Feeds:
Posts
Comments

Posts Tagged ‘Bureaucracy’

President Trump has proposed a one-year pay freeze for federal bureaucrats, which has reinvigorated the debate over whether compensation levels for the civil service are too lavish.

The Washington Post opines this is nothing but “government bashing,” but this chart from my former colleague Chris Edwards should be more than enough evidence to show that federal bureaucrats have a big advantage over workers in the economy’s productive sector.

And there is plenty of additional evidence that federal employment is very attractive. For instance, it’s just about impossible to get fired from a bureaucracy.

Though defenders of the civil service sometimes make the preposterous claim that nobody gets fired because bureaucrats are such good employees.

The low rate at which federal employees are fired for poor performance doesn’t prove the government accepts it but instead “could actually be a positive sign,”… A report from the Merit Systems Protection Board in effect responds to members of Congress and others who contend that federal managers don’t care, or don’t dare, to take disciplinary action because of civil service protections. “…If the agency is successful in preventing poor performance…, a small number of performance-based removals could actually be a positive sign,” MSPB said. …Of the 2.1 million federal employees in a government database…, about 10,000 are fired for either poor performance or misconduct each year. …That low rate of firing has been cited in proposals to force agencies to take action… Individual employees, too, commonly express dissatisfaction with how agencies handle poor performers among their co-workers.

I have to confess that my jaw dropped when I read this article. Maybe we should ask veterans whether they think all federal bureaucrats do a good job?

Or we can ask non-profit groups whether they think IRS bureaucrats are top-quality workers? Or ask anyone who has ever tried to navigate the federal government?

We also know that the counties where most federal bureaucrats reside are now the richest region of the entire nation.

The three richest counties in the United States with populations of 65,000 or more, when measured by their 2016 median household incomes, were all suburbs of Washington, D.C., according to data released today by the Census Bureau. Eight of the 20 wealthiest counties with populations of 65,000 or more were also suburbs of Washington, D.C.–as were 10 of the top 25. …With Falls Church City included in the 2015 data, the nation’s four wealthiest counties were D.C. suburbs.

To be fair, this data is also driven by all the high-paid lobbyists. contracts, consultants, and others who have their snouts buried in the federal trough. So the incredible wealth of the DC region is really an argument for shrinking the size and scope of the federal government.

But the bureaucracy is part of the problem.

Interestingly, even the Congressional Budget Office concluded that bureaucrats are overpaid. And CBO almost certainly understated the gap, as noted in congressional testimony.

The CBO report’s headline figure is that, on average, federal salaries and benefits are 17 percent above private-sector levels. … I would consider the CBO’s reported federal compensation premium to be on the low end… when I analyze federal employee wages using the methodology that the progressive-leaning Economic Policy Institute has used in numerous studies of state and local government salaries, I find an average federal salary premium of not 2 percent but of about 14 percent. … The CBO chose to value federal employees’ pension benefits using a 5 percent discount rate. Using that discount rate, the federal employee retirement package was found to be substantially more generous than is received by comparable private-sector employees. But…corporate pensions are not nearly as safe as federal pensions, as witnessed by pending benefit reductions for “multiemployer” defined benefit plans. Valuing federal pension benefits using a lower discount rate to better reflect their safety would find a higher overall federal compensation premium.

Notwithstanding all this evidence, the unions representing bureaucrats nonetheless try to crank out numbers showing federal employees are underpaid.

To be sure, overall compensation levels don’t tell us everything. It is important to adjust for education, skills, and other factors.

Which is why the most useful, powerful, and revealing data in this debate is produced by the Bureau of Labor Statistics, which measures voluntary quit rates by industry. If there is a lot of turnover in a sector of the economy, that suggests workers are underpaid. But if there are very few voluntary departures, that suggests workers in that part of the economy are overpaid.

And the numbers from BLS clearly show that federal bureaucrats are far less likely to leave their positions when compared to employees in the private sector.

This five-fold gap is staggering. I have lots of friends who work for the federal government. Most privately confess that they know that are making out like bandits. I think I’ll send this chart to the few holdouts.

By the way, I shared the numbers about quit rates for state and local bureaucrats back in 2011. Same story, though the compensation gap isn’t quite as large and may be driven mostly by unfunded fringe benefits.

P.S. I’m much more interested in shrinking government rather than shrinking pay levels. The correct pay for bureaucrats at the Departments of TransportationHousing and Urban DevelopmentEducationEnergy, and Agriculture is zero. Why? Because they bureaucracies shouldn’t exist.

Read Full Post »

When I first created the Bureaucrat Hall of Fame, I confess that my standards were a bit slack. I awarded membership to government workers that are grossly overpaid (see here and here, for instance), but otherwise didn’t really do anything special to merit awards.

In recent years, I’ve been more judicious. I only give the “honor” to bureaucrats who go above and beyond the call of duty.

  • A new Jersey bureaucrat got almost $250,000 per year for simultaneously holding six different government jobs.
  • Figuratively screwing taxpayers wasn’t good enough for a welfare bureaucrat in Pennsylvania.
  • The civil servant at the Veterans Administration who overlooked deadly waiting lists but had…um…time on his hands for other things.

There’s even a foreign wing in the BHoF

We’re going to expand our list today, but by using a different approach. We’re going to have a poll so you can decide which bureaucrat is most worthy.

Is Darryl De Sousa the most deserving?

Federal prosecutors have charged Baltimore Police Commissioner Darryl De Sousa with three misdemeanor counts of failing to file federal taxes… De Sousa, 53, willfully failed to file federal tax returns for 2013, 2014 and 2015 despite having been a salaried employee of the Police Department in those years, prosecutors said Thursday. …“There is no excuse for my failure to fulfill my obligations as a citizen and public official,” he said in a statement. “My only explanation is that I failed to sufficiently prioritize my personal affairs.” …Mayor Catherine Pugh expressed “full confidence” in De Sousa. …De Sousa earned $93,104 in 2013, when he is first accused of failing to file taxes. He earned $101,985 in 2014 and $127,089 in 2015. …The Police Department routinely suspends with pay officers accused of a misdemeanors pending the outcome of the case. De Sousa remained on the job Thursday. He currently earns a salary of $210,000 a year.

Does Thomas Tramaglini merit this award?

The Kenilworth school superintendent charged Monday with defecating in public was caught in the act at the Holmdel High School football field and track after surveillance was set up due to human feces being found “on a daily basis,” police said. Thomas Tramaglini, 42, …was running at the track on the athletic fields at 5:50 a.m. before he was arrested. Track coaches and staff at Holmdel High School told the district’s resource officer that they found human feces on or near the football field and track daily… Tramaglini is also charged with lewdness and littering.

Should Donn Thompson win the prize?

Los Angeles firefighter Donn Thompson had a busy year in 2017. If his pay stubs are to be believed, he literally never stopped working. Data obtained by Transparent California…show that Thompson pulled down $300,000 in overtime pay during 2017, on top of his $92,000 salary. Over the past four years, Thompson has earned more than $1 million in overtime… To earn that much in overtime pay, Thompson would have had to work more hours than actually exist in a single year. Either the highly paid firefighter found a way to stretch the space-time continuum or something fishy is going on. …earning $302,000 at a rate of $47.40 per hour would require working more than 6,370 hours. Add that to the 2,912 hours he worked as a salaried employee, and you get more than 9,280 hours worked, despite the fact that there are only 8,760 hours in a year. …Thompson…might very well be the highest paid firefighter in American history. …During 2017, the Los Angeles Fire Department had 512 employees who cashed in with at least $100,000 in overtime pay… Thompson was one of 26 employees to get at least $200,000 in overtime pay.

This is a tough contest.

In Baltimore, I suspect ordinary people don’t get a mulligan when they commit a crime, so Mr. De Sousa’s kid-glove treatment stands out. I’m also impressed (in a bad way) that his salary soared from $93K to $210K in just five years. Nice work if you can get it.

On the other hand, Mr. Tramaglini has…um…layed down a special type of marker. Was he inspired by fellow bureaucrats from the Postal Service and Environmental Protection Agency?

But let’s not forget Mr. Thompson. Claiming to have worked more hours than actually exist is rather extraordinary. Though ripping off taxpayers apparently is a tradition for firefighters, particularly in California.

As they say in Chicago, vote early and vote often.

If you like making your opinion heard, my most recent poll was about which state will be the first to suffer political collapse. And my favorite poll was to pick the best political cartoonist.

Read Full Post »

Education spending and teacher pay has become a big issue in certain states.

Unfortunately, not for the right reason. In an ideal world, taxpayers would be demanding systemic reform because government schools are getting record amounts of money (higher than any other nation on a per-student basis) while producing sub-par results.

Instead, we live in a surreal parallel universe where teacher unions are pushing a narrative that taxpayers should cough up more money because teachers supposedly are underpaid.

Let’s look at the data.

An article in City Journal debunks the claim that teachers are underpaid.

…protests across the country have reinforced the perception that public school teachers are dramatically underpaid. They’re not: the average teacher already enjoys market-level wages plus retirement benefits vastly exceeding those of private-sector workers. Across-the-board salary increases, such as those enacted in Arizona, West Virginia, and Kentucky, are the wrong solution to a non-problem. …At the lowest skill levels—a GS-6 on the federal scale—teachers earn salaries about 26 percent higher than similar white-collar workers. …The average public school teaching position rated an 8.8 on the federal GS scale. After adjustment to reflect the time that teachers work outside the formal school day, the BLS data show that public school teachers on average receive salaries about 8 percent above similar private-sector jobs. …Data from the Survey of Income and Program Participation show that teachers who change to non-teaching jobs take an average salary cut of about 3 percent. Studies using administrative records in Florida, Missouri, Georgia, and Montana showed similar results. …public-employee retirement and health benefits are bleeding dry state and local budgets. Neither the public nor teachers fully appreciates the costs of these programs. We forget the value of benefits when considering how teacher pay compares with private-sector work.

And keep in mind those lavish pensions are woefully underfunded, so taxpayers are paying too much now and they’ll have to pay even more in the future.

But I think the key factoid from the above article is that teachers take a pay cut, on average, when they leave the profession. Along with the “JOLTS” data, that’s real-world evidence that teachers are getting paid more than counterparts in the economy’s productive sector.

Allysia Finley of the Wall Street Journal also punctures the false claims of the union bosses.

Teachers unions… They’re using misleading statistics… They conflate school funding and state education spending. In Oklahoma, unions proclaimed that per pupil school spending fell by 28.2% over the past decade. That refers to the inflation-adjusted state’s general funding formula. But total per pupil outlays increased by 16% in nominal terms between 2006 and 2016… They use elevated spending baselines. Teachers unions nearly always compare school spending and teacher salaries today with peak levels before the great recession, which were inflated like housing prices. Between 2000 and 2009, average per pupil spending across the country increased 52%…per pupil spending ticked up by 7.5% between 2012 and 2015. School spending growth…increased faster than the consumer price index. …They don’t account for other forms of compensation. Since 2000, per pupil spending on employee benefits has doubled. …pensions and health benefits are the fastest-growing expenses for many school districts, and most of the money goes to retired teachers. …the unions are lying with statistics.

In a column for the Denver Post, a parent showed that his state’s teachers are getting above-average compensation.

Teachers are…mostly paid via a union “salary schedule,” meaning they get pay raises based on only two factors: the number of college degrees and certificates they earn, and how many years they’ve been on the job. That makes a pretty lousy incentive structure… We keep hearing Colorado is 49th in the country for educational spending. That lie is repeated so often it becomes legend. Funding for Colorado schools are split between the local school district and the state. So, if you compare only the state funding part to states that have no local match, yep, ours looks low. But when you look at total funding, which can be counted in different ways, the picture doesn’t look so dire. …According to the Colorado Department of Education, the average salary for teachers here is $52,728. But that’s only one piece of the compensation. The school year is about 180 days, or 36 weeks. So, the pay is $1,465 for every week a teacher is teaching. Vacation time? Well, 52 weeks in a year, minus 36 weeks in the classroom, that’s 16 weeks off, roughly 4 months! Compare that to someone who only gets 2 weeks off but still gets paid $1,465 a week when working, that’s the equivalent of $73,233. And let’s count the present-cost value of their retirement benefits. …Not bad for a system where you can retire at 58.

Let’s close with some excerpts from Jason Riley’s column in the Wall Street Journal.

The nation’s K-12 schools are…turning into hotbeds of political activism. …teachers are demanding higher pay, better benefits and more education funding overall. …The American Federation of Teachers and the National Education Association have thousands of state and local affiliates. They are among the richest and best-organized pressure groups in the country. And they are on a roll. That’s good news for their members but not necessarily for children, parents and taxpayers. …Teachers unions support work rules that prevent the most capable teachers from being sent to low-performing schools, that shield teachers from meaningful evaluations, and that require instructors to be laid off based on seniority instead of performance. …those rules do nothing to address the needs of students. …politicians love to highlight education outlays. It helps them win votes and ward off union agitators. But the connection between school spending and educational outcomes is tenuous. …total spending per pupil at the state level rose, on average, by an inflation-adjusted 18%. During this period, it fell in Arizona… Yet on 2015 federal standardized exams, Arizona made more progress than any other state. New York, by contrast, boasts the highest spending per pupil and teacher pay in the country, but you wouldn’t know it from the test results.

For what it’s worth, the final few sentences in the above excerpt should be main issue being discussed in state capitals. Lawmakers should be asking why more and more money never produces better outcomes.

But that’s really not the problem. It’s the symptom of the problem.

Our primary challenge in education is that we rely on government monopolies that are captured by special interests. We need school choice so that competitive forces can be unleashed to generate better results. There’s strong evidence that choice produces good outcomes in the limited instances where it is allowed in the United States.

And in that kind of system, we may actually wind up with better teachers that are paid just as much. Or maybe even more.

P.S. There’s also strong evidence for school choice from nations such as SwedenChile, and the Netherlands.

P.P.S. Needless to say, eliminating the Department of Education is part of the solution.

Read Full Post »

I’m not a fan of conspiracy theories. When people ask me whether there is some sinister, behind-the-scenes cabal running Washington, I tell them that petty corruption, self interest, and “public choiceare much better explanations for the nonsensical policies being imposed on the country.

So you won’t be surprised that rhetoric about the “deep state” rubs me the wrong way. If the term simply was used to describe D.C.’s bloated, self-interested, and left-leaning bureaucracies, that would be okay. But is seems that the phase also implies some sort of secret master plan on the part of shadowy insiders.

To be blunt, the people in Washington don’t have the competence to design, implement, and enforce any type of master plan. Yes, we have a Leviathan state, but it’s much more accurate to think of Uncle Sam as a covetous, obese, and blundering oaf (as illustrated by my collection of cartoons).

That being said, that oaf is not a friend of liberty, as explained in an article published by the Federalist.

…to make a government job more like the ones the rest of us have will require the president and Congress to undo more than a century of misguided, anti-democratic, and unconstitutional laws governing the civil service. …the bulk of the civil service—2.8 million bureaucrats—has become a permanent class of powerbrokers, totally unaccountable to the winds of democratic change. …incompetence and corruption are the least of the problems with the modern civil service. With 95-99 percent of political donations from government employees going to Hillary Clinton in the last election, it looks less like a system of apolitical administrators and more like an arm of the Democratic Party. …Civil service protections…have created a system that grows government and advances left-wing causes regardless of who the people elect.

Moreover, there is a structural feature of the Washington bureaucracy that gives it dangerous powers.

John Tierney’s column in the Wall Street Journal explains the problem of the “administrative state.”

What’s the greatest threat to liberty in America? …the enormous rogue beast known as the administrative state. Sometimes called the regulatory state or the deep state, it is a government within the government… Unelected bureaucrats not only write their own laws, they also interpret these laws and enforce them in their own courts with their own judges. All this is in blatant violation of the Constitution… Mr. Hamburger, 60, a constitutional scholar…says, sitting in his office at Columbia Law School… “The government can choose to…use an administrative proceeding where you don’t have the right to be heard by a real judge or a jury and you don’t have the full due process of law…” In volume and complexity, the edicts from federal agencies exceed the laws passed by Congress by orders of magnitude. “The administrative state has become the government’s predominant mode of contact with citizens,” Mr. Hamburger says. …“The framers of the Constitution were very clear about this,” Mr. Hamburger says…”Congress cannot delegate the legislative powers to an agency, just as judges cannot delegate their power to an agency.”

George Will elaborates, noting that “administrative law” is an affront to the Constitution’s principle of “rival branches.”

…the administrative state distorts the United States’ constitutional architecture…Clarence Thomas…is urging the judicial branch to limit the legislative branch’s practice of delegating its power to the executive branch. …This subject is central to today’s argument between constitutionalists and progressives. …Today, if Congress provides “a minimal degree of specificity” in the instructions it gives to the executive, the court, Thomas says, abandons “all pretense of enforcing a qualitative distinction between legislative and executive power.” …the principles Thomas has articulated “attack the very existence of the modern administrative state.” This state, so inimical to conservatism’s aspiration for government limited by a constitutional structure of rival branches… Woodrow Wilson…became the first president to criticize America’s founding, regretted the separation of powers because he thought modern government required a clerisy of unfettered administrators. …Today we are governed by Wilson’s clerisy, but it does not deliver what is supposed to justify the overthrow of James Madison’s constitutional system — efficient, admirable government.

Peter Wallison of the American Enterprise Institute adds some cogent analysis.

Although the Constitution places the federal legislative power in Congress, it is now increasingly — and alarmingly — flowing to administrative agencies that, unlike Congress, are not directly accountable to the public affected by their decisions. Unless we can find a solution to this problem—a way to curb and cabin the discretionary power of administrative agencies —decentralization and individual self-determination will eventually be brought to an end. …The framers believed that the tripartite structure of the federal government would be enough to prevent any one of the three branches from consolidating the power of government and becoming a danger to liberty. But with the growth of the administrative state, we may now be seeing exactly the consolidation of powers that Madison feared. …the judicial branch is supposed to be the final interpreter of the Constitution and thus the objective protector of the framework the Constitution ordains. But unfortunately, modern courts have generally failed to perform this role… America is an exceptional country in part because its constitutional framework has, until relatively recently, limited the government’s ability to centralize its control and restrain the nation’s diversity. If we are to avoid a dramatic over-centralization of power, the growth of the administrative state must be restrained.

In an article for National Review, Stanley Kurtz delves into the topic.

the gist of the growing conservative critique of the administrative state…focuses on a runaway bureaucracy’s threat to constitutional government. Congress has improperly delegated much of its law-making power to bureaucrats, who in turn have abusively expanded this authority. The courts, for their part, have turned a blind eye to the administrative power-grab. Meanwhile, agencies staffed by unelected bureaucrats now operate de facto courts. In effect, these agencies negate the separation of powers by simultaneously exercising legislative, executive, and judicial functions, the very definition of authoritarian rule. …governors and state legislators can be unaware of policy end-runs imposed by federal agreements with a state’s own bureaucrats. At both the state and federal levels, then, bureaucracy has broken loose and effectively turned into a national fourth branch of government. …The Founders designed our federalist system to secure liberty by dividing and disbursing power, and by ensuring that local and state governments would remain more accountable to citizens than a distant federal government ever could. In fundamental ways, however, the modern practice of conditioning federal grants on state acceptance of federal dictates undermines the Founders’ intent. …

Robert Gebelhoff of the Washington Post points out that this fight has major implications.

One of the legal issues that’s less often discussed is the role that the next Supreme Court justice will play in conservatives’ long-running legal fight to limit the size of the federal government. For decades, conservatives on the bench have been losing that war, giving way to a system of administrative law that is written, for the most part, by bureaucratic agencies. …it’s a really big deal. Over the past half century, agencies have exploded in size and power, so this debate really is about how much power the federal government should have. …Conservatives, fearful that bureaucracies are becoming an unchecked “fourth branch of government,” have decried agency deference. Just last month, Justice Clarence Thomas argued that the doctrine “has metastasized,” as if it were a cancer. And back in 2013, Chief Justice John Roberts warned of the “danger posed by the growing power of the administrative state…” Both Roberts and Thomas frame the issue as a threat to the separation of powers: We’re letting agencies in the executive branch dip into the powers reserved for the judicial and legislative branches. …And by allowing bureaucrats the ability to define the scope of their own jurisdiction, we let them answer questions meant to be left up to the courts. This, they argue, is at odds with the Constitution. …Conservatives fearing a powerful bureaucratic state have few legal weapons to fight it. The future of a small-government Supreme Court is bleak, and the march toward greater agency control of the law will probably continue forward.

I’ll close with some recent polling data about the “deep state” from Monmouth University.

Here’s a question asking whether there’s a conspiratorial version of the “deep state.”

I’m not sure what to think of the answers.

I like people to be suspicious of the federal government. But I’d much prefer them to be concerned because they’re reading my daily columns, not because they think there’s a sinister plot.

I prefer the answers to this next question. Most people presumably have never heard of “administrative law” or the “administrative state,” but they do have a healthy skepticism of bureaucratic rule.

Most of the authors cited today correctly want federal judges to fix the problem by limiting the power of bureaucrats to make and enforce law.

That would be desirable, but I’d go much further. We should eliminate almost all of the agencies, programs, and departments that clutter Washington. Then the problem of the administrative state automatically disappears.

Read Full Post »

Time for a confession.

I routinely mock bureaucrats, but I don’t really think they are any worse than other people. Indeed, I have plenty of friends and acquaintances who work for various levels of government and they are fundamentally decent people.

The real problem is that bureaucracies create bad incentives. So even people who are generally good will be tempted to exploit rules that reward bad behavior.

And some of these folks, operating in systems with bad incentives, will morph into bad people. Heck, some of them are so awful that I elect them to the Bureaucrat Hall of Fame.

But it’s also important to recognize other bureaucrats – as well as the perverse rules that encourage their bad actions.

Let’s start with a cop in New Jersey who went above and beyond the call of duty, at least if the call of duty involves ripping off taxpayers.

…former Police Chief Philip Zacche…could spend the first decade of his retirement in federal prison after he admitted to stealing $31,713 from an agency that serves the city’s neediest families. Federal prosecutors said Friday that Zacche filled out phony time sheets to get paid for security work that he never performed for the Jersey City Housing Authority. …As a member of the department’s brass, Zacche pulled a six-figure salary before overtime. He earned even more by working an off-duty part-time gig as a security officer for the Authority’s Marion Gardens housing development. When he retired in June, city taxpayers had to cut Zacche a check for $512,620 to compensate him for 450 unused comp and vacation days. The 61-year-old Manalapan resident is now set to collect a pension of at least $11,946 every month for the rest of his life.

That’s a pension of more than $140,000 per year. And he gets it well before age 65. No wonder New Jersey is a fiscal mess.

Let’s also highlight a senior federal bureaucrat who specialized in exploiting immigrants to steal money.

A chief counsel at US Immigration and Customs Enforcement (ICE) has admitted stealing immigrants’ identities to defraud banks. Raphael Sanchez, 44, forged identity documents on his government computer to open bank accounts and credit cards in the names of seven immigrants. He racked up more than $190,000 (£135,000) in personal loans, transferred funds and card-spending during the four-year scam. …He claimed three were dependent relatives on his tax returns for 2014 to 2016. …He resigned from his role at the ICE’s Office of the Principal Legal Advisor after his crimes came to light.

I’m almost impressed by this guy’s depravity. Not only did he steal identities, but he even listed some of the victims as dependents on his tax return. That’s real chutzpah!

And notice that theft and fraud apparently are not enough to get a bureaucrat fired. Instead, he resigned.

And since we’re on the topic of bureaucrats doing bad things and not getting fired, we may as well note that the guy who sent the false alert in Hawaii is still getting checks from the taxpayers he terrified.

The worker who sent a false missile alert to Hawaiian residents on Saturday has reportedly been reassigned. The civil defence employee has been moved to another role, but not fired, according to multiplemedia reports. In a press conference on Saturday, the head of Hawaii’s Emergency Management Agency, Vern Miyagi, said the worker “feels terrible.” …The Post also confirmed that there are no plans to fire the employee.

Here’s a fourth example, dealing with a former Obama appointee who was unmasked for screwing taxpayers.

Vikrum Aiyer liked to commute to his government job by taxi. On at least 130 occasions over two years — the majority during a four-month stretch in 2016 — the then-chief of staff for the U.S. Patent and Trademark Office called a taxi to pick him up near his home in the District. He was chauffeured across the Potomac River 10 miles or so to the agency’s headquarters in downtown Alexandria. And then…Aiyer billed the government for each ride. To escape notice, Aiyer impersonated current and former high-level agency officials, writing their names on cab receipts and vouchers he submitted to the taxi company, which then billed the government, investigators found. …Aiyer…released a statement saying he had a “misunderstanding of agency taxi rules.”

Hmmm…, I think I’ll go to the grocery store later today and slip a couple of steaks into my jacket. If I get caught leaving the store, I’ll say I had a “misunderstanding of store rules.”

The good news, at least if we’re grading on a curve, is that it only took about two years for the government to realize what was happening.

Aiyer’s unauthorized rides apparently went unnoticed for at least two years by budget officials who reviewed the invoices from Alexandria Yellow Cab, which has a contract to provide authorized taxi services for agency officials. The patent office paid the taxi company more than $4,000 for Aiyer’s rides, the report says. …For most of the cab rides, Aiyer was picked up on a street corner a tenth of a mile from his home, according to the report. But he wrote on the invoice that he was leaving from Commerce Department headquarters in downtown Washington. …investigators found…that he “used the Agency’s Cab Company account to facilitate his weekend social activity… Aiyer also racked up $15,000 in expenses on his government-issued credit card, charging for food and drink at local bars, clubs, coffee shops, restaurants, grocery stores, dry cleaners and at least one liquor store, the report said. …The report says he also misstated his educational credentials on résumés he submitted to the Obama administration, claiming to have a postgraduate degree that he did not receive.

By the way, the article mentioned that Aiyer was a technology adviser for the White House. Did he advise on how to lie on your resume and how to get taxpayers to finance one’s social life?

A common problem in most of these stories is that politicians and bureaucrats conspire together to create rules that enable bad behavior.

Government employee unions, for instance, give lots of money to politicians and then sit down with those lawmakers to “negotiate” pay and benefit packages.

Needless to say, the interests of taxpayers don’t get represented. And that’s why many state and local governments are careening toward bankruptcy.

What’s especially discouraging is how these deals often include loopholes that are designed to be exploited.

For instance, the Los Angeles Times has a very depressing exposé showing how senior bureaucrats in the police and fire departments benefited from a scam allowing them to double dip. But not just double dip. They get extra compensation and oftentimes then don’t do any work.

When Capt. Tia Morris turned 50, after about three decades in the Los Angeles Police Department, she became eligible to retire with nearly 90% of her salary. But like many cops and firefighters in her position, the decision to keep working was a financial no-brainer, thanks to a program that allowed her to nearly double her pay by keeping her salary while also collecting her pension. A month after Morris entered the program, her husband, a detective, joined too. Their combined income for four years in the Deferred Retirement Option Plan was just shy of $2 million, city payroll records show. But the city didn’t benefit much from the Morrises’ experience: They both filed claims for carpal tunnel syndrome and other cumulative ailments about halfway through the program. She spent nearly two years on disability and sick leave; he missed more than two years… The couple spent at least some of their paid time off recovering at their condo in Cabo San Lucas.

Yes, I’m sure they were “recovering” at their luxurious place on the beach.

Just like the other bureaucrats who exploited the system.

The Morrises are far from alone. In fact, they’re among hundreds of Los Angeles police and firefighters who have turned the DROP program — which has doled out more than $1.6 billion in extra pension payments since its inception in 2002 — into an extended leave at nearly twice the pay… Former Police Capt. Daryl Russell, who collected $1.5 million over five years in the program, missed nearly three of those years because of pain from a bad knee, carpal tunnel and multiple injuries he claimed he suffered after falling out of an office chair. …Former firefighter Thomas Futterer, an avid runner who lives in Long Beach, hurt a knee “misstepping off the fire truck,” three weeks after entering DROP, according to city records. The injury kept him off the job for almost a full year.Less than two months after the knee injury, a Tom Futterer from Long Beach crossed the finish line of a half-marathon in Portland, Ore.

Yes, you read correctly. His knee supposedly was so damaged that he couldn’t work, but he nonetheless runs long-distance races.

I’m beginning to think that firefighters in big cities are the most cossetted of all bureaucrats. I now understand the hostility in this video.

Here’s some background on the DROP scam.

The idea of allowing retirement-age public employees to collect their pensions while working and receiving paychecks originated more than three decades ago in tiny East Baton Rouge, La. …the goal was the opposite: to discourage older employees from staying so long that they limited upward mobility for younger workers. And it had a two-year time limit. Since then, versions of the program have been adopted by dozens of states, counties and cities across the country. The details vary — some have short terms to encourage early retirement, others have long terms to retain experience — but the central appeal for employees is constant: two large checks instead of one. …former Mayor Richard Riordan…said: “Oh, yeah, that was a mistake…it’s total fraud.” …in recent years, a growing number of jurisdictions have abandoned or drastically scaled back DROP programs because the math doesn’t work. …Instead of saving money, or remaining “cost-neutral,” the programs lead to ballooning pension costs and accusations that employees are simply double-dipping.

Needless to say, the taxpayers who finance all this aren’t treated nearly as well as government insiders.

When most Los Angeles taxpayers reach the standard retirement age, 65, they face a stark choice: keep working and collecting their paychecks or quit and start collecting Social Security, which replaces only a small fraction of annual wages for most people.When city firefighters or police officers reach their retirement age, 50, the choices are far better. They can keep working for a paycheck, they can retire with up to 90% of their salary in pension and city-subsidized health insurance for life, or they can enter DROP. For many, the choice is easy. …they keep working and collecting their paychecks for up to five years while their pension checks are deposited into a special account. …the city guarantees 5% interest on the money in the account. The city also adds annual cost-of-living raises to the pension checks to make sure they keep pace with inflation.

Disgusting.

Let’s close by speculating whether Trump will do anything to fix this mess, at least the part that occurs on the federal level.

Some pro-Trump readers sent me this story from the Washington Post and suggested it shows that the President is making progress.

…a year into his takeover of Washington, President Trump has made a significant down payment on his campaign pledge to shrink the federal bureaucracy… By the end of September, all Cabinet departments except Homeland Security, Veterans Affairs and Interior had fewer permanent staff than when Trump took office in January — with most shedding many hundreds of employees, according to an analysis of federal personnel data… The falloff has been driven by an exodus of civil servants, a diminished corps of political appointees and an effective hiring freeze. …Federal workers fret that their jobs could be zeroed out amid buyouts and early retirement offers that already have prompted hundreds of their colleagues to leave, according to interviews with three dozen employees across the government. Many chafed as supervisors laid down new rules they said are aimed at holding poor performers and problem workers to account. …“Morale has never been lower,” said Tony Reardon, president of the National Treasury Employees Union, which represents 150,000 federal workers at more than 30 agencies. “Government is making itself a lot less attractive as an employer.”……Agencies have told employees that they should no longer count on getting glowing reviews in their performance appraisals, according to staff in multiple offices, as has been the case for years. Housing and Urban Development managers, for example, are being evaluated for the first time on how effectively they address poor performers.

If I was planning to die in the next month, I would probably agree with readers that Trump made progress in this area.

But as I wrote last year, the only way to successfully shrink bureaucracy in the long run is to shrink government.

Yet Trump just capitulated to a budget deal that increases spending.

I’m willing to praise this President when he does good things, but his weak record on spending almost surely is going to translate into a bigger bureaucracy over time. Though I hope I’m wrong.

Here are two final additional passages from the story that deserve some attention. Starting with an honest bureaucrat.

…some civil servants said they welcome the focus on rooting out waste and holding federal workers to high standards. “Oftentimes we run on autopilot and continue to fund programs that don’t produce the results that were intended,” said Stephanie Valentine, a program analyst at the Education Department. “You can’t keep blindly spending because that’s what we’ve always done.”

And since I’ve previously contrasted Bill Clinton’s good record and Obama’s bad record, this passage is added confirmation of my findings.

Trump already has begun to reverse the growth of the Obama era, when the government added a total of 188,000 permanent employees, according to Office of Personnel Management data. …The last time federal employment dropped during a president’s first year, President Bill Clinton was in the White House.

It’s also worth noting that the bureaucracy didn’t contract during the big-government Bush years.

I’ll conclude by circling back to my original point. Most bureaucrats are no better or no worse than the rest of us. Given the perverse “public choice” incentives inherent in government, however, the good bureaucrats often are lured into bad behavior and the bad bureaucrats frequently become scam artists and crooks.

P.S. If my conclusion was too grim and pessimistic, you can cheer yourself up with another example of bureaucrat humor.

Read Full Post »

The Bureau of Alcohol, Tobacco, and Firearms (BATF) must be anxious to get on my list of government bureaucracies that shouldn’t exist.

The bureaucrats have engaged in some really silly and petty behavior (such as confiscating Airsoft toy guns because they might be machine guns), and they’ve engaged in some behavior that is criminally stupid and dangerous (running guns to Mexican drug gangs as part of the “Fast and Furious” fiasco).

Now we have another example. Though it’s so bizarre that I’m not sure how to classify it. Basically, the bureaucrats created an illegal slush fund, and then used the money illegally.

The New York Times has been on top of this story. Here are excerpts from the latest report.

For seven years, agents at the Bureau of Alcohol, Tobacco, Firearms and Explosives followed an unwritten policy: If you needed to buy something for one of your cases, do not bother asking Washington. Talk to agents in Bristol, Va., who controlled a multimillion-dollar account unrestricted by Congress or the bureaucracy. …thousands of pages of newly unsealed records reveal a widespread scheme — a highly unorthodox merger of an undercover law enforcement operation and a legitimate business. What began as a way to catch black-market cigarette dealers quickly transformed into a nearly untraceable A.T.F. slush fund that agents from around the country could tap. …One agent steered hundreds of thousands of dollars in real estate, electronics and money to his church and his children’s sports teams, records show. …At least tens of millions of dollars moved through the account before it was shut down in 2013, but no one can say for sure how much. The government never tracked it.

Oh, by the way, the BATF was breaking the law.

Federal law prohibits mixing government and private money. The A.T.F. now acknowledges it can point to no legal justification for the scheme.

But you won’t be surprised to learn that there have been no consequences.

…no one was ever prosecuted, Congress was only recently notified, and the Justice Department tried for years to keep the records secret.

And it’s also worth noting that this is also a tax issue. As I’ve noted before, high tax rates encourage illegality.

Though cigarettes are available at any corner store, they are extraordinarily profitable to smuggle. That’s because taxes are high and every state sets its own rates. Virginia charges $3 per carton. New York charges $43.50. The simplest scheme — buying cigarettes in Virginia and selling them tax-free in New York — can generate tens of thousands of dollars in illicit cash. By some estimates, more than half of New York’s cigarettes come from the black market.

By the way, I can help but wonder why the federal government is engaging in all sorts of dodgy behavior to help enforce bad state tax laws. Yes, I realize the cigarettes are crossing state lines, but so what? The illegal (but not immoral) behavior occurs when an untaxed cigarette is sold inside the borders of, say, New York. Why should Washington get involved?

In other words, I like the fact that borders limit the power of government. It’s why I don’t like global schemes to undermine tax competition (why should Swiss banks be required to enforce bad U.S. tax law?), and it’s why I don’t like the so-called Marketplace Fairness Act (why should merchants in one state be required to enforce the sales taxes of other states?).

But I’m digressing.

Let’s get back to the Bureau’s misbehavior. Here’s some additional reporting from the U.K.-based Times.

A US government crime-fighting agency ran a secret bank account that its employees used to buy luxury cars, property and trips to casinos. Officers for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), charged with investigating smuggling and gun crimes, built up a slush fund worth tens of millions of dollars through illicit cigarette sales, ostensibly as part of an operation to catch traffickers. The scandal is the latest controversy to hit the agency, which has been criticised in recent years for lack of accountability and allowing the flow of guns and drugs to go unchecked. …Cash from the slush fund generated at an ATF field office in Bristol, Virginia, …funded activities such as a trip to Las Vegas, donations to agents’ children and the booking of a $21,000 suite at a Nascar race.

And what about the overall BATF bureaucracy? Well, it’s getting some unfavorable attention. Keep in mind that this scandal is on top of the “Fast and Furious” scandal of the Obama years.

The ATF has said that it has “implemented substantial enhancements to its policies, and has markedly improved leadership, training, communication, accountability and operational oversight”. Under the previous administration, it was widely derided for a botched weapons operation known as “Fast and Furious”. The agency allowed licensed firearms dealers to sell weapons to illegal buyers, hoping to track the guns to Mexican drug cartel kingpins. But out of the 2,000 firearms sold, only a fraction have been traced. The secret account scandal has renewed calls from across the political spectrum for the department of about 2,000 agents to be reformed or shut down.

Last but not least, I think we have a new member of the Bureaucrat Hall of Fame.

Thomas Lesnak, a senior ATF investigator, began the scheme. …Mr Lesnak retired with his pension and was not reprimanded.

Just like Lois Lerner and the IRS, engaging in corrupt and crooked behavior and then escaping any punishment.

Maybe the two of them should hook up? They’d make a great couple. I’m sure they could even figure out a way to make taxpayers finance their wedding and honeymoon.

P.S. The “Fast and Furious” scheme was just one of scandals that occurred during the Obama years, but it may have been the most foolish. Didn’t anybody at the BATF realize that it wasn’t a good idea to funnel weapons to Mexican drug gangs?!?

P.P.S. The silver lining to that dark cloud is that we got a couple of good one-liners about the Obama Administration’s gun-running scandal from Jay Leno and Jimmy Fallon.

Read Full Post »

I wrote just yesterday that it’s tough to be a libertarian because “public choice” means never-ending pressure for bigger government.

But the good part of working in public policy as a libertarian is that I never lack for topics. Simply stated, governments do so many foolish things (not just in Washington, but also overseas, as well as state governments and local governments) that I have a target-rich environment for analysis and commentary.

But sometimes there’s a personal motivation. I’m a resident of Fairfax County in Virginia, and my profligate local government levies a very onerous property tax on my house.

And what do I get in exchange? The lion’s share of the county budget goes to government schools, but that doesn’t benefit me since I found those institutions inadequate and put my kids in private schools.

The other major line item in the budget is police and fire protection. I’ve been fortunate to never need those services, but I recognize that they have value. But this still leaves the question of whether I’m overpaying or underpaying for the theoretical benefits I’m receiving.

If this story from the Washington Post is any indication, it’s the former rather than the latter.

One Fairfax County firefighter tripled his salary to more than $270,000 with overtime pay. A county police officer took home $175,000… A fire captain pocketed $163,000 in additional compensation, more than many of his colleagues make in a year. The eye-popping figures have prompted Fairfax County supervisors to review overtime pay and other compensation for employees as the county faces a budget squeeze. …more than 1,700 county employees who are not department heads earned more than $100,000 in 2016, according to county figures.

Needless to say, the unions representing these bureaucrats pushed back.

Public safety unions and officials strongly pushed back against the idea that overtime pay might be excessive, saying that some employees must work extra hours because of staffing shortages… Some were also rankled because many public safety employees have endured pay freezes in recent years and earn far less than many residents in one of the nation’s most expensive counties. “They are complaining about guys who are working overtime trying to make the median income for the jurisdiction,” said Joseph Woloszyn, president of the Fairfax County chapter of the Police Benevolent Association.

It’s certainly true that Fairfax is a rich county, driven in large part by the overpaid federal workforce, along with the various contractors, lobbyists, cronyists, and other insiders who have their snouts comfortably buried in the federal trough.

Given how all this unearned wealth distorts the local labor market, I have no problem with the idea that cops and firefighters presumably need to be paid more than the national average. After all, employers should pay what’s necessary to attract a sufficient number of qualified individuals to fill appropriate jobs.

This doesn’t mean, however, that 1,700 bureaucrats should be getting six-figure salaries. Or that police and fire departments are the right size.

Though I admit that this excerpt makes me wonder.

…the Fairfax County fire chief…said his department has been dealing with a chronic shortage of firefighters. Currently, he said, the department has 56 vacancies, forcing some to work shifts as long as 48 hours or be recalled to work each day.

In any event, I should count my lucky stars that I don’t live in Orange County, California, where the average firefighter is obscenely overpaid.

The bottom line is that firefighters and cops do real jobs and those jobs involve some danger. But that doesn’t mean they should be over-compensated.

P.S. And if you want good nationwide data on firefighters, here are some jaw-dropping numbers.

…vehicle fires declined 64 percent from 1980 to 2013. Building fires fell 54 percent during that time. When they break out, sprinkler systems almost always extinguish the flames before firefighters can turn on a hose. …as the number of fires has dropped, the ranks of firefighters have continued to grow — significantly. There are half as many fires as there were 30 years ago, but about 50 percent more people are paid to fight them. …Firefighters responded to 487,500 structure fires across the United States in 2013, which means each of the nation’s 30,000 fire departments saw just one every 22 days, on average. And yet, taxpayers are paying more people to staff these departments 24-7. As a result, the amount of money shelled out for local fire services more than doubled from 1987 to 2011, to $44.8 billion, accounting for inflation.

For what it’s worth, I very much suspect that the numbers in Fairfax County would match the nationwide data.

So it’s likely that firefighters (and cops) in Fairfax are overpaid. But it’s even more likely that there are too many of them given the possible dangers.

P.P.S. If you think libertarians are doctrinaire and impractical about firefighting, you’ll like this picture.

P.P.P.S. If you think firefighters are overpaid, you’ll like this video.

P.P.P.P.S. I don’t want to neglect police officers, so here’s some humor about a compassionate Pennsylvania cop and a Texas police exam. And here’s what to do if you need cops in a hurry.

Read Full Post »

Older Posts »

%d bloggers like this: