a small amount. Any single month of data, after all, might be a statistical blip.

However, I can’t resist pointing out that today’s unemployment rate is still more than two percentage points higher than the White House claimed it would be if we enacted the failed stimulus.

Here’s an updated version of the chart showing the gap between what the Obama Administration promised and what’s been delivered.

Yup, good old Keynesian economics. Over-promising and under-delivering ever since the failed policies of Hoover and Roosevelt.

P.S. At least one liberal recognizes the dangers of government-subsidized dependency.

Read Full Post »

New York City Is About to Become New France

We know that countries suffer when taxes get too high, in part because investors, entrepreneurs, and other successful taxpayers escape to jurisdiction with less oppressive fiscal regimes. France is a glaring example. On steroids.

We know that states also suffer when the tax burden becomes to onerous, leading to an exodus of jobs and investment. California and Illinois are case studies of this self-destructive practice.

But it’s especially foolish for state governments to over-tax because it’s relatively easy to move from one state to another. Escaping a high-tax nation, by contrast, is a much costlier step and some governments impose quasi-totalitarian barriers to emigration.

Well, if states are foolish for imposing excessive taxation, then local governments that do the same thing are downright suicidal. It hardly requires any effort to move to another neighborhood on the other side of a city’s borders.

That’s why Detroit was doomed to failure. It’s why California cities are going bankrupt. And it explains why I’m now very bearish about New York City.

That’s because the voters of the Big Apple just voted for a Mayor who thinks class-warfare tax policy is the right approach.

That’s not going to end well. Here’s some of what I wrote for City AM, a newspaper that serves the London financial community.

The new mayor-elect Bill de Blasio has a tax-and-spend agenda reminiscent of the profligacy that led Greece to fiscal ruin. …It doesn’t take mass emigration to destabilise a local government’s finances, particularly when a city is very dependent on a limited number of high-income taxpayers. That is why de Blasio’s fiscal agenda is so risky. He wants to raise the New York City income tax (which comes on top of the 39.6 per cent federal income tax and the 8.8 per cent state income tax) from 3.876 per cent to 4.41 percent for taxpayers with an annual income over $500,000.

The Wall Street Crowd, however, doesn’t need to call the moving vans right away.

But there is some good news: New York City does not have full control of its fiscal affairs. Any changes in the local income tax or local sales tax have to be approved by the state. Democratic governor Andrew Cuomo reportedly has national ambitions, and has expressed scepticism about de Blasio’s planned tax hike. Further, Republicans control the state senate and presumably will not be overly sympathetic to any fiscal plan that pillages Wall Street. So folks in places that compete with New York City – such as London, Tokyo, and Hong Kong – shouldn’t put champagne on ice quite yet. Mayor-elect de Blasio wants to help your cities, but it’s uncertain at this stage whether he will succeed.

If you put a gun to my head, I suspect de Blasio will get some sort of tax hike, but probably not what he wants.

So what will that mean? It’s hard to answer that question without also know what will happen on the spending side of the budget. If he pays off his union supporters by augmenting the already excessive pay and benefits of city workers, then New York City will be on the fast track to fiscal trouble.

But if he “merely” gets a tax hike, then the City’s collapse will take longer. As I noted earlier this year, there are many people who are willing to swallow big tax bills to live in particular locations.

…it’s clear that some people are willing to pay more because they like the non-political features of NYC and the Golden State. For those who like museums, fancy dining, and Broadway shows, there’s no easy substitute for New York City. And for people who like the ocean and a Mediterranean climate, it’s hard to compete with California.

But there are limits. Each time the fiscal burden increases, a few more rich people may decide to leave. And since New York City is heavily dependent on upper-income taxpayers (the government already gets 43 percent of its income tax revenue from this sliver of the population), it doesn’t take much fiscal emigration to destabilize the City’s budget.

Perhaps the most important lesson, though, is that higher taxes on the rich are simply the appetizer course. It’s just a matter of time before politicians go after the rest of us – for the simple reason that you can’t finance a welfare state without screwing the middle class.

P.S. If you want more class-warfare cartoons, click here, here, here, and here.

Read Full Post »

Obama Advocates Higher Unemployment for Lower-Skilled Workers (and Some Great Election News from Colorado)

Perhaps because he wants to divert attention from the slow-motion train wreck of Obamacare, the President is signalling that he will renew his efforts to throw more people into the unemployment line.

Needless to say, that’s not how the White House would describe the President’s proposal to increase the minimum wage, but that’s one of the main results when the government criminalizes certain employment contracts between consenting adults.

To be blunt, if a worker happens to have poor work skills, a less-than-impressive employment record, or some other indicator of low productivity that makes them worth, say, $7.50 per hour, then a $9-per-hour minimum wage is a ticket to the unemployment line.

Which is the point I made in a rather unfriendly interview with Yahoo Finance.

But a higher minimum wage is popular with voters who don’t understand economics, and unions strongly support a higher minimum wage since it means potential competitors are then priced out of the market.

So it’s not exactly a surprise that the White House is siding with unions over lower-skill workers. Here’s some of what is being reported by The Hill.

President Obama might soon renew his push for a $9 minimum wage, a top economic adviser said on Monday. “You’ll certainly be hearing more about it,” Jason Furman, the chairman of the Council of Economic Advisers, told reporters Monday at a Wall Street Journal event. …Obama urged lawmakers during January’s State of the Union address to boost the wage from $7.25 to $9 per hour and index it so that it rises with inflation.

The “indexing” provision would be especially pernicious. In the past, rising overall wage levels have diminished the harmful impact of the minimum wage. But if the minimum wage automatically increases, then the ladder of opportunity may be permanently out of reach for some low-skilled workers.

Walter Williams also has weighed in on this issue, noting specifically the negative impact of higher minimum wages on minorities. Indeed, he cited research showing that, “each 10 percent increase reduces hours worked by 3 percent among white males, 1.7 percent for Hispanic males, and 6.6 percent for black males.”

The bottom line is that businesses aren’t charities. They hire workers when they think more employees will improve the bottom line. So if you artificially increase the price of labor, it’s easy to understand why marginal workers won’t get hired.

For more information on this issue, here’s a video produced by the Center for Freedom and Prosperity.

P.S. I wrote yesterday that the tax-hike referendum in Colorado was the most important battle in the 2013 elections.

Well, I’m delighted to report that Colorado voters are even wiser than Swiss voters. A take-hike referendum in 2010 was defeated in Switzerland by a 58.5-41.5 margin. Colorado voters easily exceeded that margin, rejecting the tax hike in a staggering 66-34 landslide.

Here’s what the Denver newspaper – which liked the tax increase – wrote about the referendum.

The pro-66 side raised more than $10 million that it lavished on advertising, messaging and get-out-the-vote efforts, thanks in part to huge donations from teachers unions, Michael Bloomberg, and Bill and Melinda Gates. Opponents meanwhile had barely the equivalent of a street-corner megaphone at their disposal. And yet Colorado voters, in another display of independence, ignored the prodding in one direction and chose to go their own way. They didn’t merely defeat Amendment 66. They demolished the idea.

In other words, taxpayers were heavily outspent by union bosses and out-of-state billionaires, yet they easily prevailed and Colorado’s flat tax is safe.  At least for now.

P.P.S. I conducted a test this morning on media bias. I’m still in Iceland, so I went to sleep last night long before American election results were announced. When I woke up this morning, I looked first at both the CNN and Washington Post websites. When I didn’t see any results for the Colorado tax referendum, I was 99 percent confident that the statists had lost. Needless to say, it would have been front page news if the referendum was approved.

P.P.P.S. Since I’m adding some comments on Colorado elections, we also should be happy that the pro-school choice members of the Douglas County School Board were all reelected, notwithstanding a big effort by the unions.

Read Full Post »

The Most Important Election of 2013

There’s an off-year election today in the United States. There are no contests for the White House or Congress, but that doesn’t mean there aren’t any important choices being made.

I say that notwithstanding the fact that the big races between politicians at the state and local level aren’t expected to be close.

Governor Christie in New Jersey is poised for a landslide victory in his race for a second term. The only interesting aspect of this race is whether he will use his reelection as a springboard for a run at the White House in 2016. That may please you, depending on whether you focus on his rhetoric (here and here) or his record (here and here).

Bill de Blasio is going to be elected Mayor of New York City, replacing a politically correct Napoleonic busy-body (see here, here, here, here, and here) with a hard-left statist. I expect many productive people will be fleeing in the next few years. Given what will happen, I suspect Detroit-on-the-Hudson will be the future name of NYC.

Terry McAuliffe, a former Clinton fundraiser, will probably become Governor of Virginia. The GOP in the state has been dispirited and weak every since the corrupt Republican governor imposed a big tax hike, though the GOP candidate has a slight chance for an upset because of growing anti-Obamacare sentiment.

The contest that should command our attention is Amendment 66 in Colorado, a ballot initiative that would eliminate the state’s 4.63 percent flat tax and replace it with a so-called progressive tax regime with rates of 5 percent and 5.9 percent.

Here’s how the Wall Street Journal describes the proposal.

Colorado has veered to the political left in recent years, and on November 5 it may take another leap toward California. The Democrats and unions who now run state government are promoting a ballot initiative that would raise taxes and unleash a brave new era of liberal governance. …a $950 million revenue increase for politicians in the first year alone.

The real problem is what happens once the flat tax is gutted and politicians can play divide and conquer with the tax code.

…the real prize is down the road. Once a graduated tax code is in place, unions and Democrats will try again and again to raise tax rates on “the rich.” This has happened everywhere Democrats have run the show in the last decade, from Maryland to Connecticut, New York, Oregon and California. Within a decade, the top tax rate will be closer to 8% or 9%.  …that won’t make the state any more competitive in its interior U.S. neighborhood, where states like Kansas and Oklahoma are cutting tax rates. High-tax states created one net new job for every four in states without an income tax from 2002-2012, according to a study for the American Legislative Exchange Council.

So which side will win this vote?

As recently as 2011, Colorado voters voted down a state sales and income-tax increase, but the unions keep coming. And it’s no surprise they’ve already put $2 million behind Amendment 66. If it passes, they know they’ll get a big return on that political investment for decades to come. If it does pass, we’ll also know that millions of Coloradans have taken to smoking that marijuana they legalized last year.

Hmmm…that’s probably the strongest argument I’ve heard in favor of drug prohibition.

For what it’s worth, I’m predicting Colorado voters will reject this foolish class warfare scheme. Though I realize that may be a foolish guess. After all, 54 percent of crazy Oregon voters approved a tax hike in 2010 and their southern neighbors in the suicidal state of California voted by a similar margin for a class-warfare tax hike in 2012.

I’d feel a lot more confident, however, if we could replace Colorado’s voters with some sensible people from Switzerland. When faced with a class-warfare tax hike referendum in 2010, they voted against it by a very strong 58.5-41.5 margin.

And it was Swiss voters who overwhelmingly voted (84.7 percent) for the “debt brake” in 2001. And as I noted just yesterday, that de facto spending cap has been quite effective in controlling the burden of government spending.

Anyhow, if you know any Colorado voters, you may want to send them this video.

Regardless of how they vote, they should understand the potential consequences if Amendment 66 is approved.

P.S. Some Colorado voters just made a very sensible decision to defend the Second Amendment, but it’s unclear whether they have a similar attitude about economic liberty.

Read Full Post »

Iceland, Switzerland, and the Golden Rule of Fiscal Policy

Being a glass-half-full kind of guy, I look for kernels of good news when examining economic policy around the world. I once even managed to find something to praise about French tax policy. And I can assure you that’s not a very easy task.

I particularly try to find something positive to highlight when I’m a visitor. While in the Faroe Islands two days ago, for instance, I wrote about that jurisdiction’s new system of personal retirement accounts.

And now that I’m in Iceland, I want to focus on spending restraint.

As you can see from this chart, lawmakers in this island nation have done a reasonably good job of satisfying Mitchell Golden Rule over the past couple of years. Nominal economic output has been growing by 6.1 percent annually, while government spending has risen by an average of 2.8 percent per year.

If Iceland continues to enjoy this level of growth and can maintain this modest degree of fiscal discipline, the burden of government spending will soon drop below 40 percent of GDP.

As I’ve noted before, fiscal progress can occur very rapidly if spending is curtailed. Consider what’s happened, for example, over the past two years in America. Total federal spending didn’t grow in 2011 or 2012, and that de facto two-year spending freeze has led to a big reduction in the size of the public sector relative to GDP.

And because policymakers addressed the underlying disease of excessive spending, it’s no surprise that the symptom of red ink became much less of a problem with the deficit falling by almost 50 percent in those two years.

And nations such as New Zealand and Canada also have enjoyed quick benefits when limiting the growth of government.

Now let’s take a glass-half-empty look at Icelandic fiscal policy.

First, Iceland isn’t really moving in the right direction. Policy makers are merely undoing the damage that occurred in the latter part of last decade. As recently as 2006, the burden of government spending was less than 42 percent of GDP. So the current period of fiscal discipline is like going on a diet after spending several years at an all-you-can-eat dessert shop.

Second, three years of spending restraint could be a statistical blip rather than a long-run trend, especially since the 2014 numbers from the IMF are an estimate and the 2012 and 2013 numbers aren’t even finalized.

What Iceland needs is some sort of Swiss-style spending cap to impose long-run limits on the growth of government spending. As you can see from this second chart, Switzerland’s “debt brake” has produced more than ten years of spending restraint. Government generally has been growing slower than the private sector, which means that burden of government spending has been falling in Switzerland while other European nations are moving in the wrong direction.

By the way, it’s not just Iceland that would benefit from this type of spending cap. I explained last year that America would never have experienced trillion-dollar deficits if we had something similar to the Swiss debt brake.

Though it’s important not to overstate the benefits of this policy. A Swiss-type spending cap presumably wouldn’t have stopped the Fed’s easy-money policy. Nor would it have prevented Fannie-Mae and Freddie Mac from subsidizing a housing bubble. So we presumably still would have suffered a financial crisis.

But that’s not an argument against a spending cap. We lock our doors and latch our windows even though we realize that determined crooks can still break in. But at least we want to make our homes a less inviting target. Likewise, a spending cap doesn’t preclude all bad policies. But at least it makes it harder for politicians to increase spending.

The ultimate challenge, of course, is figuring out how to convince politicians to tie their own hands. The academic research suggests that spending caps need to be well designed if we want to limit the greed of the political class.

Iceland has made some progress, but Switzerland at this point is a better role model because the debt brake has been very durable.

P.S. If we’re going to copy Switzerland, we also should take a close look at their tax laws. Switzerland has the best ranking in the Tax Oppression Index, while the United States languishes in the bottom half of nations measured.

Read Full Post »

Mocking Obama

It’s been a tough month for President Obama. His beloved healthcare scheme is a slow-motion train wreck and he wasn’t able to trick Republicans into a tax hike as part of budget fights.

So let’s pile on with some humor.

We’ll start with some NSA-related material. We’ve already shared some amusing cartoons, so now it’s time for a photo from Europe.

I don’t know if this is a real pic, but it’s still funny. Not quite as good as this set of images portraying Obama as a voyeur, but worth a chuckle. And it may be a very positive development if it’s a sign that Europeans are beginning to realize that there’s a downside to Obama’s statism.

Speaking of downsides, let’s turn our attention to Obamacare. We’ve certainly had fun mocking Obamacare in the past, and this picture is a welcome addition to our collection.

Though it’s not actually funny when you think of all the people who are suffering because of – as Mark Steyn explained – the President’s scheme to create more dependency.

Let’s now shift from the specific topics of Obamacare and the NSA to share some humor about the President’s overall ideology.

I’ve previously explained that he’s a run-of-the-mill statist, not a socialist. Though if you want a specific term of opprobrium, then it’s accurate to call him a corporatist.

That being said, I confess that I was amused when this image landed in my inbox.

Sort of reminds me of the cartoon at the bottom of this post. But not exactly. I think FDR actually was further to the left than Obama. If you don’t believe me, just listen to Roosevelt in his own words.

Last but not least, it seems the President is going to star in a remake of a Disney classic.

I guess this make sense. After all, I’ve already suggested that his next career will be in the movies.

If this hasn’t exhausted your interest in Obama mockery, you may enjoy this t-shirt, this Pennsylvania joke, this Reagan-Obama comparison, this Wyoming joke, this Bush-Obama comparison, this video satire, and this bumper sticker.

Read Full Post »

What America Can Learn from the Faroe Islands about Social Security Reform

I’m currently in the Faroe Islands, a relatively unknown and semi-autonomous part of Denmark located in the North Atlantic. Sort of like Greenland, but too small to appear on most maps.

I’m in this chilly archipelago for a speech to the annual meeting of the Faroese People’s Party. According to Wikipedia, “the party is supportive of the economic liberalism.” But liberal in this context is classical liberal, so they’re my kind of people.

I spoke on the economics of fiscal policy and talked about issues such as my Golden Rule and the Laffer Curve, but today’s post is about what I learned, not what I said.

The current government of the Faroe Islands, which includes the People’s Party, has modernized its Social Security regime with a system of personal retirement accounts. Starting next January, workers will begin setting aside some of their income to finance a comfortable retirement income. When fully implemented, workers will be putting 15 percent of their income in their accounts, creating a system that’s even larger than the private retirement models in Australia and Chile.

So why did Faroese politicians take this step? Well, unlike politicians in most nations, they looked at the long-run data, saw that they had an aging population, realized that a tax-and-transfer scheme no longer could work, and decided to reform now instead of waiting for the old system to collapse.

Here’s a chart put together by the Nordic Council. As you can see, the Faroe Islands were (and other jurisdictions are) heading to an intolerable and unsustainable situation of too few workers and too many retirees.

By the way, the same situation exists in the United States.

Our population is aging, the Baby Boomers are going into retirement, and birth rates have dropped. Our long-run numbers aren’t as grim as some other nations, but our Social Security system is basically insolvent.

Indeed, Social Security’s long-run deficit is measured in trillions, not billions. According to the most recent Trustee’s Report, deficits over the next 75 years are expected to equal $36 trillion. And that’s after adjusting for inflation!

For what it’s worth, if a private insurance or pension company kept its books in the same was as Social Security, it would be forced into bankruptcy and its managers would be indicted for fraud..

But when politicians operate a Ponzi Scheme, we’re supposed to applaud them for compassion!

This is why it might be worth the cost if we sent the politicians in Washington on a junket (using their taxpayer-financed fleet of luxury jets) to Torshavn, the Faroese capital. They could eat some lamb and fish and learn what it’s like to responsibly address a problem before it becomes a crisis.

Or we could save the money and simply force them to watch my video on personal retirement accounts.

P.S. In you like gallows humor, you can enjoy some Social Security cartoons here, here, and here. And we also have a Social Security joke, though it’s not overly funny when you realize it’s a depiction of reality.

P.P.S. You probably don’t want to know how Obama would like to “fix” the Social Security shortfall.

P.P.P.S. On Monday, I continue my tour of the North Atlantic with a speech in Iceland on the Laffer Curve. I don’t know if I’ll say anything memorable, but I’ll use the opportunity to learn more about some of that nation’s policies, including their very successful privatized fishery system. Iceland has some bad policies, of course, but it’s also worth noting that they wisely have rejected membership in the European Union, they’ve reduced the burden of government spending in recent years, and they also made the right decision when they decided (with help from an outraged electorate) to limit bailouts when their banks went bust. You won’t be surprised to learn, though, that the Paris-based OECD has been using American tax dollars to advocate bad fiscal policy in Iceland.

Read Full Post »

Easy Money Is Creating the Conditions for a Bigger European Economic Crisis

At the beginning of the year, I was asked whether Europe’s fiscal crisis was over. Showing deep thought and characteristic maturity, my response was “HAHAHAHAHAHAHAHAHA, are you ;@($&^#’% kidding me?”

But I then shared specific reasons for pessimism, including the fact that many European nations had the wrong response to the fiscal crisis. With a few exceptions (such as the Baltic nations), European governments used the crisis to impose big tax hikes, including higher income tax rates and harsher VAT rates.

Combined with the fact that Europe’s demographic outlook is rather grim, you can understand why I’m not brimming with hope for the continent. And I’ve shared specific dismal data for nations such as Portugal, France, Greece, Italy, Poland, Spain, Ireland, and the United Kingdom.

But one thing I’ve largely overlooked is the degree to which the European Central Bank may be creating an unsustainable bubble in Europe’s financial markets. I warned about using bad monetary policy to subsidize bad fiscal policy, but only once in 2011 and once in 2012.

Check out this entertaining – but worrisome – video from David McWilliams and you’ll understand why this issue demands more attention.

I’ve openly argued that the euro is not the reason that many European nations got in trouble, but it appears that Europe’s political elite may be using the euro to make a bad situation even worse.

And to add insult to injury, the narrator is probably right that we’ll get the wrong outcome when this house of cards comes tumbling down. Instead of decentralization and smaller government, we’ll get an expanded layer of government at the European level.

Or, as I call it, Germany’s dark vision for Europe.

That’s Mitchell’s Law on steroids.

P.S. Here’s a video on the five lessons America should learn from the European crisis.

P.P.S. On a lighter note, the mess in Europe has generated some amusing videos (here, here, and here), as well as a very funny set of maps.

P.P.P.S. If all this sounds familiar, that may be because the Federal Reserve in the United States could be making the same mistakes as the European Central Bank. I don’t pretend to know when and how the Fed’s easy-money policy will turn out, but I’m not overly optimistic about the final outcome. As Thomas Sowell has sagely observed, “We all make mistakes. But we don’t all have the enormous and growing power of the Federal Reserve System… In the hundred years before there was a Federal Reserve System, inflation was less than half of what it became in the hundred years after the Fed was founded.”

Read Full Post »