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Posts Tagged ‘Bureaucrats’

I’m not a fan of federal bureaucracies and I don’t like the undeserved wealth of the Washington, DC metro region.

So I’m very open to ideas that would address these problems.

Paul Kupiec of the American Enterprise Institute suggests, in a thought-provoking column in the Wall Street Journal, that one possible solution would be to move federal bureaucracies out of Washington.

Donald Trump pledged to rebuild America’s troubled inner cities, “drain the swamp,” and restore Americans’ confidence in their government. The president-elect can deliver on these promises by moving federal government agencies out of the nation’s capital and closer to the citizens they serve in cities like Detroit, Cleveland or Milwaukee.

He points out that two bureaucracies are currently looking to build new headquarters.

The FBI’s current headquarters, the J. Edgar Hoover Building, was built in 1975. It is now too small to meet the FBI’s needs, and it requires major repairs. The specifications for a new FBI headquarters include 2.1 million square feet of office space with access to adequate transportation. The construction budget alone is about $2.5 billion. …The Labor Department is also looking for a new headquarters… The new building could be as large as 1.4 million square feet and, if costs are similar to those proposed by the FBI, the building budget alone would exceed $1 billion.

So why, he asks, don’t we locate those headquarters in places that would benefit from federal redistribution?

…consider what relocating the FBI headquarters to Detroit would do. Moving 11,000 FBI employees would hardly make a dent in the D.C. economy. Over 275,000 people—over 14% of the workforce—are federal-government employees, according to the Office of Personnel Management. In contrast, 11,000 well-paid federal government jobs and $2.5 billion in construction spending would provide a significant boost to the Detroit economy, where less than 2% of the workforce are federal employees.

Here’s the basic argument.

With modern communications technology, there is no reason that the FBI’s new headquarters, or the headquarters of other federal government agencies, must be located in the nation’s capital. The concentration of federal agencies in a single area increases the potential for a breakdown of government services in the event of a terrorist attack… Reducing risk is but one benefit. It would also be healthy for the country to more broadly distribute the wealth and power of federal-government agencies across the nation.

And Kupiec points out that it’s not fair that the DC-metro region gains such disproportionate benefits from overpaid bureaucrats and fat-cat consultants.

According to the 2010 U.S. Census, 11 of the 20 richest U.S. counties—including the three richest counties—are in the Washington, D.C., metro area. Incomes near the national capital are bloated not only by generous federal-government payrolls, but also by “Beltway bandit” consultancy firms that provide contract services to federal agencies. It is little wonder that many Americans view the federal government as a money machine for bureaucrats and political insiders.

Here’s the most persuasive argument for moving government departments to other spots in America.

Taxpayers would save money if bureaucracies were built and operated outside of DC.

Many towns and cities across America would welcome the economic development and stability that accompanies a well-paid federal-agency workforce like the FBI or the Labor Department. The expense of managing the federal government should be used to spread wealth beyond the nation’s capital and revitalize the economies of America’s ailing cities. Moving agencies out of Washington will also save millions of dollars because the costs of acquisition, building maintenance and housing for federal employees will shrink outside of the Washington bubble. In 2016 federal employees in the D.C. area receive a 24.78% premium over the base federal pay scale because they work in a high-cost region, according to the Office of Personnel Management.

Part of me likes this idea, especially since the burden on taxpayers presumably would decrease.

But I confess to being conflicted on the issue. Here are my concerns.

  • Shouldn’t we focus on shutting down counterproductive bureaucracies rather than moving them? Whether based in Detroit or DC, departments such as HUD, Agriculture, Energy, Education, and Transportation shouldn’t exist.
  • If we move bureaucracies (whether they are necessary ones or useless ones), does that create the risk of giving other parts of the nation a “public-choice” incentive to lobby for big government since they’ll be recipients of federal largesse?
  • Will we simply get duplication, meaning a new bureaucracy somewhere in America without ever really getting rid of the original bureaucracy in Washington, DC?

Though maybe if I was in charge of the process, it wouldn’t be a bad idea.

I could locate some bureaucracies in the dodgy parts of cities such as Detroit. Especially departments such as HUD and HHS since they helped cause the economic misery in inner cities.

And the Department of Education could be placed somewhere like Newark where government-run schools are such awful failures.

As for other federal bureaucracies, I’m wondering whether seasonal switches would be possible? Maybe stick them in North Dakota in the winter and Brownsville, Texas, in the summer?

Any ideas from readers on this libertarian quandary?

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I routinely grouse about the heavy economic cost of red tape.

I’ve also highlighted agencies (such as the EEOC) that seem especially prone to senseless regulations.

And I’ve explained why private regulation actually is a very effective way of promoting health and safety.

Today, let’s get specific and look at the Food and Drug Administration. This bureaucracy ostensibly is supposed to protect us by making sure drugs and medical devices are safe and effective before getting approval, which seems like it might be a reasonable role for government.

But the FDA routinely does really foolish things that undermine public health. The likely reason is that the bureaucracy has a bad incentive structure. As Professor Alex Tabarrok has explained.

…the FDA has an incentive to delay the introduction of new drugs because approving a bad drug (Type I error) has more severe consequences for the FDA than does failing to approve a good drug (Type II error). In the former case at least some victims are identifiable and the New York Times writes stories about them and how they died because the FDA failed. In the latter case, when the FDA fails to approve a good drug, people die but the bodies are buried in an invisible graveyard.

This video from Learn Liberty looks at some data on how the FDA’s Type II errors have led to thousands of deaths, but mostly focuses on whether people and medical professionals should have the freedom to makes choices different from what the FDA has officially blessed.

It’s also worth mentioning that the process of drug approval is jaw-droppingly expensive, as Professor Tabarrok noted in another column.

It costs well over a billion dollars to get the average new drug approved and much of that cost comes from FDA required clinical trials. Longer and larger clinical trials mean that the drugs that are eventually approved are safer. But longer trials also mean that good drugs are delayed. And the more expensive it is to produce new drugs the fewer new drugs will be produced. In short, longer and larger trials mean drug delay and drug loss.

The FDA bureaucracy can’t even approve things it already has approved. There was a big controversy a few months ago about the EpiPen, which is a very expensive device that auto-injects medication to people suffering severe allergic reactions.

But the device is only costly because the FDA is hindering competition, as noted by the Wall Street Journal.

Epinephrine is a basic and super-cheap medicine, and the EpiPen auto-injector device has been around since the 1970s. Thus EpiPen should be open to generic competition, which cuts prices dramatically for most other old medicines. Competitors have been trying for years to challenge Mylan’s EpiPen franchise with low-cost alternatives—only to become entangled in the Food and Drug Administration’s regulatory afflatus. …the FDA maintains no clear and consistent principles for generic drug-delivery devices like auto injectors or asthma inhalers. …injecting a kid in anaphylactic shock with epinephrine…is not complex medical engineering. But no company has been able to do so to the FDA’s satisfaction.

Research from the Mercatus Center reveals that the FDA imposes ever-higher costs and gets ever-higher budgets, but also how the bureaucracy fails to deliver on its obligation to facilitate innovation.

The expense of putting drugs and devices through this system is almost unimaginable. The cost of bringing low- to medium-risk 510(k) medical devices to market averages $31 million, $24 million (75 percent) of which is dedicated solely to attaining FDA approval within an average of about six months. Any significant improvement to the device requires reapplication. For higher-risk medical devices where there may be significant health gains, the costs are about $94 million, $75 million (80 percent) of which is dedicated to attaining FDA approval. For drugs, the situation is much worse. It costs an average of $2.6 billion simply to get a drug through the FDA process and onto the market. This does not include postmarket monitoring, the terms of which are laid out by FDA upon approval. These costs have increased from about $1 billion between 1983 and 1994. …we continue to increase the funding and authority for FDA and assume that we will somehow boost innovation in medical products (drugs and devices) despite the growing obstacles. This has not happened. …Congress continues to increase funding for FDA through both the general fund and industry user fees…with the hope that performance goals and additional funding would increase FDA’s performance and lead to an increase in innovations. …but FDA finds strategic ways to narrowly meet each goal while frustrating the original goal of improving health outcomes through innovation.

By the way, the FDA also does really bone-headed things. I’ve previously written about the bureaucracy’s war against unpasteurized milk (including military-style raids on dairies!). Now the bureaucrats think soldiers shouldn’t be allowed to get cigars.

The Wall Street Journal has the details of this silly nanny-state intervention.

You might think GIs in Iraq and Afghanistan have enough to worry about with Islamic State and the Taliban. But it turns out they’ve also got a problem called the Food and Drug Administration. In August a new FDA rule went into effect that forbids tobacco makers and distributors from handing out free samples. Some companies that have been donating cigars to service members for decades have now stopped for fear that this is now illegal. The FDA nuttiness has attracted the attention of Rep. Kathy Castor, a Democrat who represents Florida’s 14th district, which includes “Cigar City,” or Tampa. She has introduced a bill to “reinstate the tradition of donating cigars to our military members to provide them with a taste of home while deployed.” Her press release notes that cigars are the “second-most requested item” from troops overseas. …cigars for service members is in question because it’s a proxy for the political war on tobacco, but the first casualty is common sense. The FDA’s bureaucrats are happy to have U.S. soldiers, sailors, airmen and Marines dodge bullets overseas but they’re horrified they might relax by lighting up a stogie.

But the nanny-state war against soldiers enjoying cigars is downright trivial compared to the deadly impact of the FDA’s attack on vaping.

Jacob Sullum of Reason outlines some of the horrifying details.

The Food and Drug Administration’s e-cigarette regulations, which took effect last week, immediately struck two blows against public health. As of Monday, companies that sell vaping equipment and the fluids that fill them are forbidden to share potentially lifesaving information about those products with their customers. They are also forbidden to make their products safer, more convenient, or more pleasant to use. The FDA’s censorship and its ban on innovation will discourage smokers from switching to vaping, even though that switch would dramatically reduce the health risks they face. That effect will be compounded by the FDA’s requirement that manufacturers obtain its approval for any vaping products they want to keep on the market for longer than two years. The cost of meeting that requirement will force many companies out of business… All of this is unambiguously bad for consumers and bad for public health. Yet the FDA took none of it into account…the Family Smoking Prevention and Tobacco Control Act…gave the FDA authority over tobacco products, a category to which it has arbitrarily assigned tobacco-free e-cigarettes, even when they contain nicotine that is not derived from tobacco or no nicotine at all. …A brief that 16 advocates of tobacco harm reduction filed last week in support of Nicopure’s lawsuit notes that the cost of the FDA’s regulations will far outweigh their benefit if they cause even a small percentage of vapers to start smoking again or deter even a small percentage of current smokers from switching. That’s because of the huge difference in risk between e-cigarettes and the conventional kind (at least 95 percent, according to the Royal College of Physicians)… The FDA acknowledges that its regulations might also harm public health by retarding the substitution of vaping for smoking. But it does not include that cost in its analysis, deeming it too speculative. The FDA literally assigns zero value to the lives of smokers who would have quit were it not for the agency’s heavy-handed meddling.

Oh, I suppose I also should mention that FDA red tape is responsible for the fact that Americans have a much more limited selection of condoms than Europeans.

I’m sure there’s a good joke to be made about the bureaucrats screwing us in ways that interfere with us…um…well, you know.

Let’s wrap up with some tiny bits of good news. First, Arizona’s Goldwater Institute has been remarkably successful in getting states to adopt “Right to Try” laws that give seriously ill people the right to try investigational medications.

Sadly, those laws will have limited use until there’s also reform in Washington. Fortunately, there’s some movement. Here’s a video from a congressional hearing organized by Senator Johnson of Wisconsin.

Here’s a second item that sort of counts as good news.

If there is one silver lining to the dark cloud of FDA incompetence, it’s that the bureaucrats haven’t figured out how to criminalize those who use drugs for “off-label” purposes (i.e., for reasons other than what was approved by the government). A good example, as reported by the New York Times, is a tooth desnsitizer that’s only been recently approved by the FDA (after being available for decades in nations such as Japan), and already dentists are using it to fight cavities.

Nobody looks forward to having a cavity drilled and filled by a dentist. Now there’s an alternative: an antimicrobial liquid that can be brushed on cavities to stop tooth decay — painlessly. The liquid is called silver diamine fluoride, or S.D.F. It’s been used for decades in Japan, but it’s been available in the United States, under the brand name Advantage Arrest, for just about a year. The Food and Drug Administration cleared silver diamine fluoride for use as a tooth desensitizer for adults 21 and older. But studies show it can halt the progression of cavities and prevent them, and dentists are increasingly using it off-label for those purposes. …Silver diamine fluoride is already used in hundreds of dental offices. Medicaid patients in Oregon are receiving the treatment…it’s relatively inexpensive. …The noninvasive treatment may be ideal for the indigent, nursing home residents and others who have trouble finding care. …But the liquid may be especially useful for children. Nearly a quarter of 2- to 5-year-olds have cavities

Since I’m not familiar with the history of the FDA, I wonder whether the bureaucrats have ever tried to block medical professionals from using drugs and devices for “off-label” purposes.

Let me close with one final point. Our leftist friends aren’t very interested in reforming the FDA.

Instead, they argue that the big problem is greedy pharmaceutical companies and suggest European-style price controls.

That could save consumers money in the short run, I’m sure, but it would gut the incentive to develop new medications.

One expert looked at the Rand Corporation estimates that such policies would lead to a decline in life expectancy of 0.7 years by 2016. He then crunched the numbers and concluded that the aggregate impact would be worse thing to ever happen. Even worse than the brutality of Mao’s China.

…let me put this in context. In 2060 there will probably be 420 million Americans and 523 million Europeans. And suppose that whatever changes we make in drug regulations today last for one human lifespan, so that everybody has a chance to be 55-60. So about a billion people each losing about 0.7 years of their life equals 700 million life-years. Since some people live in countries outside the US and Europe [citation needed] and they also benefit from First-World-invented medications, let’s round this up to about a billion life-years lost. What was the worst thing that ever happened? One strong contender is Mao’s Great Leap Forward, in which ineffective agricultural reforms and very effective purges killed 45 million people. Most of these people were probably already adults, and lifespan in Mao’s China wasn’t too high, so let’s say that each death from the Great Leap Forward cost what would otherwise be twenty healthy life years. In that case, the worst thing that has ever happened until now cost 45 million * 20 = 900 million life-years. Once again, RAND’s calculations plus my own Fermi estimate suggest that prescription drug price regulation would cost one billion life-years, which would very slightly edge out Communist China for the title of Worst Thing Ever.

I guess the bottom line is that the FDA is a typical regulatory agency, both incompetent and expensive. But if the statists have their way, things could get a lot worse.

P.S. While the regulatory burden in the United States is stifling and there are some really inane examples of silly rules such as the FDA’s war on vaping, I think Greece and Japan win the record if you want to identify the most absurd specific examples of red tape.

P.P.S. Here’s what would happen if Noah tried to comply with today’s level of red tape when building an ark. And here’s some clever anti-libertarian humor about deregulated breakfast cereal.

P.P.P.S. Just in case you think regulation is “merely” a cost imposed on businesses, hopefully today’s column drives home that red tape can have terrible consequences for human health. And don’t forget that bureaucratic red tape is the reason we’re now forced to use inferior light bulbs, substandard toilets, second-rate dishwashers, and inadequate washing machines.

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My main problem with bureaucrats is that there are too many of them (because government is too big) and that they are paid too much (almost twice the level of compensation as workers in the private sector).

But even the government was the proper size (America’s Founders had the right idea on that issue) and even if pay levels were more reasonable, that wouldn’t solve all problems. There’s also the issue of making sure that bureaucrats work hard and don’t cause trouble, something that is a big problem in government agencies and departments because of policies that make it virtually impossible to fire anybody.

I recently explored the issue of how to deal with bad bureaucrats and noted that civil service rules have the effect of shielding ” slackers, trouble makers, and other undesirable employees.”

We have an example from Oklahoma that is a perfect (in a rather disturbing way) illustration of this phenomenon.

A community is wondering why a teacher who is accused of lewd acts with a child is still getting paid. State agents arrested 48-year-old Shelley Jo Duncan, accusing her of having inappropriate contact with a 14-year-old boy. …messages detail the pair’s plans for future sexual encounters, including Duncan allegedly texting the boy she would give him “oral sex with a cough drop in her mouth.” ….The Tishomingo Public Schools Superintendent Ken Duncan, who is Duncan’s husband, said that she is entitled to her pay while she is suspended. “The district has been instructed by legal counsel, per the Teacher Due Process Act governed by Oklahoma statute, that the teacher is entitled to compensation during her suspension,” Duncan reportedly said during the meeting.

I don’t know whether to laugh or cry.

Why isn’t sexual contact with a child an immediate cause for termination? I can’t imagine that private employers would have any tolerance for this kind of behavior.

To be sure, the rule of law is vitally important. If there are legal procedures for dealing with bad bureaucrats, they should be followed. So, in this specific case, perhaps Ms. Duncan’s husband is correct and that she should be paid.

But this is why I wrote earlier this month that “there needs to be a much tougher approach when contract negotiations take place.” Simply stated, politicians like to curry votes from powerful interest groups, so contract negotiations between governments and government unions generally are a sham. All too often, the politicians and unions conspire against taxpayers.

This is why pay levels for bureaucrats tend to be exorbitant. It’s why pensions are so extravagant (and a fiscal nightmare, as I wrote just yesterday). And it’s why civil service rules protect deadbeats and sketchy people.

Unfortunately, there’s a big difference between identifying a problem and solving a problem. It doesn’t really matter if we can identify the “public choice” incentives that lead to bad decisions in government if we can’t then figure out the policies that counteract those bad incentives.

Yes, this is why a no-tax-increase position should be a no-brainer. And this is another piece of evidence why the natural profligacy of all governments should be constrained by spending caps. But even I will admit that those are macro-type solutions that only indirectly make it harder for politicians and bureaucrats to misbehave.

On that depressing note, I guess all that’s left is for us to decide whether Ms. Duncan deserves to be in the Bureaucrat Hall of Fame. For what it’s worth, I think we have to wait before making that decision. If she (and perhaps her husband) can manipulate the rules and get paid for 12 months while doing nothing, even though she was caught red-handed (or perhaps we should say Altoid-mouthed) for misbehaving with a child, she’ll deserve membership. And if you think that’s asking too much, don’t forget that a bureaucrat in India managed to get paid for more than two decades even though he stopped showing up for work.

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America’s main long-run retirement challenge is our pay-as-you-go Social Security system, which was created back when everyone assumed we would always have a “population pyramid,” meaning relatively few retirees and lots of workers.

But as longevity has increased and fertility has decreased, the population pyramid increasingly looks like a cylinder. This helps to explain why the inflation-adjusted shortfall for Social Security is now about $37 trillion (and if you include the long-run shortfalls for Medicare and Medicaid, the outlook is even worse).

But Social Security is not the only government-created retirement problem. State and local governments have “defined benefit” pension systems for their bureaucrats, which means that their bureaucrats, when they retire (often at an early age), are entitled to receive monthly checks for the rest of their lives based on formulas devised by each state (based on factors such as years employed in the bureaucracy, pay levels, contributions, etc).

Unlike Social Security (which has a make-believe Trust Fund), these pension systems are supposed to be “funded” in the proper sense, which means that money supposedly is set aside and invested every year so that there will be a big nest egg that can be used to pay benefits to future retirees.

At least that’s how it’s supposed to work in theory. In reality, politicians like promising big retirement benefits to government bureaucrats, but they oftentimes aren’t willing to actually set aside the money needed to fund the nest egg. After all, it’s more fun to spend the money appeasing other interest groups (state and local bureaucrats don’t approve of underfunding, but their retirement benefits generally are seen as a contractual obligation, so they don’t have much incentive to lobby for honest accounting).

The net result is that every retirement system for state government workers is underfunded. How far in the red? That’s a hard question to answer because you have to make long-run assumptions about the investment earnings of the various pension funds.

But the answer is going to be a big number regardless of methodology. According to a new report from the American Legislative Exchange Council, the shortfall is enormous.

When state pension funds are examined through the lens of a more realistic valuation, pension funding gaps are revealed to be much larger than reported in official state financial documents. This report totals state-administered plans’ assets and liabilities and finds nationwide total unfunded liabilities to be $5.59 trillion. The nationwide funding level is a mere 35 percent, which is one percentage point lower than two years ago. Combined across all states, the price tag for unfunded pension liabilities is now $17,427 for every man, woman and child in the United States. …Taxpayers are on the hook for the legal obligation to cover the promised benefits of traditional, defined-benefit pension plans. …When unfunded pension liabilities are viewed as shared debt placed on each individual, Alaska, where each resident is on the hook for a staggering $42,950, tops the list. Ohio and Illinois follow for the highest per person unfunded pension liabilities.

Here’s a map from the report. It’s bad news if your state is dark blue. And if your state is gray, your burden is relatively low.

Though keep in mind that these numbers are not adjusted for state income.

Louisiana, Mississippi, and Kentucky get bad scores, but they probably are in even deeper trouble that lower-ranked states like California and New Jersey where per-capita income is higher (yes, the cost of living is lower in those southern states, but that doesn’t matter since the relevant comparison is per-capita income vs per-capita pension liabilities.

The ALEC report is more pessimistic than other estimates, but that’s because they use more cautious assumptions about the potential investment earnings of the various pension funds that manage money for state and local bureaucrats.

State Budget Solutions uses a more reasonable valuation to determine the unfunded liabilities of public pension plans. Given that many plans’ assumed rates of return are too high and invite risk, State Budget Solutions uses a more prudent rate of return, rather than the loftiest goals of money managers. This study uses a rate of return based on the equivalent of a hypothetical 15-year U.S. Treasury bond yield. …. State Budget Solutions is not alone in calling attention to the flawed accounting practices of state agencies. A recent study released by the Stanford Institute for Economic Policy Research, Pension Debt: United States Public Employee Pension Systems, also suggests that states use unrealistically high rates of return to discount their pension liabilities. The study found that pension debt totals $4.8 trillion, a finding similar to this report.

A new study from Pew isn’t nearly as pessimistic, but it still shows a huge gap.

The nation’s state-run retirement systems had a $934 billion gap in fiscal year 2014 between the pension benefits that governments have promised their workers and the funding available to meet those obligations. …This brief focuses on the most recent comprehensive data from all 50 states and does not reflect the impact of weaker investment performance in fiscal 2015, which averaged 3 percent. Performance has been even weaker in the first three quarters of fiscal 2016. …Total pension debt is expected to be over $1 trillion for state plans, an increase of more than 10 percent from fiscal 2014. When combined with the shortfalls in local pension systems, this estimate reaches more than $1.5 trillion for fiscal 2015 and will likely remain close to historically high levels as a percentage of U.S. gross domestic product (GDP).

Here’s a visual from the report showing how the fiscal outlook for state pension systems has deteriorated over the past 15-plus years.

Equally troubling, most states are heading in the wrong direction.

…this brief shows that 15 states currently follow policies that meet the positive amortization benchmark—exceeding 100 percent of needed funding—and can be expected to reduce pension debt in the near term. The remaining 35 states fell short; those performing the worst on this measure typically had the largest unfunded pension liabilities.

Here’s the chart from the study. As you can see, Kentucky, New Jersey, and Illinois are falling deeper in the red at the fastest rate.

Kudos to New York and West Virginia, by the way, for being the most aggressive in trying to address long-run problems.

Moody’s Investor Services also has a new report on pension shortfalls. Here are some of the highlights, or perhaps lowlights would be a more appropriate word.

Total US state aggregate adjusted net pension liabilities (ANPL) totaled $1.25 trillion, or 119% of revenue in fiscal 2015, Moody’s Investors Service says in a new report. The results, based on compliance with new GASB 68 accounting rules, set a new ANPL baseline and are poised to rise for the next two fiscal years as market returns fall below annual targets. “The median return for public pension plans in FY 2016 was 0.52% compared to an average assumed investment return of 7.5%,” Moody’s Vice President — Senior Credit Officer Marcia Van Wagner says. “We project that aggregate state ANPL will grow to $1.75 trillion in FY 2017 audits.” Moody’s new report also introduces a new “Tread Water” benchmark, which measures whether states’ annual contributions to their pensions are enough to keep the unfunded net liability from growing. …there were several states whose pension contributions were notably below the Tread Water mark, including Kentucky (Aa2 stable), New Jersey (A2 negative), Illinois (Baa2 negative), and Texas (Aaa stable). …The states with the highest pension burdens — measured as the largest three-year average ANPL as a percent of state governmental revenue — were consistent with previous years. Illinois topped the list with pension liabilities at 280% of total governmental revenue, followed by Connecticut (Aa3 negative) at 209%, Alaska (Aa2 negative) at 179%, Kentucky at 162%, and New Jersey at 157%.

Wow, it doesn’t matter what report you look at, or what methodology is being used, Illinois, New Jersey, and Kentucky are a big mess (Alaska’s numbers also are awful, but the state – within certain limits – can use energy tax revenues to cover much of its shortfall).

So what’s the solution to all this mess? As I noted a couple of months ago when sharing other grim numbers about state pension systems, the answer is to, 1) stop promising excessive benefits to bureaucrats (and stop giving them excessive pay as well), and 2) switch to “defined contribution” plans so that workers have their own piles of money and the underfunding problem automatically disappears.

P.S. I’ve already granted the “Politician of the Year Award” to the President of the Philippines, the Prime Minister of Malaysia, and the President of France, which probably means I should have a “Politician of the Month Club” instead. And if the Award is expanded, the politicians from the Solomon Islands obviously would be good candidates for the honor.

There was a public outcry in the Pacific island nation in May 2015, when a parliamentary commission voted to exempt MPs’ earnings from tax. …now the Court of Appeal – the Solomon Islands highest court – has said that MPs can benefit from tax-free salaries after all. It ruled that while the policy may be unpopular with the public, it’s still legal.

Living off taxpayers while paying no tax. Who do they think they are, IMF or OECD bureaucrats?

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What are the main problems with government bureaucrats?

Is it that they’re paid too much? Given that they get far more compensation than workers in the economy’s productive sector, that certainly true.

Is it that there are too many of them? Well, we have lots of bureaucracies that shouldn’t exist, such as HUD, Education, Transportation, Agriculture, etc. So that’s true as well.

But there’s another possible answer. People employed by government take advantage of preferential rules in ways that should get all decent people upset.

Writing for Reason, Eric Boehm tells us about a cop who successfully mugged taxpayers in Paterson, New Jersey.

Despite not having to show up for work since June 2007, Manuel Avila received periodic increases in pay, managed to double his monthly pension and qualified for free healthcare for the rest of his life at the expense of city taxpayers. Avila qualified for all those benefits while spending the past nine years on paid leave from the Paterson, New Jersey, police department because he was under investigation for having sex with a female prisoner at the city’s jail.

Wow, go fishing every day, get pay increases, a fat pension, and free healthcare. Where can I sign up for that deal?

Government, of course.

And let’s not overlook sex with a female prisoner, which gives a whole new meaning to the notion of fringe benefits. Reminds me of the Pennsylvania bureaucrat who came up with the clever idea of trading welfare benefits for sex.

But the story is actually more disturbing (at least from the perspective of taxpayers) than you think.

It gets worse, though, because that crime would never have happened if Avila’s bosses hadn’t already been trying to give his retirement benefits a little boost. …Avila—apparently with plenty of help, or at least an abundance of people willing to look the other way—was able to boost his annual pension to about $70,000 from an estimated $32,000 if he had been forced to retire in 2007 when a police psychiatrist recommended removing Avila from the force. “But instead of forcing Avila out of the police department, city law enforcement officials decided to allow him to stay on the job for another six months so he could reach a critical pension milestone of 20 years, the court records show,” the Paterson Press wrote. While there, he was charged with sexually assaulting a female prisoner. Those charges were dropped in 2010 after the city paid an undisclosed amount of money to the accuser as part of a settlement, but Avila remained on paid leave from the department until finally retiring this year.

This is galling. If Mr. Avila misbehaved and was declared unfit, why wasn’t he immediately terminated?

And now that we’ve learned about this scandal, why aren’t the officials who enabled this ripoff being fired?

At the risk of repeating myself, the answer is government.

There are two broader policy lessons from this scandal.

First, the use of “defined benefit” pension systems for bureaucrats should be discontinued. By way of background, these “DB” plans promise workers guaranteed monthly payments based on formulas including factors such as years worked and highest pay levels. There is no reason why DB plans can’t be feasible and successful (indeed, the Netherlands has a private Social Security system based on this model), but politicians at the state and local level repeatedly have demonstrated that they are incapable of operating this type of system, both because they promise lavish benefits (on top of overly generous pay levels) as a means of buying political support (using our money) from government workers and because they then don’t set aside enough money to finance the generous benefits they have promised. That system may be good for getting reelected in the short run, but it’s also why there’s a multi-trillion dollar shortfall that is contributing to deep fiscal problems in states such as Illinois and California. To stop from going deeper in the red, states should switch to “defined contribution” plans, which work similar to the IRAs and 401(k)s that are now prevalent in the private sector.

Second, something needs to be done to curtail the power of government unions. It’s not just that they conspire with politicians to get excessive pay for bureaucrats, but they compound that damage by also insisting on rules that make it very difficult to discipline or terminate problem employees. In the private sector, employees generally work “at will,” which means they can be fired without reason (this is one of the reasons the United States is near the top in the World Bank’s Doing Business ranking. In government, by contrast, slackers, trouble makers, and other undesirable employees are shielded from this discipline. And that results in cases (such as the example discussed above) that are bad for taxpayers and bad for government. I don’t know if this means that unions should be prohibited (as even President Franklin Roosevelt believed), but surely one lesson to be learned is that there needs to be a much tougher approach when contract negotiations take place.

P.S. Let’s shift to a different topic. I’ve written many times about the gap between intentions and results in government. It’s very common to see politicians vote for laws that (at least in some cases) they think will help people, but they fail to recognize the indirect or second-order effects of government intervention.

Now we have another example. Almost all politicians will agree that it’s a good idea to prohibit child labor in poor nations. But what if poor families don’t have any better options? Could it be that government intervention will hurt the people who are supposed to be helped?

According to the World Bank (not normally a hotbed of libertarian thought), the answer is yes.

The study explores the law that increased the minimum employment age from 14 to 16 in Brazil in 1998, and uncovers its impact on time allocated to schooling and work in the short term and on school attainment and labor market outcomes in the long term. The analysis uses cross-sectional data from 1998 to 2014… The estimates show that the ban reduced the incidence of boys in paid work activities by 4 percentage points or 27 percent. …The study follows the same cohort affected by the ban over the years, and finds that the short-term effects persisted until 2003 when the boys turned 18. The study pooled data from 2007 to 2014 to check whether the ban affected individuals’ stock of human capital and labor market outcomes. The estimates suggest that the ban did not have long-term effects for the whole cohort, but found some indication that it did negatively affect the log earnings of individuals at the lower tail of the earnings distribution.

So the bottom line is that lower-skilled workers missed a chance to earn money when they were young and they then suffered income losses over time as well.

Bastiat certainly wouldn’t be surprised by this outcome. And if the lower-skilled workers understood how they were hurt, I’m sure that they wouldn’t feel very grateful to politicians for their “compassion.”

P.P.S. This reminds me of the “sweatshop” controversy. The left wants to ban factory work in the developing world because they don’t understand or appreciate that such jobs are a great opportunity when nations are at a certain stage of development.

P.P.P.S. This isn’t the first time that the World Bank has produced good research. In 2014, the bureaucrats released a good study showing how high tax rates facilitate corruption. And in 2012, they issued a study explaining how large public sectors undermine prosperity.

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As a public finance economist, I normally focus on big-picture issues such as the economically debilitating effect of excessive government spending and punitive taxation.

But as a human being, what irks me most about big government is the way that insiders use the system to enrich themselves. I don’t like it when politicians, bureaucrats, lobbyists, contractors, cronies, and other well-connected interest groups funnel money to themselves at the expense of ordinary people.

Especially when taxpayers pay twice. They have less take-home income because of higher tax burdens and over time their pre-tax income doesn’t grow as fast because a bloated public sector reduces growth.

In other words, a lose-lose situation for regular folks.

But it’s a win-win situation for insiders. Consider, for instance, this exposé in the Daily Caller about a bureaucrat who double-dipped by getting a big paycheck from Uncle Sam an interior designer while also getting outside contracts as – you guessed it – an interior designer.

A fashionista from Beverly Hills, Calif., collected millions in interior design contracts from federal agencies by claiming to be “disadvantaged,” while simultaneously working at the Department of Veterans Affairs (VA) sending work to design companies. Ronda C. Jackson was a no-show at her VA job, colleagues said. Records show she instead spent her time running a design company that got $7 million in contracts from the VA and other government agencies since 2008, reselling them marked-up goods like five-seat tables for $17,000.

Here are some of the sordid details.

Jackson worked as a full-time federal employee at the Los Angeles VA center in fiscal years 2010 and 2011, which ran from Oct. 1, 2009 to Sept. 30, 2011. Pay records show she worked as a GS-12 level interior designer and made $80,000 each year. Colleagues said they never saw Jackson in the office. …In fiscal years 2008 through 2010, the company had $222,000 in contracts with the VA, federal records show. …she was being paid as a full-time employee for almost a whole year while also working on a contract for the same agency and at the same hospital and for the same type of work. Her job as an employee was to buy furniture for the VA, and her job as a contractor included selling it.

Wow, sort of reminds me of the bureaucrat from the National Weather Service who created a contractor position for himself.

But Ms. Jackson took it to the next level, getting a paycheck and being a contractor at the same time. How did she get away with all this?

Well, her boss set a good example of how to waste money and bilk the system.

Robert Benkeser, a high-level manager in charge of facilities, was told that Jackson appeared to have a no-show employment arrangement, but did nothing. Benkeser is the same manager who was in charge of an official vehicle fleet from which 30 of 88 cars disappeared. He fired the employee who exposed the missing cars as well as the fact that government credit cards from the same unit appeared to have been used fraudulently. Benkeser received only “counseling” for the misconduct.

Gee, I wonder if he was one of the VA bureaucrats who got a big bonuses after the agency put veterans on secret waiting lists?

But what makes Ms. Jackson special is the way she doubly double-dipped.

That’s an odd way of describing something, but somehow appropriate because she got herself classified as “disadvantaged” so that she could get contracts without the usual competitive bidding process.

A 2009 contract, in which records from USASpending.gov classify the company as HUBZone while listing its Beverly Hills address, says she was paid $72,000 for outfitting the Federal Aviation Administration with “framed artwork for CMEL guest room and main building [and] conference rooms.” The company subsequently moved to Los Angeles. Jackson charged $70,000 for an unspecified “21 [inch] freestanding unit” and $17,000 for a five-person outdoor table. Ninety-eight percent of the nearly $7 million in contracting dollars awarded to Jackson’s company came without the government weighing her offer against those of other companies.

So instead of paying twice as much as something would cost in the private sector, which is typical for government, her no-bid scams probably resulted in taxpayers paying four times as much as necessary. So she was a bureaucrat, a contractor, and disadvantaged, which we can consider a form of triple-dipping.

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

There’s no question that Ms. Jackson has “earned” her way into the Bureaucrat Hall of Fame. Congratulations, Ronda!

By the way, the article raises a bigger issue.

Jackson’s case underscores questions about VA’s army of 167 full-time interior designers. Nearly every VA hospital in the country has one or more.

I can understand why it might be acceptable to have one interior designer (assuming the VA stays in the business of running hospitals, which obviously shouldn’t be the case), but why 167 of them?

Oh, it’s government and we need to remember what Milton Friedman said about “other people’s money.” Forget that I even asked such a silly question.

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Back in 2013, I got very upset when I learned that senior bureaucrats at the IRS awarded themselves big bonuses, notwithstanding the fact that the agency was deeply tarnished by scandal because of its efforts to help Obama’s reelection campaign.

That’s when I decided to put forth my “First Theorem of Government,” which simply states that the public sector is a racket for the benefit of a ruling class comprised of bureaucrats, interests groups, cronies, and other insiders.

They have figured out how to line their pockets and live very comfortable lives at the expense of people in the economy’s productive sector.

The same thing is true on the other side of the Atlantic Ocean. The U.K.-based Daily Mail reports that senior bureaucrats in the country’s government-run healthcare system get lavish taxpayer-financed pension.

Hundreds of NHS managers have amassed million-pound pension pots while presiding over the worst financial crisis in the history of the health service… As patients face crippling delays for treatment, A&E closures and overcrowded wards, bureaucrats have quietly been building up huge taxpayer-funded pensions. They will be handed tax-free six-figure lump sums on retirement, and annual payouts from the age of 60 of at least £55,000 – guaranteed for life.

Here are some of the details, all of which must be especially aggravating for the mistreated patients who suffer because of substandard care from the government.

Nearly 300 directors on NHS trust boards have accrued pension pots valued at £1million or more; At least 36 are sitting on pots in excess of £1.5million – with three topping a staggering £2 million; The NHS pays a staggering 14.3 per cent on top of employees’ salary towards their pension – almost five times the average of 3 per cent paid in the private sector; …About 500 earn more than the Prime Minister – after Health Secretary Jeremy Hunt ordered them to ‘show restraint’ on executive pay. …the scheme every year pays retired staff £10 billion more than it takes in. That black hole has to be filled by the taxpayer. The subsidies enable NHS executives – including managers, human resources bosses and directors of ‘corporate administration’ – to build up vast pensions, at minimal personal expense.

Here’s the bureaucrat with the biggest pile of loot from taxpayers.

The biggest single beneficiary is Professor Tricia Hart, who retired as chief executive of South Tees Hospitals NHS Foundation Trust in January with a £2.6 million pension. That figure entitled her to a lump sum of at least £335,000 on retirement, plus an inflation-proof annual pension of £110-115,000. …at least four HR directors have amassed million-pound pensions.

By the way, I have nothing against people accumulating big nest eggs. Even if they work for the government.

My objection, as discussed in yesterday’s column about state and local bureaucrats in America, is when bureaucrats have special taxpayer-financed deals.

Especially, as we see all too often in the U.K., when taxpayers don’t even get good healthcare in exchange for the lavish salaries and benefits.

Almost four million people are now waiting for cataract surgery, hip and knee replacements and other routine operations. The number of people forced to wait more than four hours in A&E has doubled in two years. And wards are full of elderly people who cannot be discharged – because there are no care home places for them.

A spin doctor tried to rationalize and justify the cozy scheme for bureaucrats.

…a spokesman for NHS Pensions stressed that…The amounts individuals accrued were a result of the ‘rules and regulations’ of the NHS scheme. ‘What people get paid is a matter for NHS trusts,’ he added.

I’m amused by the assertion that the lavish pensions are the result of simply following the “rules and regulations.” That’s precisely the point. Government insiders write the rules and regulations and they inevitably produce systems that are very good for them and not so good for taxpayers.

I’m also amused (and when I write “amused,” I actually mean “irritated” or “appalled”) at the claim that compensation levels are “a matter for NHS trusts”. If the spin doctor was talking about a private company, I would agree. As I’ve argued before, pay levels in private companies should be determined by managers and stockholders.

But we’re talking in this case about pay levels in a government bureaucracy. And notwithstanding the elitist attitude of some government officials, taxpayers have every right to get outraged when they learn that their money is being squandered on excessive pay and gold-plated benefits.

It’s a problem all over the world.

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I’ve written (some would say excessively) about the fact that America has too many bureaucrats and that they’re paid too much.

That’s true in Washington. That’s true at the state level. And it’s true for local governments.

But since I’m a big believer in beating a dead horse, let’s revisit this issue. We’ll narrow our focus today and look solely at the issue of retirement benefits for state and local bureaucrats.

Why? Because, as explained by Andrew Biggs of the American Enterprise Institute, the unfunded liability for these schemes has mushroomed into a giant $5 trillion problem.

If the Actuarial Standards Board enacts recommendations from its Pension Task Force, actuarial valuations for state and local government pensions will report unfunded liabilities of over $5 trillion and funding ratios of just 39 percent. The public pensions industry will hate it, but those figures are the best available measures of the costs of public employee retirement plans. …That $5.2 trillion is the number most economists would think is most relevant to considering the costs of public sector pensions. …The simple reality is that public pension underfunding is a significant problem that can only really be addressed by increasing contributions or by lower pension benefits, choices that pretty much everyone involved in the pension world would prefer to avoid.

You won’t be surprised to learn that some states are more irresponsible than others.

CNBC reports that Nebraska is the most prudent and Alaska is the worst (politicians can’t resist squandering oil revenue). Several blue states rank poorly (think Illinois, Connecticut, California, and New Jersey), but there also are red states (such as Louisiana and Kentucky) that have made very foolish promises.

In Nebraska, for example, the pension liability amounts to about $386 per person, the lowest in the nation. That compares with Alaska ($19,394 per person: the highest in the country), Illinois ($15,158 per person) and Connecticut ($14,769). The average pension shortfall in 2014 amounted to $4,383.

The Wall Street Journal has an interactive table that allows readers to see which states have the biggest shortfall.

Meanwhile, Governing has an interactive map showing which states have the biggest gaps.

In other words, state and local bureaucrats have been promised a lot of money when they retire.

Much more money than is available.

And when you add Social Security benefits to the mix, as Andrew Biggs has calculated, you wind up having lots of bureaucrats enjoying very lavish levels of retirement income.

I tabulated the pension benefits paid to full-career “regular” state government employees (meaning, non-public safety) retiring in 2012. For states in which public employees participated in Social Security, I estimated the Social Security benefit the retiree would be eligible to receive. And finally, I compared total retirement benefits to the worker’s earnings immediately preceding retirement. …Mississippi paying the lowest replacement rate of 54% of final earnings. …West Virginia paid the most generous benefits, equal to 115% of final earnings, followed by New Mexico (113%), Oregon (105%), California (102%) and, yes, conservative Texas (101%).

Here’s a map that accompanied the article.

But maybe big numbers, maps and tables are too abstract.

To give some examples of how this is leading to a fiscal crisis, consider these recent news reports.

A story from the Las Vegas Review-Journal:

Nevadans should brace for reduced services, higher taxes or both — the necessary consequence of the Public Employee Retirement System of Nevada (PERS) having badly missed its investment target last year…PERS has now missed its target over the past five, 10, 15, 20 and 25 years — suggesting that another taxpayer-rate hike is on its way. Remarkably, this shortfall has occurred even though markets have nearly tripled from their 2009 lows, and currently sit at or near all-time highs. Nevada’s soaring pension costs — ranked third-highest in the nation at 9.8 percent of own-source revenue, according to 2013 data from the Public Plans Database — aren’t just due to overly optimistic investment assumptions, however. Another factor is the extraordinarily generous nature of the benefits.

A column from the Orange County Register:

…in the world of public sector pensions – among the biggest institutional investors in global markets – politicians…pretend they can count on big investment returns every year, while disregarding warning signs, mounting debts and increasingly unsustainable pension systems. We’re seeing the latest pension fund returns come in, and almost uniformly, it was a terrible year for states – and thus taxpayers. The California Public Employees’ Retirement System, the largest U.S. public pension fund, logged a paltry annual return of 0.6 percent. …CalPERS is currently only 76 percent funded, a figure that will inevitably drop given the latest weak returns.

A report from the Portland Tribune:

Oregon’s major business groups want lawmakers to start dealing with rising public pension costs as early as the session that opens Feb. 1. Although those costs start to kick in with the 2017-19 budget cycle — 18 months away — advocates say it’s not too early to whittle down an unfunded liability projected at $18 billion over the next few decades. …projected increases in contributions to PERS, which covers about 95 percent of Oregon’s public workers, will eat deeply into what they can spend over the next several two-year budget cycles. Cheri Helt, co-chair of the Bend-La Pine School Board, says pension costs will jump from the current 16 percent of payroll to 20 percent in 2017-19, and to 25 percent in the cycle afterward. …Jamie Moffitt, vice president and chief financial officer for the University of Oregon, says rising pension costs will eat up 40 percent — about 2 percentage points — of the 5.5 percent average annual increase in tuition.

An editorial about New Jersey in the Wall Street Journal:

New Jersey’s Senate president is in a Brando-like fight with government unions that he says are trying to extort or bribe legislators into doing their bidding. …At issue is the woefully underfunded state pension system. The teachers union wants to put a measure on the November ballot to amend the state constitution to require quarterly state pension payments of increasing amounts. …government unions have so much political sway over politicians that they often call the shots on their own pensions and benefits. …New Jersey’s public pensions are underfunded to the tune of $82 billion. Thomas Healey of the state’s bipartisan Pension and Health Benefit Study Commission notes that pensions and health care now eat up 11% of New Jersey’s budget, and without reform this will grow to 28% by 2025. …The pension commission has proposed reforms—including a shift to a hybrid retirement plan that includes features more akin to a 401(k)—but unions have blocked them. They now want voters to rewrite the state constitution so pension reform would be all but impossible.

A column about the corrupt system in Illinois:

Illinois’s government, says [Gov.] Rauner, “is run for the benefit of its employees.” Increasingly, it is run for their benefit when they retire. Pension promises [are] unfunded by at least $113 billion… The government is so thoroughly unionized (22 unions represent almost all government employees), that “I can’t,” Rauner says, “turn on a light switch without permission.” He exaggerates, somewhat, but the process of trying to fire someone is a career, not an option. …high-tax Illinois will continue bleeding population and businesses, but with one contented cohort — the Democratic political class, for whom the system is working quite well.

The crux of the problem is that most state and local governments have “defined-benefit” plans for bureaucrats, which means that taxpayers are on the hook to provide retiring bureaucrats a specific amount of benefits (not just retirement income, but other goodies such as health care) based on formulas that count years in the workforce, highest salary levels, and other factors. That may not sound totally unreasonable, but politicians realize they can buy votes by cutting deals with government unions and providing retirement benefits that are extremely generous, especially compared to what’s available for workers in the private sector.

But that’s simply one part of the problem. The other part of the problem is the employers with defined-benefit plans (usually referred to as “DB plans”) are supposed to set aside money in investment funds so that there’s a growing pool of assets that can be used to pay for the lavish benefits promised to the bureaucracy. But as we’ve already learned, politicians often are reluctant to take this step. They like committing lots of future money to bureaucrats, but when putting together annual budgets, they generally can buy more votes by allocating money to things like schools and roads rather than depositing money into a pension fund.

So the net result is that there’s a big unfunded liability, meaning that the amount that politicians have promised to give bureaucrats is larger than what’s set aside in the pension funds. And to make matters worse, the pension funds usually have dodgy accounting (they assume the investments will earn more money than is realistic). Which is why the actual shortfall is about $5.2 trillion, as noted above.

Given this ticking time bomb, some of you may be wondering why the title says there’s a libertarian quandary. Surely the answer is to cauterize this fiscal wound with immediate cuts and to avoid an even bigger long-run disaster by shifting newly hired bureaucrats to a defined-contribution system such as IRAs or 401(k)s. This type of reform automatically eliminates any liability for taxpayers since retirement benefits for bureaucrats would be solely a function of contributions to retirement accounts and the investment performance of those funds (most state and local bureaucrats also are part of the Social Security system).

Yes, that is the answer, but the quandary (to add to my collection) is whether the federal government should force, or even encourage, this type of reform. Don’t state and local governments, after all, have the right to make stupid decisions?

Writing for the Wall Street Journal, Ed Bachrach argues that Uncle Sam should limit these suicidal policies.

The pensions of states and local governments are, collectively, trillions of dollars in the hole. This debt is crippling budgets and will dump an enormous burden on future generations. Yet state and local politicians have proven that they cannot, or will not, solve the problem. The federal government ought to step in. But how? Instead of bailing out these pensions, Congress should pass a law allowing states and local governments to reduce promised benefits—something that is now illegal under some states’ statutes or constitutions. …Many pensions allow retirement at age 55; states and local governments could mandate that benefits cannot be drawn until age 65. Payments could be capped at 150% of the median income in the local jurisdiction. Automatic cost-of-living increases that now exceed expected inflation could instead be tied to increases in the median income. …Local governments must also be required to terminate their defined-benefit plans. These should be replaced with defined-contribution plans, like 401(k)s or 403(b)s… Rep. Devin Nunes (R., Calif.) proposed withholding federal aid to government entities that don’t accurately report pension funding. That would be a step forward but would not solve the problem of underfunding.

I obviously agree that there should be no bailouts, but I’m still not convinced that Washington should mandate good policy by state and local governments.

Federalism means the freedom to adopt good policy…but also the leeway to commit fiscal suicide.

Though Andrew Biggs points out that the part about accurate reporting certainly sounds reasonable.

Congress has a tremendous opportunity to require state and local government employee pension plans to accurately disclose their multi-trillion dollar unfunded liabilities. …For years, economists and government agencies like the Congressional Budget Office have called for so-called “fair market valuation,” which both more accurately calculates the value of public pension liabilities and accurately tells those plans that taking more investment risk doesn’t make their plans cheaper. …there’s legislative language already written: Rep. Devin Nunes’s Public Employee Pension Transparency Act (PEPTA), which has a number of Congressional co-sponsors including House Speaker Paul Ryan, would require state and local plans to accurately disclose their liabilities using fair market valuation. The federal government would respect state and local rights by not forcing any changes to how pensions are funded, but Nunes’s plan would require that state and local governments to tell the public – including people thinking of purchasing municipal bonds – how much they really owe to their pensions.

P.S. By the way, advocates of limited government don’t experience many victories, but there actually was a very good reform of the pension system for federal bureaucrats during the Reagan years. Yes, federal bureaucrats are still over-compensated, but it’s not nearly as bad as it used to be. Yet another example of how Reaganomics was a success.

P.P.S. Shifting to bad news (or laughable news), the hacks in California tried to argue that lavish pensions for bureaucrats boost the economy. Andrew Biggs does a great job of debunking this nonsense.

The California Public Employee Retirement System (CalPERS) issued a report in July claiming that its benefit payments to retired government employees in 2013-2014 “supported 104,974 jobs throughout California and generated more than $15.6 billion in additional economic output.” …To reduce pension benefits for public employees, the study implies, would harm the overall California economy. …This study is nothing short of propaganda that wouldn’t get a passing grade in a freshman economics course. …the CalPERS study lacks one important component, called “counting both sides of the equation.” It needs to count economic costs as well as economic benefits. …CalPERS doesn’t create money out of thin air. Every single dollar of CalPERS benefits comes from a dollar that taxpayers or government employees contributed to the program or from the interest earned on those contributions.

Sounds like the bureaucrats at CalPERS should be working for the Congressional Budget Office.

P.P.P.S. The focus of this column is on the inherent instability of defined-benefit pension plans for bureaucrats, but let’s not lose sight of the fact that the underlying issue is that bureaucrats are ripping off taxpayers. Here are some blurbs from a Reason report by Eric Boehm on how this scam works in California.

If public service truly is a sacrifice, then join me in shedding a tear for the 20,900 public workers in California who pulled down more than $100,000 in retirement benefits during 2015. …Leading the way for 2015 was Michael Johnson. The former Solano County administrator received a $388,407 pension last year. …Rounding out the top three are Stephen Maguin, a former Los Angeles County Sanitation District general manager who pulled down $340,811 in 2015 and Joaquin Fuster, a former UCLA professor who got a pension worth $338,412 last year. …Curtis Bowden, a former member of the California Highway Patrol…retired all the way back in 1947, which means he’s been collecting pension checks for 68 years, after working just 5.3 years for the state. He got $24,800 from CalPERS in 2015.

Wow, I’m not sure what’s more impressive, Getting an annual pension of nearly $400K after being a country bureaucrat or working for just a bit over five years and getting 68 years worth of retirement checks?

Seems like both of them should be part of the Bureaucrat Hall of Fame.

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My biggest complaint about government employees is that they work for bureaucracies that shouldn’t exist. As far as I’m concerned, they may be the most wonderful, conscientious, and hard-working people in the world, but we shouldn’t have a Department of Housing and Urban Development or a Department of Agriculture, so these folks – by definition – are getting dramatically overpaid (i.e., anything about $0).

My second main complaint is that bureaucrats are overpaid relative to their counterparts in the private sector. About twice as much when you include the value of both wages and benefits.

The unions representing bureaucrats sometimes try to argue that this isn’t true, but I always point out the data on voluntary quit rates, which are much higher in the private sector compared to government. Needless to say, this is because folks who get cushy government jobs know they’ve won the employment lottery and have very little desire to switch to the private sector (where, as Dan Aykroyd explained in Ghostbusters, “they expect results”).

A third complaint is that politicians can’t resist catering to the unions that represent government employees, which means not only excessive compensation but also absurdly inefficient rules designed to protect loafers, scroungers, and con artists in the bureaucracy.

Let’s review the example of Queon Jackson. As reported by the Boston Globe, he’s pocketed a lot of money while doing absolutely nothing.

A former acting headmaster in Boston, placed on paid leave more than three years ago amid an investigation into credit card fraud, collected $375,000 in pay during his absence.

In the private sector, employment often is a tenuous situation. You can be fired “at will,” which means for just about any reason.

But unions strike deals with compliant politicians (from the perspective of elected officials, bureaucrats are a special interest group with lots of voters and lots of campaign cash) to provide so-called employment-protection rules for government employees.

And these rules make it very difficult and very expensive to deal with bad bureaucrats.

And it seems that Mr. Jackson meets that definition.

Jackson’s case reflects the thorny issues school systems face when union-protected employees are under federal investigations that drag on for months or years without charges being filed. Jackson, who was classified as an assistant director at the time of his paid leave, is a member of the school system’s union for midlevel school administrators, and the school system would have had to establish just cause to fire him. Thomas Scott, the executive director of the Massachusetts Association of School Superintendents, said…The choice…comes down to this: Either put the person in a low-profile desk job and face a potential public backlash, or fire the employee and run the risk of a lawsuit.

Here’s why Jackson got in trouble.

The school system originally placed Jackson on leave in February 2013, after learning the Secret Service was investigating him for an alleged role in fraudulently obtaining credit and then not paying the bills. But Jackson had contended that he was victimized by someone who stole his identity in an attempt to buy a car.

Though he already had a shady background when he first entered the bureaucracy.

In 2000, a few months before the district hired Jackson as a teacher, he admitted to sufficient facts for a finding of guilty in a drug case and a domestic abuse case that required him to take an anger-management course. That type of plea is commonly used by defendants to avoid a criminal record. …Jackson, who was a state social worker at the time, was charged with possession with intent to distribute counterfeit drugs.

Returning to the current situation, it’s not clear from the story, but I gather investigators from the Secret Service didn’t have enough evidence to nail Jackson, so the school system had no choice but to not only keep him on the payroll, but also to give him a new position.

Now Queon Jackson…is back. …The school system quietly cleared Jackson to return to work on May 9 and gave him a desk job at the agency’s headquarters and the title “special assistant.” The move ended a paid leave of three years and three months, during which he did no work for the school system. …He is receiving an annual salary of about $120,000, equivalent to what he made as a school administrator.

Though he apparently hasn’t been a model employee since his return.

Jackson has been accumulating many absences over the last two months, missing at least 16 days, including seven without pay, according to a Globe review of payroll records. The tally doesn’t include time he took off in mid-July.

Oh, by the way, Jackson is just one of many bureaucrats who get this strange form of paid vacation.

Boston’s school system currently has 34 employees on paid leave.

I shudder to think what the nationwide number looks like, but apparently there are tens of thousand federal bureaucrats getting paid leave. You can see a couple of strange examples by clicking here and here.

The bottom line is that Mr. Jackson isn’t special. Lots of bureaucrats get to scam the system because union contracts protect dodgy employees. So he doesn’t merit membership in the Bureaucrat Hall of Fame, but it’s still outrageous that taxpayers in the productive sector pay extra tax to subsidize this nonsense.

If you like humor about overpaid government employees (and you’re paying for it, so you may as well get some enjoyment), here’s a great top-10 list from Letterman and here’s a cartoon about the relationship of bureaucrats and taxpayers. Looking through my archives, I also found a joke about an Indian training for a government job, a slide show on how bureaucracies operate, a cartoon strip on bureaucratic incentives, a story on what would happen if Noah tried to build an Ark today, and these two posters. There’s also a good one-liner from Craig Ferguson, along with this political cartoons from  Henry Payne.

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In 2014, I was outraged that more than 80 percent of senior bureaucrats at the Veterans Administration were awarded bonuses, even though this is the bloated bureaucracy that caused the death of many veterans by putting them on secret waiting lists. This, I argued, was a perfect example (in a bad way) of federal bureaucracy in action.

In 2015, I put together a version about bureaucracy in action at the local level, noting that the number of firefighters has climbed by 50 percent since 1980, even though the number of fires has declined by more than 50 percent during the same period.

This year, let’s look at the overseas edition of bureaucracy in action. Our story comes from Italy, where there’s been a government shutdown. Though only in the town of Boscotrecase. And not because of an Obamacare-style budget fight, but rather because a bunch of the local bureaucrats got arrested for routinely skipping work.

The mayor of a small town outside Naples had to shut down most municipal offices after police arrested 23 of his staff in the latest revelations of absenteeism in Italy’s public sector. Staff were filmed clocking in and then leaving to go about their personal business or using multiple swipe cards to register absent colleagues, police said, in scenes that have become familiar after numerous similar scandals. A police video showed one man trying to tamper with a security camera and then putting a cardboard box over his head to hide his identity before swiping two cards. Police arrested around half of all employees in the town hall offices of Boscotrecase following a weeks-long investigation that they said revealed 200 cases of absenteeism involving 30 people. …four major town hall departments had been closed on Tuesday due to a lack of staff. Those arrested, accused of fraud against the state, included the head of the local traffic police and the head of the town’s accounting department. The workers, whose arrest comes amid a government crackdown against absenteeism, have been suspended from work for between six and 12 months and risk eventual dismissal.

What I want to know, of course, is whether the bureaucrats were suspended with pay or without pay.

If it’s the former (which would be my guess), how will their lives be any different? They’ll be goofing off at home while getting overpaid!

No wonder Italy is in a death spiral.

P.S. The Bureaucrat Hall of Fame is comprised of specific government employees who have perfected the art of slacking (such as the Italian doctor who legally worked only 15 days in a nine-year period). That being said, I’m tempted to give adjunct membership to the entire local government of Boscotrecase.

P.P.S. Switching topics, the unpalatable choice between Donald Trump and Hillary Clinton does have a silver lining. It’s generated this clever make-believe announcement from the British Monarch.

To the citizens of the United States of America from Her Sovereign Majesty Queen Elizabeth II:

In light of your failure to nominate competent candidates for President of the USA and thus to govern yourselves, we hereby give notice of the revocation of your independence, effective immediately.

Her Sovereign Majesty Queen Elizabeth II will resume monarchical duties over all states, commonwealths, and territories (except North Dakota, which she does not fancy). Your new Prime Minister, Theresa May, will appoint a Governor for America without the need for further elections. Congress and the Senate will be disbanded. A questionnaire may be circulated next year to determine whether any of you noticed.

To aid in the transition to a British Crown dependency, the following rules are introduced with immediate effect:

———————–
1. The letter ‘U’ will be reinstated in words such as ‘colour,’ ‘favour,’ ‘labour’ and ‘neighbour.’ Likewise, you will learn to spell ‘doughnut’ without skipping half the letters, and the suffix ‘-ize’ will be replaced by the suffix ‘-ise.’ Generally, you will be expected to raise your vocabulary to acceptable levels. (look up ‘vocabulary’).
————————
2. Using the same twenty-seven words interspersed with filler noises such as ”like’ and ‘you know’ is an unacceptable and inefficient form of communication. There is no such thing as U.S. English. We will let Microsoft know on your behalf. The Microsoft spell-checker will be adjusted to take into account the reinstated letter ‘u” and the elimination of ‘-ize.’
——————-
3. July 4th will no longer be celebrated as a holiday.
—————–
4. You will learn to resolve personal issues without using lawyers, psychics or therapists. The fact that you need so many lawyers and therapists shows that you’re not quite ready to be independent. If you can’t sort things out without suing someone or speaking to a therapist, then you’re not ready to be a sovereign nation.
———————-
5. Therefore, you will no longer be allowed to own or carry anything more dangerous than a vegetable peeler. Although a permit will be required if you wish to carry a vegetable peeler in public.
———————-
6. All intersections will be replaced with roundabouts, and you will start driving on the left side with immediate effect. At the same time, you will go metric with immediate effect and without the benefit of conversion tables. Both roundabouts and metrication will help you understand the British sense of humour.
——————–
7. The former USA will adopt UK prices on petrol (which you have been calling gasoline) of roughly $10/US gallon. Get used to it.
————–
8. You will learn to make real chips. Those things you call French fries are not real chips, and those things you insist on calling potato chips are properly called crisps. Real chips are thick cut, fried in animal fat, and dressed not with catsup but with vinegar.
——————-
9. The cold, tasteless stuff you insist on calling beer is not actually beer at all. Henceforth, only proper British Bitter will be referred to as beer, and European brews of known and accepted provenance will be referred to as Lager. South African beer is also acceptable, as they are pound for pound the greatest sporting nation on earth and it can only be due to the beer. They are also part of the British Commonwealth – see what it did for them. American brands will be referred to as Near-Frozen Gnat’s Urine, so that all can be sold without risk of further confusion.
———————
10. Hollywood will be required occasionally to cast English actors as good guys. Hollywood will also be required to cast English actors to play English characters. Watching Andie MacDowell attempt English dialect in Four Weddings and a Funeral was an experience akin to having one’s ears removed with a cheese grater.
———————
11. You will cease playing American football. There is only one kind of proper football; you call it soccer.
Those of you brave enough will, in time, be allowed to play rugby (which has some similarities to American football, but does not involve stopping for a rest every twenty seconds or wearing full kevlar body armour like a bunch of nancies).
———————
12. Further, you will stop playing baseball. It is not reasonable to host an event called the World Series for a game which is not played outside of America. Since only 2.1% of you are aware there is a world beyond your borders, your error is understandable. You will learn cricket, and we will let you face the South Africans first to take the sting out of their deliveries.
——————–
13. You must tell us who killed JFK. It’s been driving us mad.
—————–
14. An inland revenue agent (i.e. tax collector) from Her Majesty’s Government will be with you shortly to ensure the acquisition of all monies due (backdated to 1776).
—————
15. Daily Tea Time begins promptly at 4 p.m. with proper cups, with saucers, and never mugs, with high quality biscuits (cookies) and cakes; plus strawberries (with cream) when in season.

Reasonably clever. Reminds me of the somewhat un-PC humor a British friend sent me on how different countries respond to terrorism.

By the way, I’m not sure the part about needing a permit to carry a vegetable peeler is a joke. After all, we’re talking about the country where you need an ID to buy a teaspoon.

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The Transportation Security Administration has become infamous over the years for things that it doesn’t allow on planes.

Consider these examples of the Keystone Cops in action.

But now the TSA is moving with such tortoise-like inefficiency that even the passengers without plastic hammers and kitty cat keychains aren’t getting on planes.

Our cousins across the Atlantic are amused by the TSA’s incompetence. Here are some blurbs from a story in the UK-based Telegraph.

Circus performers have been brought in to cheer up delayed passengers at San Diego International Airport, where travellers are missing flights because the Transportation Security Administration (TSA) is failing to get people through security quick enough. …San Diego isn’t the only airport gripped by TSA chaos – queues are winding around terminals across the country as the busy summer season begins. Neither is it the only airport to hire entertainment – Cincinnati/Northern Kentucky International Airport has been trying to stabilise the situation with miniature horses. Yes, horses. …The so-called “therapy unicorns” have been supplied by the Seven Oaks Miniature Therapy Horses programme in nearby Ohio. …Other airports have laid on live music and free lollipops to lighten the mood. It will take more than a lollipop to assuage American Airlines, though, which claims 6,800 of its passengers missed their flights in one week due to the delays.

Surely there must be a better response than clowns and unicorns, right?

As you might expect, the answer is less government.

…critics claim the tax-payer funded agency is inefficient and should be replaced by a private company.

Could that really be the solution?

According to a report from the BBC, some major airports are thinking of escaping from the nightmare of TSA incompetence.

The Port Authority of New Jersey and New York and the Atlanta Hartsfield-Jackson airport have both threatened to privatise their passenger screening processes.

And we already have private screeners at more than 20 airports, including major cities such as Kansas City, Orlando, Rochester, and San Francisco.

But there should be a lot more if this 2011 story from MSNBC is any indication.

“The TSA has grown too big and we’re unhappy with the way it’s doing things,” said Larry Dale, president of Orlando Sanford International Airport. “My board is sold on the fact that the free enterprise system works well and that we should go with a private company we can hold directly accountable for security and customer satisfaction.” Dale isn’t alone. Airports in Los Angeles, the Washington, D.C. metro area and Charlotte, N.C., are also considering tossing the TSA. …Rep. John Mica (R-Fla.), …chairman of the House Transportation and Infrastructure Committee, has encouraged the nation’s 200 biggest airports to opt out, calling TSA a “bloated, poorly focused and top-heavy bureaucracy.”…When TSA was created in 2001, the Aviation and Transportation Security Act mandated that the Screening Partner Program (SPP) be adopted to allow screening by private companies under federal oversight.Five airports immediately signed up in 2002 — San Francisco International, Kansas City International, Greater Rochester International, Jackson Hole and Tupelo Regional — and eleven others…have joined since then. …So far, no airport that joined SPP has opted back into the federal screening program.

Airports go with a private company because it means workforce adaptability and flexibility.

Unlike government workers, problem employees working for contract screening companies “can be removed immediately,” noted Mark VanLoh, director of aviation at Kansas City Aviation Department. The private screening company is easier to reach, he added. “Because I am a client, I usually get a return call immediately. We are all in the customer service business, so that’s a nice thing to have.” The bottom line, said McCarron of San Francisco International, is that “we feel our passengers are as safe as at any other airport. And by allowing [the private screening company] to handle the personnel management of the screening process, the TSA staff at SFO can focus its attention on security issues.”

But much more needs to happen to make air travel pleasant and safe.

“The screening partnership program may be a step in the right direction, but ultimately, it doesn’t change the fact that people at the top are idiots. The real problem is that TSA needs to be totally rebuilt,” said aviation consultant Michael Boyd, of Colorado-based Boyd Group International. “Contracting with private screening companies offers staffing flexibility and a few other advantages,” said Robert Poole, director of transportation policy for the Reason Foundation, a free market think tank, “but the system is still very centralized and run too much by TSA.”

In other words, opting into the SPP program is a step in the right direction, but not the ideal solution.

Though even this step is difficult. Experts are concerned that TSA is dragging its feet to prevent more airports from opting for private security. Here’s some of what was written earlier this year.

There’s plenty of evidence that TSA airport screeners are not effective, but worse still, the agency is rigging the system to make sure it is the only option for airport security. …the Screening Partnership Program (SPP) could enhance aviation security while also supporting increased commercial activity, which are both good for the country. …SPP is a program for privatized passenger screening, where airports can “opt out” of TSA screening by contracting with a company to provide passenger and baggage screening commensurate with TSA standards and under the oversight of the federal government.

But TSA permission is needed if airports want private screeners, and that’s a problem.

TSA’s calculus on whether to grant an SPP application is based in part on costs, and the agency does this by comparing proposed costs from contractors against TSA’s estimated costs for the same service. …Private companies are incentivized to determine real costs, as those costs become an operating budget. Propose too little and the company will not make money; propose too much and the company is uncompetitive. Meanwhile, TSA is incentivized to determine costs that outcompete a private company (to protect budget and staff)… by 2011, TSA was rejecting all requests from airports to engage SPP. …TSA is doing an end-run around the free market, leveraging their unique role as competitor and application reviewer to ensure the private sector cannot participate, and the agency then shields itself from oversight.

So the TSA bureaucracy is putting its thumb on the scale to protect its turf.

Is there a silver lining to this dark cloud? Are the TSA bureaucrats at least doing a better job with security, thus perhaps balancing out the inefficiency and high costs?

Nope.

In June 2015, it was revealed that TSA screeners failed 95% of the time during Red Team tests that secreted illicit items through security. …TSA cannot even meet the security standards that private companies must meet under SPP. Arguably, if TSA were a private company bidding for an SPP contract, they would be rejected in terms of costs and effectiveness.

So here’s the bottom line.

SPP yields cheaper and more flexible security operations and, as arguably the biggest benefit to the disgruntled traveling public, if the private sector screeners insult someone, infringe on their rights, or treat them less than fairly (as an endless amount of TSA horror stories reveal), they can be fired, immediately. It is extremely difficult to fire a government employee… TSA is failing in its airport screening mission while also prohibiting competition that could deliver better security and lower costs. It’s time to let private sector screeners take a shot at it.

Yup. In a sensible world, airports all over the nation would be opting out of the TSA and into the SPP.

Let’s close with some depressing analysis from Megan McArdle on what will probably happen instead. Here are some excerpts from her Bloomberg column.

The TSA is blaming inadequate staffing, but government bureaucrats always blame inadequate staffing, since agency headcount is generally a good proxy for “importance of the boss of said agency.” …The TSA has slowed down screening after last summer’s humiliating failure to detect almost any of the contraband in a security audit. …this is the essential logic of bureaucracy. The TSA will suffer terribly if a terrorist slips through with a bomb — or even if the auditors make it through with a fake bomb. On the other hand, what happens to them if there are long lines? Not much. They’ve got to be there for eight hours, so why should they care if we are too? This is why government agencies tend to be much more attuned to remote risks than the real and persistent costs they impose on the rest of us.

Especially when providing poor service will probably produce a bigger budget for the TSA!

…there’s not really any point in having the TSA. Which is a conversation worth having. …But in the history of the world, few indeed are the managers or bureaucrats who have said: “Yup, what we’re doing is useless, you should probably fire me and all my staff.” It’s pretty much inevitable that the TSA, having flunked its audit, is going to choose to impose huge burdens on airline passengers, rather than admit that it’s not actually doing all that much to keep us safe. I’d bet that in the next six months, the TSA will be rewarded for the longer lines by having its budget and headcount increased. …The end result of this cycle: a bigger, more expensive agency that still doesn’t do much to keep us safe.

Isn’t that typical. A bureaucracy getting rewarded for failure.

In a just world, we would take this advice from the Chicago Tribune and shut down the TSA.

But don’t hold your breath waiting for that to happen.

P.S. Check out this amazing picto-graph if you want more information about the failures of the TSA.

P.P.S. For more TSA humor, see this, this, this, this, this, and this.

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I should get an award for equal opportunity.

The Bureaucrat Hall of Fame has plenty of American members, but it also has civil servants from India, France, and Italy, and the United Kingdom, all of whom have gone above and beyond the call of duty in their efforts to rip off taxpayers.

And now we have a new applicant from overseas, so maybe we’ll enjoy even more diversity.

The U.K.-based Times reports on a Spanish bureaucrat that didn’t bother to show up for work for six consecutive years.

A civil servant in Spain didn’t turn up to work for six years. …He had continued to collect his annual salary. Records show that the engineer started working for a water company run by the municipal authorities in Cádiz in 1990 but last did a day’s work in 2004.

Even though this bureaucrat is an amateur compared to the Indian civil servant who skipped work for two decades, I think he’s worthy of membership in the Hall of Fame.

Especially since one aspect of the story perfectly symbolizes the mind-boggling inefficiency of government.

…his absence was noticed only when he was due to collect a long-service award. …Mr Blas said: “We thought the water company had supervised him but it was not the case. We discovered this when we were about to present him with a commemorative plaque for his 20 years of service.”

You may be thinking that this combination of sloth and incompetence at least led to a termination.

Not exactly.

…he cannot be sacked from his €37,000-a-year job as he has since retired.

For what it’s worth, Senor Garcia supposedly is now obliged to return 30,000 euro of his ill-gotten loot.

I’m not holding my breath expecting that to happen.

However, even though it’s not mentioned in the story, I feel very confident that he’ll get a bloated pension courtesy of the Spanish taxpayers.

Why do I think a deadbeat will get a pension?

For the simple reason that Spain – even though it’s in the middle of a deep fiscal crisis – has an above-average burden for bureaucratic compensation.

P.S. Back in 2012, I pointed out that Obama and Romney both were endorsed by different porn stars.

So you probably won’t be surprised to learn that porn stars also are playing a role in the 2016 campaign.

First, the Cruz campaign put together a commercial featuring an actress who is better known for her other roles. The Daily Caller has the details.

Amy Lindsay, the actress featured in films such as Kinky Sex Club, Milf, Carnal Wishes and Sex Sent Me to the ER starred in Sen. Ted Cruz ‘s latest campaign ad entitled “Conservatives Anonymous.” In the ad, the Lindsay said, “Maybe you should vote for more than just a pretty face next time.” Seconds before this story was to be published, the Cruz campaign removed the ad from YouTube.

The Daily Caller also reports that the other conservative senator in the race also has a link to the adult industry.

Jenna Jameson…former porn star recently criticized the $1.1 trillion omnibus federal spending plan, and on Monday, she expressed some serious support for Republican presidential candidate Sen. Marco Rubio.

But she apparently doesn’t like compassionate conservatives.

Jameson told TheDC that she isn’t a fan of Bush.

Though maybe I’m making a mistake by assuming that she’s referring to President Obama’s big-spending predecessor.

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What’s the link between government employees and the Iowa Republican Caucus?

You’re probably thinking there’s little or no connection. After all, bureaucrats presumably would more likely be interested in the choice on the other side between the two peas in the statist pod, right?

That’s true, but bear with me. To understand the link I’m going to make, start by reading Kevin Williamson’s scathing column posted at National Review. Here are my favorite passages.

Veterans Affairs hospitals had, through their negligence and stupidity, killed more of our servicemen than died during any year of the Iraq war, and then engaged in a massive criminal cover-up. Legislation was introduced to make it easier to fire people for — let’s focus here — killing veterans through their negligence and stupidity. But government employees are the single most important Democratic interest group, and the president and his congressional allies complained that the bill was too harsh on public servants who were killing veterans through their negligence and stupidity. And so the bill died in the Senate… In the Treasury Department, the EPA, and the FCC, employees have been found to routinely spend the equivalent of a full workday every week watching pornography on their office computers. Most of those crank-yanking bureaucrats are still on your payroll. At the Commerce Department, paralegals spent their days shopping online and trolling dating sites because they were assigned no work — their supervisors were afraid giving their employees work would “antagonize the labor union.” …The IRS and the AFT are routinely used as political weapons. …Beyond spending on (overwhelmingly Democratic) political campaigns, government workers and their unions also show up to vote, to knock on doors, and to bully, harass, and threaten nonconformists. They are the backbone of the Democratic party — and they are thieving, lazy, grasping, thieving, dishonest, thieving, pervy, thieving, detestable, despicable, thieving, thieving thieves… We are ruled by criminals.

Wow, I thought I sometimes employed a bit of sarcasm when writing about overpaid scroungers in the bureaucracy. Heck, I even created a Bureaucrat Hall of Fame to mock our paper-pushing overseers. But Kevin doesn’t mince words.

At this point, you’re probably wondering what this has to do with the GOP contest in Iowa.

Well, I think “The Donald” had a great opportunity to exploit this issue. He’s the guy who’s famous for “You’re fired” and he could have used that reputation to argue he would clean house in the federal bureaucracy.

Best of all, he wouldn’t even have to try very hard.

According to Government Executive, a non-trivial number of federal workers would retire or quit if Donald Trump is elected.

One in four federal workers would consider leaving their jobs if Trump were elected president, according to a new survey conducted by the Government Business Council, Government Executive Media Group’s research arm. About 14 percent of respondents said they would definitely consider leaving federal service under President Trump, while an additional 11 percent said they might. The findings indicate those leaving government would come from agencies’ top ranks… Among Democrats, 42 percent said they would consider leaving, while 48 percent would not.

Imagine what would have happened if Trump’s people had run commercials with this information, or handed out copies of the article at the Caucus.

Just think of all the taxpayers who might have been convinced that there was finally a candidate who would get rid of some of the over-compensated dead wood in Washington.

Definitely a missed opportunity for The Donald.

By the way, I should take this opportunity to point out that bureaucrats aren’t necessarily bad people. I realize it’s a trite phrase, but some of my best friends work for the government.

Nor are they all leftists.

The article reports that a majority would have been embarrassed with Trump in the White House, but there was also widespread disdain for Hillary. And Rubio actually did better than either Democrat.

…a majority — about six in 10 — would be “embarrassed” to have him as their boss. About half of respondents said the same of Hillary Clinton, compared to 45 percent for Sen. Ted Cruz, R-Texas, and 37 percent for Sen. Bernie Sanders, I-Vt. Just one in five said the same of Sen. Marco Rubio, R-Fla.

I have two additional observations about Iowa.

First, it was great to see that the corrupt and sleazy ethanol industry failed in its all-out effort to defeat Cruz. Hopefully this will be interpreted as a sign that politicians no longer have to kneel at the altar of King Corn.

Second, I find it remarkable that Rubio is now being portrayed as the “establishment” candidate. This is a guy who was part of the Tea Party revolt. A guy who defeated the establishment-endorsed governor to win his Senate seat. A guy who has one of the most pro-market voting records in the Senate. A guy from a state filled with old people who is openly pro-entitlement reform. So if he’s the “establishment,” that’s a major victory.

By the way, the first observation doesn’t mean you should vote for Cruz and the second observation doesn’t mean you should vote for Rubio. I’m simply making two points that should be encouraging for advocates of good policy.

Actually, let me add a third observation. In my prediction yesterday, I guessed Cruz would come in first with 28 percent, and…drum roll, please…he came in first with 28 percent. And I said he would be followed by Trump, Rubio, Carson, Paul, and Bush, all of which was true. And I predicted Hillary would beat Bernie.

Sure, some of my percentages were off, but I’ll take this as a partial victory.

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The Bureaucrat Hall of Fame, created to highlight government workers who go above and beyond the call of duty, is apparently such a prestigious honor that there’s been a strong competition between Americans and foreigners to engage in behavior that merits this great award.

Consider the U.S. bureaucrats who have earned membership so far in 2015.

The civil servant at the Patent and Trademark Office who was paid to shoot pool and drink beer.

The bureaucrat at the National Weather Service who pulled an impressive get-reclassified-as-a-consultant-for-a-lot-more-money scam.

A drone from the Commerce Department managed to combine porn downloading, obstruction of justice, overseas shopping trips, and not showing up to work.

Bureaucrats from overseas also have earned membership this year.

The French official who had a taxpayer provided car and chauffeur, yet still billed taxpayers for $44,000 worth of taxis.

Or the Indian bureaucrat who kept his job for more than 20 years even though he stopped going to work.

As I look at these 2015 honorees, I feel like the system is a bit unfair. Maybe it’s just me, but it appears that the foreign bureaucrats are more deserving than their American counterparts.

And I’m guessing that a senior-level bureaucrat at the Department of Veterans Affairs felt the same way. So he decided to take matters into his own hands.

Literally.

Here are some excerpts from a report in the Daily Caller.

…the Department of Veterans Affairs’ former top watchdog, resigned after being caught masturbating in the agency’s all-glass conference room in full view of people across the street, including school teachers at an education conference. …investigators confronted him with detailed instances of public masturbation in multiple states, according to a previously undisclosed report by the Department of the Interior inspector general and obtained by The Daily Caller News Foundation.

Obviously a very deserving member of the of the Bureaucrat Hall of Fame. And he’s definitely upped the ante on what it take to become a member.

For all intents and purposes, he’s thrown down the gauntlet to foreign bureaucrats: What can they do to…um…beat this?

But let’s set aside the U.S. vs. foreigners aspect of this issue and look more closely at our new honoree.

He apparently had lots of time on his hands (so to speak) because his office decided that it was okay for the Department to operate de facto death panels.

Sort of a trial run for Obamacare!

It was during Wooditch’s tenure as deputy inspector general that the VA IG first uncovered — then all but ignored — dozens of clues of the widespread patient wait-list manipulation that contributed to the deaths of dozens of veterans.

It’s also impressive that he got a promotion shortly after getting caught with porn on his computer.

He was caught with porn on his work computer in 2003, but VA officials only “counseled” him. Not long afterward, he was promoted to the top job.

Not surprisingly, he won’t face any penalties. Indeed, the net result is that he’ll go from being an overpaid bureaucrat to being an over-compensated retiree.

Wooditch retired with a federal pension without ever facing administrative discipline or criminal charges.

Though I don’t want to think what he’ll be doing with all this extra time on his hands.

And here’s a final excerpt.

IG agents also learned during their investigation of a separate incident…they were told, he made an “inappropriate advance” on his next-door neighbor as she was grieving her husband’s death. …“…she said Wooditch began to pose nude and masturbate in front of a window that was only viewable from her house” repeatedly, the report said. The woman…did have police warn him to stop. Wooditch lectured the police that he was a “high-level government employee.”

I think you’ll agree that it nicely captures the arrogance of the federal bureaucracy.

It’s the mindset that leads to these kinds of outrages.

P.S. Shifting to a different topic, I can’t resist an I-told-you-so moment.

There was a disagreement last year among advocates of smaller government about whether Doug Elmendorf, the then-Director of the Congressional Budget Office, should be replaced since Republicans were in full control of Capitol Hill.

I was one of those who argued a new Director was needed. Here’s some of what I wrote.

Elmendorf’s predecessor was a doctrinaire leftist named Peter Orszag. If Orszag’s policy views were a country, they would be France or Greece. By contrast, I’m guessing that Elmendorf would be like Sweden or Germany. In other words, he wants more government than I do, but at least Elmendorf basically understands that there’s no such thing as a free lunch. …That being said, while it’s much better to be Sweden rather than Greece, I obviously would prefer to be Hong Kong (or, even better, pre-1913 America).

The GOP leadership ultimately decided to replace Elmendorf.

It’s too soon to make any sweeping assessment of his successor, though early indications are somewhat positive.

But that’s not the point of this postscript.

Instead, I want to pat myself on the back for being right about Elmendorf. Now that he’s no longer at CBO, he’s come out of the closet and is openly pushing statist policies.

Here’s some of what he wrote earlier this year about “a fairer approach to fiscal reform.”

…the incomes of people across most of the income distribution have risen quite slowly, while incomes at the high end have risen rapidly. …There are a variety of ways to increase tax revenue for Social Security by imposing a payroll tax on income above the current-law taxable maximum. …this approach…does not offer a free lunch. …would reduce people’s incentives to work and save.

So the bottom line is that he recognizes his preferred policy (which is what Obama has endorsed) will hurt the economy, but his ideological support for redistribution and his myopic fixation on income distribution leads him to the wrong conclusion.

And here’s something else. The Hill reports he’s urging class-warfare tax policy.

Former Congressional Budget Office Director Doug Elmendorf on Thursday said the tax code should be changed so that the wealthy pay higher taxes…in a video released Thursday by the left-leaning Bookings Institution, where he is a visiting fellow.

Another example of his support for Obama’s preferred policies.

And another reason why those of us who favored a new person at CBO can take a victory lap.

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Three years ago, I shared a chart about the fiscal burden of the welfare state, calling it the picture that says a thousand word.

It’s astounding, after all, that taxpayers spend so much money on means-tested programs and get such miserable results.

Indeed, if we took all the money spent on various welfare programs and added it up, it would amount to $60,000 for every poor household.

Yet the handouts for poor people generally (but not always) are way below that level, so where does all the money go?

Well, this eye-popping flowchart (click to enlarge) from the House Ways & Means Committee is one way of answering that question. As you can see, there are dozens of programs spread across several agencies and departments.

In other words, a huge chunk of anti-poverty spending gets absorbed by a bloated, jumbled, and overlapping bureaucracy (and this doesn’t even count the various bureaucracies in each state that also administer all these welfare programs).

This is akin to a spider web of dependency. No wonder people get trapped in poverty.

Fortunately, we have a very simple solution to this mess. Just get the federal government out of the business of redistributing income. We already got very good results by reforming one welfare program in the 1990s. So let’s build on that success.

P.S. Leftists generally will oppose good reforms, both because of their ideological belief in redistribution and also because overpaid bureaucrats (who would have to find honest work if we had real change) are a major part of their coalition. But there are some honest statists who admit the current system hurts poor people.

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Since the Bureaucrat Hall of Fame is getting crowded, I’ve decided we need a system to limit new entrants.

So today we’re doing an experiment. We’ll look at two separate stories about lazy and overpaid bureaucrats, and the comments section will determine which one actually is most deserving of joining the Hall of Fame.

Let’s start in Italy, where Alberto Muraglia stakes his claim to membership. Here are some excerpts from a story in the UK-based Times.

Video footage of a policeman clocking in for work in his underpants before allegedly heading back to his bed has become the symbol of an embarrassing absenteeism scandal among council employees in San Remo, on the Italian Riviera. Alberto Muraglia, a pot-bellied, 53-year-old officer, was secretly filmed as he clocked on at council offices. He lives in the same building, a converted hotel, where he occupies a caretaker flat — allowing him to register his presence at work, and then go back to bed, it is alleged.

To be fair, our Italian contestant has an excuse for his truancy.

Though it’s about as plausible as the Groucho Marx quote, “Who are you going to believe, me or your own eyes?”

Mr Muraglia’s wife, Adriana, said the family had an alibi for every instance in which her husband was suspected of clocking in at 5.30am, opening the gates to the council building, and then returning to bed. “Some mornings, if he was a few minutes late pulling on his trousers, he would clock in in that manner and then get fully dressed immediately after and go off to work,” Mrs Muraglia told La Stampanewspaper. “Some mornings he may have forgotten, and he telephoned me to clock in on his behalf.”

In any event, Signor Muraglia is not the only bureaucrat scamming the system.

More than a hundred employees — 75 per cent of the council workforce — are under investigation for allegedly skiving off in the resort town…investigators…filmed employees swiping their time cards, and sometimes those of multiple colleagues, before turning tail and heading off to pursue other interests. One employee, filmed paddling a kayak on the Mediterranean, is alleged to have spent at least 400 hours away from his desk in the planning office, a dereliction of duty estimated to have cost San Remo council more than €5,600.

Though I have to say 400 hours away from his desk is chicken feed compared to the Italian doctor who worked only 15 days in a nine-year period.

And I like how the bureaucrats awarded themselves bonuses for their…um…hard work.

Eight of the suspected skivers shared a €10,000 productivity bonus last year.

Just like the IRS bureaucrats and VA bureaucrats who got bonuses for improper behavior.

I guess there must be an unwritten rule in government: The worse your performance, the higher your compensation.

Now let’s see how Alberto compares to our American contestant. As reported by the Contra Costa Times, former City Manager Joe Tanner is scamming taxpayers for a lavish pension, yet he’s asking for more on the basis of a shady deal he made with the City Council.

By working just two and a half more years, retired Vallejo City Manager Joseph Tanner boosted his starting annual pension from $131,500 to $216,000. He wants more, claiming he’s entitled to yearly retirement pay of $307,000. …he is now taking his six-year dispute to the state Court of Appeal. At issue is whether CalPERS must pay benefits on a contract Tanner and the Vallejo City Council concocted to boost his pension.

An extra $85,000 of pension for the rest of his life just for working 2-1/2 years?

Geesh, and I though the Philadelphia bureaucrat who is getting $50,000 of yearly loot for the rest of her life, after just three years of “work,” had a good deal. She must be feeling very envious of Mr. Tanner.

Yet Mr. Tanner isn’t satisfied.

Here’s the part that seems like it should be amusing, but it’s not actually funny when you realize that government employee pensions are driving states into fiscal chaos.

Ironically, Tanner was a critic of pension excesses. …Yet his personal spiking gambit was breathtaking. The case exemplifies how some top public officials try to manipulate their compensation to grossly inflate their retirement pay. …Tanner’s quest for another $90,000 a year, plus inflation adjustments, for the rest of his life is unreasonable.

Here’s how he schemed to pillage taxpayers.

His first contract with Vallejo called for $216,000 in base salary, plus a list of add-on items that would soon be converted to salary, bringing his compensation to $306,000. But when CalPERS advised that the amount of those add-ons would not count toward his pension, he insisted the contract be fixed. The result: His contract was amended. The add-ons were eliminated and his base salary was simply increased to $306,000, plus management incentive pay and other items that brought the total to about $349,000. If CalPERS used that number, his pension would have started at $307,000 a year. CalPERS says it was an obvious subterfuge. The amended contract was never put before the City Council at any public meeting. And there was never a truthful public explanation for it.

Of course there wasn’t a truthful explanation.

Whether bureaucrats are negotiating with other bureaucrats or whether they’re negotiating with politicians, a main goal is to hide details in order to maximize the amount of money being extracted from taxpayers.

By the way, the example of Mr. Tanner is odious, but it’s not nearly as disgusting as what happened in another California community.

Before inviting readers to vote, I want to make a serious point. Government employee pensions are a fiscal black hole because they are “defined benefits” (DB plans), which means annual payments to retirees are driven by formulas. And those formulas often include clauses that create precisely the perverse incentives exploited by Mr. Tanner.

The right approach is to reform the system so that bureaucrats instead are in a “defined contribution” system (DC plans), which basically operates like IRAs and 401(k)s. A bureaucrat’s retirement income is solely a function of how much is contributed to his or her account and how much it earns over time. By definition, there is no unfunded liability. There’s no fiscal nightmare for future taxpayers.

Now that I have that cry for fiscal prudence out of my system, I invite readers to vote. Does the shirking underwear-clad Italian bureaucrat deserve to join the Hall of Fame, or should that honor be bestowed on the scheming and hypocritical American bureaucrat?

P.S. While I think DC plans are inherently superior (and safer for taxpayers) than DB plans, I will acknowledge that some nations manage to run DB plans honestly.

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I’ve used the “everything you ever wanted to know” hook on many occasions, dealing with diverse issues such as demographics, entitlements, fiscal policy, France, Greece, corporate inversions, supply-side economics, income inequality, the Ryan budget, Social Security reform, comparative economic systems, and healthcare economics.

I even once made the grandiose claim that one of my speeches revealed everything you ever wanted to know about economic policy.

Needless to say, I was exaggerating in every instance. All I’m really doing is sharing things that are very useful in making a broader point about various public policy issues.

And that’s what I’m going to do today by sharing something that will tell you “everything you need to know” about bureaucracy and government.

It’s based on this column, authored by Professor Fred McChesney, about ever-expanding fire departments in the Washington Post.

Let’s start with some unambiguously good news.

…being a firefighter these days doesn’t involve a lot of fighting fire. Rapid improvements in fire safety have caused a dramatic drop in the number of blazes, according to the National Fire Protection Association. Buildings are constructed with fire-resistant materials; clothing and curtains are made of flame-retardant fabrics; and municipal laws mandate sprinkler systems and smoke detectors. The striking results: On highways, 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.

But here’s the part that tells us a lot about government and bureaucracy.

…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.

And that means a lot of time doing nothing. At a very high cost (especially in California).

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. …Firefighters earned a median salary of $45,250 in 2012,according to the U.S. Bureau of Labor Statistics, but overtime can more than double that. In Los Angeles, for example, the average firefighter was paid more than $142,000 in 2013, including overtime and bonuses, the Los Angeles Times reported.

This doesn’t make sense. Why spend so much to achieve so little?

The answer is that politicians are scared of powerful unions (labor bosses, for instance, have targeted – and defeated – tough-on-crime lawmakers for being in favor of criminals simply because of disagreements about fringe benefits).

…firefighter unions have fought hard to grow their ranks as fires decline. …union-negotiated minimum-staffing levels that often mandate four firefighters per engine be on duty at all times, regardless of the cost or workload. …the International Association of Fire Fighters has an annual budget of nearly $60 million, most of it derived from its 278,000 members. IAFF calls itself “one of the most active lobbying organizations in Washington,”… Its political action committee, FIREPAC, spent nearly $6.4 million in 2014.

So what’s the solution?

Professor McChesney suggests that volunteer firefighters are part of the solution.

…cities and towns should consider throwing out the very concept of the career firefighter and return to the tradition of volunteers. …Municipalities that have stuck with the volunteer model got it right — and that is most of them. About 69 percent of all firefighters in the country are volunteers.

To be sure, volunteer firefighters often exist in small communities, but McChesney points out that medium-sized cities also can be very successful (and frugal) by using volunteer fire departments.

Protecting a sizable city with a volunteer force is possible. Since 1930, the city of Pasadena, Tex., has used 200 active and 50 semi-active volunteer firefighters to protect its now more than 150,000 residents. If all towns up to that size moved to all-volunteer forces, the national payroll of career firefighters would be reduced by more than half. Using the median firefighter salary, municipalities would save more than $8.8 billion a year in base pay.

Another option, of course, is to contract with private companies, which is another approach that is very successful.

But no reform will be possible without ending special union privileges.

And to understand why union bosses will fight reform, just keep in mind that they want to protect a system that gives them wages and benefits far above what they would receive in the absence of government coercion.

To cite one example of above-average compensation, here are some excerpts from a report in a California newspaper.

When Peter Nowicki retired in 2009, the then-50-year-old chief of the tiny Moraga Orinda Fire District made national news by trading his $194,000 salary for a starting pension of $241,000 a year.

I suppose taxpayers should count themselves as being lucky since Nowicki’s salary was a mere pittance compared to the $516,000-per-year deputy police chief in San Francisco. Or the $800,000-plus received by a state-employed psychiatrist.

That being said, what enabled this guy to get a pension that was almost $50,000 higher than his salary?

The answer is that he manipulated the system, perhaps in an illegal fashion.

Nowicki, aided by fire district directors, grossly spiked his pension. …The fire board approved two Nowicki contract amendments in that last year, increasing his salary and benefits without proper public transparency, in violation of the state’s open-meeting laws, and retroactively, in apparent violation of the state Constitution… Three days after the second contract amendment, and after 26 years of work, Nowicki announced to his staff that he was retiring because his pension would exceed his paycheck.

Interestingly, he was aware that the system is a scam, and maybe even felt guilty about ravaging taxpayers.

…after 26 years of work, Nowicki announced to his staff that he was retiring because his pension would exceed his paycheck. “I’m very fortunate to be a part of such a lucrative system, yet I philosophically find it to be very troubling at the same time,” he wrote. ” … Nonetheless, I’ve reached the financial plateau and it’s no longer economically feasible to continue in my current capacity.”

But even though he found the system “very troubling,” that didn’t stop him from deliberately screwing over taxpayers.

Then-Director Pete Wilson said that the board deliberately approved the changes to help Nowicki increase his pension and that the chief presented them calculations documenting the effect.

The point isn’t to demonize Mr. Nowicki.

Instead, think about the fact that we have a corrupt system where politicians reward unions with fat contracts and unions reward politicians with campaign cash and election-year support.

As illustrated by this superb cartoon by Michael Ramirez.

That’s a great deal…assuming you’re not a taxpayer.

But for those of us who work, produce, and pay tax, it’s very discouraging that so many bureaucrats have figured out how to become part of the top 1 percent. And it’s doubly discouraging when you consider how excessive pay and benefits are threatening the fiscal viability of state and local governments.

Now let’s get to the bottom line. This issue perfectly captures how government endlessly expands even when the ostensible purpose for a government activity shrinks. And the reason for that endless expansion is that insiders figure out how to rig the system for their advantage.

P.S. To close with some humor, here’s a very snarky video about overpaid firefighters.

And at the bottom of this post, you’ll find an amusing joke about firefighting that pokes fun at libertarians.

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I wrote back in June that I was relieved about a bureaucrat from the National Weather Service getting elected to the Bureaucrat Hall of Fame.

I realize I was being jingoistic, but after selecting bureaucrats from France and India, I had been worried that foreigners were beginning to dominate the award.

But now Americans are on a roll. We have a new honoree, and she hails from one of those bureaucracies that shouldn’t exist – the Commerce Department in Washington.

Here are some remarkable excerpts from a report in the Washington Post.

A high-ranking official at the Commerce Department took at least seven government computers home, an IT smorgasbord from iPads to Dell desktops that she rarely used for work. And if that wasn’t enough, she allowed her kids to download pornography and “racially offensive materials,” an investigation found.

My main reaction is to ask why she was given seven computers. I realize that government bureaucracies waste money and have a callous disregard for taxpayer-provided equipment, but what possible rationale could there be for that many devices?

And my secondary thought is to wonder whether she “allowed” her kids to download inappropriate material or they did it behind her back.

If it’s the latter, then I’m not really sure why it matters. And I’m not even upset that she then tried to erase the info. I can understand why a parent would want to get rid of evidence that their kids were looking at porn.

When investigators started asking questions, they said, she tampered with evidence by erasing the offending material on some of the computers.

Though it’s far less excusable that she tried to penalize lower-level bureaucrats as part of her efforts to hide her misbehavior.

…and in retaliation moved to discipline a woman on her staff who cooperated with the probe.

If the information we’ve looked at was the extent of the matter, this bureaucrat wouldn’t be eligible for the Hall of Fame. However, she also engaged in other behaviors that make her a stellar candidate.

Including lavish trips with taxpayers picking up a big chunk of the cost.

This accumulation of misdeeds described by the Commerce Department watchdog in an investigative report released last week also included a layover in Paris en route to a European conference, partly funded by taxpayers. The official told colleagues her primary reason for going to the conference was to shop, the report said.

And she apparently didn’t think goofing off at her desk was a valuable use of her time, so she played hooky so she could goof off elsewhere.

Investigators said they also found a suspicious pattern of inconsistencies in when the official said she was working and what the swipe records on her security badge showed, including one day when she said she was on the clock for eight hours — but really worked just 20 minutes.

But here’s the clincher, the final piece of evidence that she belongs in the Bureaucrat Hall of Fame.

The statement doesn’t say whether the employee, a GS-15 on the federal pay scale, faces misconduct charges. She now works in another job at Commerce.

Isn’t that wonderful. Based on the GS-15 pay rules, she’s getting paid at least $125,000 per year (and perhaps as much as $158,000) and so far gets to keep her job notwithstanding serial misconduct.

A truly deserving candidate for the Hall of Fame!

P.S. I’ve previously written about America’s very quick and very successful recovery from a deep recession thanks to good fiscal policy in the early 1920s.

Writing for the New York Times, Ronald Radosh and Allis Radosh argue that the President during that time, Warren Harding, is mistreated by history. They start by noting Harding’s low ranking.

From the first poll of historians ranking the presidents, conducted in 1948 by Arthur M. Schlesinger Sr., to the most recent one in 2015, Harding has always come in either at the very bottom of the list, or one above James Buchanan.

They then point out that Harding took office during a grim period.

By the time Harding was inaugurated, in March 1921, the nation was in the doldrums, experiencing a postwar depression. In 1918, four million doughboys came home from the war and many could not find jobs. Unemployment hit African-American soldiers especially hard, and race riots broke out in the Midwest industrial belt. Harding, much like Ronald Reagan in 1980, brought an upbeat message to Americans.

And the part of that upbeat message that gets me juiced is smaller government.

A fiscal conservative, he pledged to right the nation’s finances and resuscitate the economy by lowering taxes, reducing the debt, balancing the budget and making government smaller and more efficient. …By…June 1922, the federal budget had been balanced, revenues exceeded expenditures and the public debt had been reduced. Spending had been $6.3 billion in 1920; by 1922 it had dropped to $3.3 billion.

Harding even had enough principles to reject politically popular spending bills. What a remarkable contrast with a recent Republican who was profligate with other people’s money.

Most telling was Harding’s veto of the popular so-called bonus bill, which would have given veterans an expensive bonus paid over time through deficit spending. The country, he told Congress in a speech, simply did not have the money. He argued it would also set a precedent to use public funds to pay for anything if it was “publicly appealing.”

And there were many other reasons to admire Harding. Unlike his predecessor, the notoriously racist Woodrow Wilson, he supported full equality and protection of the law for all Americans.

Harding immediately stressed his commitment to equal opportunity for all Americans, men and women, “whatever color, blood or creed.” …Harding was a racially enlightened president, especially for the time. During the campaign and his presidency, he supported an anti-lynching bill proposed by Republicans. …In October 1921, Harding traveled to Birmingham, Ala., where, in a powerful speech to a mixed-race (though segregated) audience, he demanded justice for African-Americans. In the first speech in the South by a sitting president on race, he argued for full economic and political rights for all African-Americans.

He also defended the rights of political minorities, again in contrast to Woodrow Wilson’s noxious actions.

Harding also stood out on civil liberties. On his first Christmas in office, Harding commuted the sentence of the Socialist Party leader Eugene V. Debs, who had been imprisoned under the Sedition Act under Wilson… Later, Harding commuted the sentences of the remaining political prisoners still incarcerated.

Pretty impressive.

I know that Reagan and Coolidge are the two best Presidents of the past 100 years, but I’ve never given much thought about who would be in third place. Seems like Harding might be the obvious choice.

Picking the bottom three would be harder because we’ve had so many bad Presidents. Wilson almost surely belongs on that list, but it would be tough to narrow down the list because FDR, Obama, Hoover, Carter, and Nixon would provide strong competition.

P.P.S. Returning to our original topic, here’s my collection of bureaucracy humor. I’ve targeted particular bureaucracies, such as the Postal Service,IRS, TSA, Department of Energy, and National Park Service.

We also have jokes about an Indian training for a government job, a slide show on how bureaucracies operate, a cartoon strip on bureaucratic incentives, a story on what would happen if Noah tried to build an Ark today, and a top-10 list of ways to tell if you work for the government.

There’s also a good one-liner from Craig Ferguson, along with some political cartoons from Michael Ramirez, Henry Payne, and Sean Delonas.

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I created the Bureaucrat Hall of Fame as a way of giving special attention to government employees who go above and beyond the call of duty in their efforts to get paid way too much in exchange for doing far too little.

While my standard practice is to bestow this honor on individual bureaucrats, sometimes I bend the rules and give the award to an entire group, such as the paralegals at the Patent and Trademark Office who were paid – and even given bonuses – even though they were never assigned any work.

Well, not doing work must be part of the culture at that bureaucracy. The Washington Post reports on an employee who apparently was supposed to do some actual work but instead gamed the system.

A federal patent examiner racked up more than 18 weeks of pay last year for work he didn’t do, but his manager didn’t notice until he received an anonymous letter claiming the employee only showed up for his job sporadically and turned in work that was “garbage.” …The examiner, a poor performer for years who was never disciplined, came and went as he pleased… He frequently told colleagues he was leaving work to go to the local golf driving range, play pool or grab a beer — then claimed a full day on the job on his time sheet. On most of the days when the examiner was gaming the system, “there was no evidence” he even went to the office or did any work on his government-issued laptop, investigators found.

My initial reaction to this story is that American bureaucrats need to learn some lessons from their foreign counterparts.

Doing zero work for 18 weeks and still getting paid may sound impressive, but it’s trivial compared to the Indian bureaucrat who managed to get paid up until last year even though he stopped showing up for work back in 1990. Or the lavishly compensated Italian government employee who only worked 15 days over a nine-year period.

But I’m not an Indian or Italian taxpayer. I get irked by when my tax dollars are being squandered.

So why didn’t his supervisor notice that something was amiss?

Well, perhaps that person didn’t notice because he or she was never around.

The examiner’s supervisor works from home more than 30 hours a week.

And even if the supervisor was paying attention, it might not have mattered.

…union rules allowed supervisors limited oversight over their employees.

Though there were plenty of warning signs that should have been noticed.

“Despite numerous red flags and the [patent office’s] internal controls, the agency did not review [the examiner’s] time and attendance records to determine if he was claiming time for work he did not perform,” the 27-page investigation by Acting Inspector General said. The patent office had received numerous complaints from inventors and their attorneys that the examiner was not responsive to their e-mails and phone calls.

If you’re a taxpayer, you’ll be delighted to know that the bureaucrat was making a very comfortable salary.

And even though the scam has been ended, you’ll also be happy to learn that he or she will leave with a clean personnel record.

The employee, a GS-11 making more than $70,000, quit two hours before he was scheduled to meet with the inspector general’s office, the report said. The union representing patent examiners told him that if he resigned, his personnel record would stay clean, not showing that he was under investigation for falsifying hours.

Gee, isn’t that wonderful. Anybody want to guess whether this person winds up working for another government agency?

The final part of the story nicely captures much of what’s wrong with Washington.

An independent review last month by the National Academy of Public Administration…praised the agency’s telework program as a model in the federal government that’s good for morale

Yeah, I bet it’s good for morale. If I got (over)paid and didn’t have to do much work, I might feel happy as well.

Actually, that’s not true. For better or worse, I passionately care about the future of the country and the cause of human liberty. So I’d be doing exactly what I’m doing even if I had to do it as a hobby. I’m just lucky that I get to ply my trade at America’s most effective think tank.

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I’m not a huge fan of government bureaucrats.

But not because they’re bad people. Yes, there are repugnant hacks in the civil service like Lois Lerner, but most bureaucrats I’ve met are good people.

My objection is that they work for departments that shouldn’t exist (such as HUD, Education, Transportation, Agriculture, etc) and/or they are overcompensated relative to workers in the productive sector of the economy.

From an economic perspective, our nation would be more prosperous if this labor was freed up to generate wealth in the private sector.

But let’s not forget that we also have a giant shadow bureaucracy of people (sometimes referred to as “Beltway Bandits”) who get their income from government, but they’re not officially on the payroll because they work for consultants, contractors, grant recipients, and government-sponsored enterprises.

And this may be an even bigger problem. Iain Murray of the Competitive Enterprise Institute estimates that there are “five and a half ‘shadow’ government employees for every civil servant on the federal payroll.”

In an interview for Fox Business Network about the EPA-caused environmental disaster in Colorado, I took the opportunity to warn about the pernicious and self-serving role of these beltway bandits.

And I made similar points in this 2014 interview, which focused on how Washington is now the richest region in the country thanks to all the taxpayer money that’s being scooped up by this gilded class.

If you want a disgusting example of how taxpayers are victimized by consultants, contractors, and other beltway bandits, just recall the Obamacare websites that turned out to be complete disasters.

That led to some amusing cartoons about the failure of government-run healthcare, but it also should have resulted in outrage about the government giving fat payments for shoddy work.

And this highlights one of the chief differences between government and the private sector.

Since there’s no bottom-line pressure to be efficient in government, contractors, consultants, and other beltway bandits can stay in business in spite of poor performance. In the private sector, by contrast, both households and businesses will quickly sever relationships with people who don’t deliver good results.

Let’s cross the ocean and look at a story which nicely captures this dichotomy.

Here’s an excerpt from a column in the U.K.-based Telegraph, and it deals with an employee at a government-sponsored enterprise (GSE) who exposed fraud. In the private sector, such an employee would be rewarded. But at a GSE, which relies on subsidies and protection from competition, such an employee is treated like a leper.

An employee of France’s national rail operator SNCF has revealed being paid €5,000 (£3,550) per month to do absolutely “nothing” for 12 years, it emerged on Friday. …Charles Simon told French media that his employer, which runs France’s trains including the fast TGVs, took him off his day job in 2003 after he blew the whistle on a case of suspected fraud to the tune of €20 million. Since then he has received €5,000 per month net while staying at home with the status “available” for work.

Wow. If my math is right, that’s more than $66,000 per year for doing nothing. For 12 years!

Though at least Monsieur Simon is complaining about the situation, unlike the Indian bureaucrat who managed to get paid up until last year even though he stopped showing up for work back in 1990. Or the Italian government employee who only worked 15 days over a nine-year period.

P.S. Speaking of Beltway Bandits, that’s the name of my 55+ senior softball team and we just won the ISSA World Championship a couple of hours ago, prevailing 16-10 after falling behind 8-0.

And that was one week after we won the SSUSA Eastern National Championship.

And I also have to give a shout out to the Georgia Bulldogs of the Capital Alumni Network, which just won the championship of that 69-team league, becoming the first team in CAN history to be undefeated in the regular season and post-season tournament.

I’m disappointed I couldn’t be there for the celebration because of my other tournament. If I ever become a dictator, my first order will be that different softball tournaments can’t take place on the same weekend (and my second order will be to abolish my job and 90 percent of the rest of the government).

In any event, Go Dawgs! After winning the CAN tourney in 2012, this year’s dominating performance could signal the start of a dynasty.

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Unlike some libertarians, I have patriotic feelings for my country. I want the United States to be the best in everything.

So it’s with some chagrin that I realized that the last two honorees selected for the Bureaucrat Hall of Fame came from overseas.

This included the man from India who earned his spot by not showing up for work – ever – for nearly a quarter of a century.

We also selected the woman from France who had a government-provided car and driver but still managed to bill taxpayers for almost $150 of taxi fares per day.

Given my jingoistic feelings, I’m worried that American bureaucrats are losing ground to their foreign counterparts. It would be a national embarrassment, after all, if our pencil pushers got a reputation for being slackers about slacking off.

So I’m very proud to announce that the newest member of the Bureaucrat Hall of Fame is a red-white-and-blue American.

The Washington Post reports on his truly amazing – and nauseating – scheme to bilk taxpayer to the hilt. Here’s the basic description of what happened.

A senior National Weather Service official helped write the job description and set the salary for his own post-retirement consulting post– then came back to the office doing the same job with a $43,200 raise, the agency’s watchdog found.

Hey, maybe I can do the same thing at Cato. I’ll propose a new position for a Senior Fellow in Recreational Studies. But since I’m modest, I’ll only suggest that this new slot only pay $35,000 more than what I’m now getting. And then I’ll…

Oh, never mind. I momentarily forgot that the Cato Institute isn’t the federal government. Our managers actually care about spending money wisely.

But that’s obviously not the case in Washington, as we can see from these additional excerpts.

The deputy chief financial officer also demanded that he be paid a $50,000 housing allowance near Weather Service headquarters in downtown Silver Spring in violation of government rules for contractors, one of numerous improprieties in a revolving-door deal sealed with full knowledge of senior agency leaders.

Yes, you read correctly. This scheming parasite latched onto the public teat with full knowledge and approval of his superiors.

And in less than two years, he scammed nearly half-a-million dollars from America’s taxpayers.

With his consulting job and housing allowance in place, P. Donald Jiron retired from the Weather Service in early May 2010, then returned to work as a consultant the next day, while collecting his government pension, investigators said. By the time he was fired 21 months later, the government had paid him another $471,875.34.

A taxpayer-provided pension plus a new taxpayer-provided salary. That’s double dipping without even having to get a new desk! Kudos to P. Donald.

You may be thinking – or hoping – that this is an isolated case of waste, fraud, and abuse.

But the Inspector General report reveals this is just the tip of a very sordid iceberg.

His procurement of his own post-retirement job appears to be commonplace throughout the National Oceanic and Atmospheric Administration, the Weather Service’s parent agency.

This story also has a nepotism angle. I guess we can modify the old saying: The family that mooches together, stays together.

Jiron also broke other rules, investigators found. He used his position as a contractor and former senior official to pressure Weather Service staff to give his daughter a job, skirting federal hiring rules that require competition.

Amazingly, he apparently wasn’t successful in his nepotism scheme. Which almost led me to deny him membership.

But the housing allowance he scammed was enough to push him over the top.

So here’s the bottom line. We have government positions that shouldn’t exist. We then pay the people in these positions far more than they could earn in the private sector.

And we have government managers who turn a blind eye (or worse) when these bureaucrats figure out ways to double-dip, triple-dip, and otherwise pillage taxpayers.

Hey, nice work if you can get it.

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When one thinks about all the Obamacare lies, it’s difficult to identify the worst one.

In other words, just about everything we were told was a fib. Even the tiny slivers of good news resulting from Obamacare were based on falsehoods.

So I almost feel like I’m guilty of piling on by writing about another big Obamacare lie.

But Charles Krauthammer has such a strong critique of Obamacare’s mandate for electronic health records that I can’t resist. He starts by pointing out that doctors are unhappy about this costly new mandate.

…there was an undercurrent of deep disappointment, almost demoralization, with what medical practice had become. The complaint was not financial but vocational — an incessant interference with their work, a deep erosion of their autonomy and authority…topped by an electronic health records (EHR) mandate that produces nothing more than “billing and legal documents” — and degraded medicine.

Not just unhappy. Some of them are quitting and most of them are spending less time practicing actual health care.

Virtually every doctor and doctors’ group I speak to cites the same litany, with particular bitterness about the EHR mandate. As another classmate wrote, “The introduction of the electronic medical record into our office has created so much more need for documentation that I can only see about three-quarters of the patients I could before, and has prompted me to seriously consider leaving for the first time.” …think about the extraordinary loss to society — and maybe to you, one day — of driving away 40 years of irreplaceable clinical experience.

Then Krauthammer exposes the deceptions we were fed when Obamacare was being debated.

The newly elected Barack Obama told the nation in 2009 that “it just won’t save billions of dollars” — $77 billion a year, promised the administration — “and thousands of jobs, it will save lives.” He then threw a cool $27 billion at going paperless by 2015. It’s 2015 and what have we achieved? The $27 billion is gone, of course. The $77 billion in savings became a joke. Indeed, reported the Health and Human Services inspector general in 2014, “EHR technology can make it easier to commit fraud,” as in Medicare fraud, the copy-and-paste function allowing the instant filling of vast data fields, facilitating billing inflation.

A boondoggle on the back of taxpayers. Flushing $27 billion is bad enough, but the indirect costs also are large.

That’s just the beginning of the losses. Consider the myriad small practices that, facing ruinous transition costs in equipment, software, training and time, have closed shop, gone bankrupt or been swallowed by some larger entity. …One study in the American Journal of Emergency Medicine found that emergency-room doctors spend 43 percent of their time entering electronic records information, 28 percent with patients. Another study found that family-practice physicians spend on average 48 minutes a day just entering clinical data.

Here’s the bottom line.

EHR is health care’s Solyndra. Many, no doubt, feasted nicely on the $27 billion, but the rest is waste: money squandered, patients neglected, good physicians demoralized.

Not much ambiguity in that sentence. To put it bluntly, “EHR” is the kind of answer you get when you ask a very silly question.

But on a more serious note, now read what Dr. Jeffrey Singer wrote about electronic health records. Simply stated, this is like Solyndra, but much more expensive. Instead of wasting a few hundred million on cronyist handouts to Obama campaign donors, EHR is harming an entire sector of the economy.

The only thing I’ll add is that neither Krauthammer nor Singer contemplated the possible risks of amassing all the information contained in EHRs given the growing problem of hacking and identity theft.

P.S. On another topic, I’ve written several times about the excessive pay and special privileges of bureaucrats in California.

Now, thanks to Reason, we can read with envy about another elitist benefit for that gilded class.

…a little-known California state program designed to protect police and judges from the public disclosure of their home addresses had expanded into a massive database of 1.5 million public employees and their family members… Because of this Confidential Records Program, “Vehicles with protected license plates can run through dozens of intersections controlled by red light cameras and breeze along the 91 toll lanes with impunity,” according to the Orange County Register report. They evade parking citations and even get out of speeding tickets because police officers realize “the drivers are ‘one of their own’ or related to someone who is.”

You may be thinking that the law surely was changed after it was exposed by the media.

And you would be right. But if you thought the law would be changed to cut back on this elitist privilege, you would be wrong.

…the legislature did worse than nothing. It killed a measure to force these plate holders to provide their work addresses for the purpose of citations — and expanded the categories of government workers who qualify for special protections. This session, the legislature has decided to expand that list again, never mind the consequences on local tax revenues, safety and fairness. …Given the overwhelming support from legislators, expect more categories to be added to the Confidential Records Program — and more public employees and their families being free to ignore some laws the rest of us must follow.

This is such a depressing story that I’ll close today with this bit of humor about bureaucracy in the Golden State.

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There’s a Terror Wing in the Moocher Hall of Fame, so I guess it stands to reason that I should create a French Wing of the Bureaucrat Hall of Fame.

After all, few nations can compete with France in the contest to over-tax and over-spend.

And a lot of that spending goes to subsidize a bloated bureaucracy.

Moreover, I suspect many members of that bureaucracy work in jobs that shouldn’t exist and get wildly over-compensated.

Just last month, for instance, I honored one of those bureaucrats with membership in the Hall of Fame because she managed to squander an average of $145 of other people’s money on taxis each and every day (including weekends) even though she also had a taxpayer-provided car and chauffeur!

Wow. And she wasted that much money while working in a position (archivist for the country’s government-run media operation) that never should have been created.

Speaking of which, here are some amusing (only amusing because I’m not a French taxpayer) snippets from a story in the U.K.-based Times about some other ultra-spoiled French bureaucrats.

The 40 members of the Académie Française have…lavish perks… Their remuneration arrangements…include free flats in some of Paris’s most sought-after districts… The report, by the Court of Accounts, is likely to add to widespread resentment of a Parisian elite seen as clinging to its privileges.

The pay levels for these über-bureaucrats are absurd, but the perks are downright astounding.

Many [flats] were made available without justification to the intellectuals who belonged to the academies and their staff, the report said.Hélène Carrère d’Encausse, the historian who is its “permanent secretary”, received €104,768 a year and a free flat in Paris, the report said. The academy justifies her remuneration on the ground that her work is so great that she has to “renounce all literary work”. However, Mrs Carrère d’Encausse has produced nine books, largely on Russia, her specialist subject, since being given the post in 1999. …There is also criticism of Hugues Galls, the opera director who sits on the Academy of Fine Arts and runs one of its properties — the house and gardens where Claude Monet lived. The report said he received a BMW 125i, bought by the academy for €40,461. His garage fees of €1,700 a month are paid by the institution.

Hey, nice “work” if you can get it.

No wonder the OECD is based in Paris. The culture is perfect for elitist leeches.

And it shows that my First Theorem of Government applies in France as well as the United States.

The only silver lining to this dark cloud is that the French elite is slowly waking up to the reality that the government is running out of victims to finance such special-interest perks.

P.S. I rarely get to celebrate good news, so let’s enjoy this moment because the government thugs who stole $107,000 from Lyndon McLellan are being forced to return the money.

Reason has the wonderful details.

…the federal prosecutor assigned to the case was peeved. “Your client needs to resolve this or litigate it,” Assistant U.S. Attorney Steve West wrote in an email message. “But publicity about it doesn’t help. It just ratchets up feelings in the agency. My offer is to return 50% of the money. The offer is good until March 30th COB.” That deadline came and went, but Lyndon McLellan, the convenience store owner who lost $107,000 to the IRS because it considered his bank deposits suspiciously small, refused to fold. That turned out to be a smart move, because West was bluffing. Yesterday the government agreed to drop the case and return all of McLellan’s money.

This is great news, but notice what happened. The Assistant U.S. Attorney initially tried to threaten this innocent man.

But as the case got more publicity, the hack bureaucrat was forced to relent, in much the same way cockroaches scurry into crevices when the kitchen light is turned on.

By the way, if anyone knows Steve West, make sure to let him know that he’s a despicable human being. I bet he’s friends with Robert Murphy and Michael Wolfensohn.

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Bad ideas definitely have the ability to cross borders.

The income tax first appeared in England, on a temporary basis during the Napoleanic wars and then permanently in 1842. It then spread like a cancer to other parts of the world, eventually reaching – and plaguing – the United States starting in 1913.

Government-run Social Security schemes were started by the Germans in 1889 under Chancellor Otto von Bismarck. Similar programs then were adopted elsewhere, including the United States as part of FDR’s misguided New Deal in 1935.

Now we have another example.

I wrote last month about how the State Department’s refugee program is a trainwreck because it is bringing Somalis (many of whom have an anti-Western ideology) to America and trapping them in government dependency with a plethora of handouts (and also creating a breeding ground for terrorists).

Well, our cousins in the United Kingdom also have a refugee program that is similarly counterproductive.

I don’t know which country was dumb enough to first create its program, but the Brits win the prize for subsidizing the most infamous terrorist (and new member of the Moocher Hall of Fame).

Here are some excerpts from a story in the U.K.-based Daily Mail.

Jihadi John and his asylum-seeking family have milked the British benefits system for 20 years, the Mail can reveal today. Housing the Islamic State executioner and his relatives in affluent parts of London has cost taxpayers up to £400,000. One landlord said Mohammed Emwazi’s family were ‘parasites’ and ‘tenants from hell’. Incredibly, they are still believed to be pocketing £40,000 a year in handouts despite there being no sign of them in Britain. …Westminster City Council is still paying the rent on the family’s £600,000 flat even though the rules say housing benefit should normally be stopped after 13 weeks.

So did all these handouts to the Emwazi family turn them into good citizens?

Hardly. One of the kids, Mohammed Emwazi has gone to the Middle East to fight for ISIS and is now infamous at “Jihadi John,” the psychopath that beheads innocent people.

MPs said they were horrified that the child of a family given refugee status, citizenship and benefits had returned the favour by orchestrating the murder of two of its citizens. …In sickening propaganda videos, his son led the beheadings of Britons Alan Henning and David Haines.

But even if Jihadi John hadn’t turned into a nutjob, British taxpayers still got a very bad deal from the Emwazi clan.

The family apparently is still on the dole, continuing an unbroken 20-year tradition of mooching off British taxpayers.

During their time in Britain, neither Jasem nor Ghaneya officially worked. …With a 12-year-old daughter, Hana, they are still believed to be claiming an estimated £7,821 a year in child benefits and child tax credits. That is on top of annual claims of about £23,400 in housing benefit, £678 in council tax support and £5,929 in jobseeker’s allowance.

Looking at this result, logical people might be tempted conclude that it’s time to rethink refugee programs.

Or, at the very least, change the rules that funnel these people into government dependency.

But since many politicians aren’t logical, there are probably British versions of Barack Obama who are urging job training programs or similar nonsense (for a humorous take on that topic, see the cartoons at the bottom of this post).

P.S. Jihadi John featured in one of the most effectively snarky anti-Obama cartoons I’ve ever seen, which is at the end of this post.

P.P.S. Switching to a different topic, I’ve written (some would say ad nauseam) about disproportionately generous pay and benefits for government bureaucrats. Particularly for the gilded class in Washington.

I think the evidence for excessive bureaucratic compensation is ironclad, particularly if you look at “quit rates” by sector.

But now we have yet another piece of evidence that the federal workforce is living on Easy Street. Check out this new polling data from Gallup.

Remember, this is polling data with federal workers describing their own status, not what taxpayers think.

So let’s give 44 percent of bureaucrats credit for honesty, which is ironic because bureaucrats in polls have acknowledged they’re more likely to be dishonest! And lazy as well.

Though the real moral of the story is not compensation. As I explain at the end of this video, the real problem is that many government jobs shouldn’t exist in the first place.

P.P.P.S. If you want to enjoy bureaucrat humor, click here, here, here, here, here, here, here, here, here, and here.

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As a taxpayer, I don’t like the fact that government employees get paid more than folks in the private sector.

But the big difference between bureaucrats and regular workers isn’t so much the pay, it’s the fringe benefits.

And perhaps the  biggest difference of all is that government bureaucrats get far more  lavish retiree benefits.

Sounds like a sweet deal, at least if you get a coveted job (or even six jobs!) with a state or local government.

It’s not a good deal for taxpayers, though, and the entire system is rather unstable because politicians and union bosses have conspired to create huge unfunded liabilities that threaten to create a death spiral for state and local governments.

Simply stated, why should productive taxpayers continue to live, work, and pay taxes in places where a huge chunk of money is diverted to pay off past promises rather than to deliver goods and services (education, parks, trash pickup, police, etc) that have some value?

Indeed, this is a big reason why places such as Detroit already have collapsed. And I fear it is just a matter of time before other local government (as well as some states such as California and Illinois) reach the tipping point.

But perhaps you think I’m being too dour? Yes, I’m prone to pessimism because of my low level of faith in the political elite. In this case, however, any sensible person should be very worried.

Let’s look at what some experts have to say about these issues.

Here are some passages from Steve Malanga’s Wall Street Journal column from earlier this month.

He starts by explaining that Jerry Brown’s big tax hike for education actually has very little to do with helping kids to learn (not that more money is the recipe for better education, as shown by this jaw-dropping chart, but that’s a separate issue).

Instead, the money is being diverted to finance the lavish pension system.

California Gov. Jerry Brown sold a $6 billion tax increase to voters in 2012 by promising that nearly half of the money would go to bolster public schools. …Last June Mr. Brown signed legislation that will require school districts to increase funding for teachers’ pensions from less than $1 billion this year in school year 2014-15, which started in September, to $3.7 billion by 2021, gobbling up much of the new tax money. With the state’s general government pension fund, Calpers, also demanding more money, California taxpayer advocate Joel Fox recently observed that no matter what local politicians tell voters, when you see tax increases, “think pensions.” …When California passed its 2012 tax increases, Gov. Brown and legislators promised voters the new rates would expire in 2018. But school pension costs will keep increasing… Public union leaders and sympathetic legislators are already trying to figure out how to convince voters to extend the 2012 tax increases and approve “who knows what else” in new levies

Sounds grim, but Mr. Malanga warns that “Californians are not alone.”

Decades of rising retirement benefits for workers—some of which politicians awarded to employees without setting aside adequate funding—and the 2008 financial meltdown have left American cities and states with somewhere between $1.5 trillion and $4 trillion in retirement debt. …the tab keeps growing, and now it is forcing taxes higher in many places.

Such as Pennsylvania.

A report last June by the Pennsylvania Association of School Administrators found that nearly every school district in that state anticipated higher pension costs for the new fiscal year, with three-quarters calculating their pension bills would rise by 25% or more. Subsequently, 164 school districts received state permission to raise property taxes above the 2.1% state tax cap. Every one of the districts cited rising pension costs.

And West Virginia.

In West Virginia, where local governments also face big pension debts, the legislature recently expanded the state’s home rule law—which governs how municipalities can raise revenues—to allow cities to impose their own sales taxes. The state’s biggest city, Charleston, with $287 million in unfunded pension liabilities, has already instituted a $6 million-a-year local sales tax devoted solely to pensions, on top of the $10 million the city already contributes annually to its retirement system. At least five more cities applying to raise local sales taxes, including Wheeling, also cited pension costs.

The column also has lots of material on the mess in Illinois.

Here’s just a sampling.

The city of Peoria’s budget illustrates the squeeze. In the early 1990s it spent 18% of the property-tax money it collected on pensions. This year it will devote 57% of its property tax to pension costs. Reluctant to raise the property levy any more, last year the city increased fees and charges to residents by 8%, or $1.2 million, for such items as garbage collection and sewer services. Taxpayers in Chicago saw the first of what promises to be a blizzard of new taxes. The city’s public-safety retirement plans are only about 35% funded, though pension costs already consume nearly half of Chicago’s property-tax collections.

All this sounds depressing, but it’s actually worse than you think.

We also have to look at the promises that have been made to provide health benefits for retired government employees.

Robert Pozen of Brookings has some very sobering data.

Public-pension funds have garnered attention in recent years for being underfunded, but a more precarious situation has received much less notice: health-care obligations for public retirees. …only 11 states have funded more than 10% of retiree health-care liabilities, according to a November 2013 report from the credit-rating agency Standard & Poor’s. For example, New Jersey has almost no assets backing one of the largest retiree health-care liabilities of any state—$63.8 billion. Only eight out of the 30 largest U.S. cities have funded more than 5% of their retiree health-care obligations, according to a study released last March by the Pew Charitable Trust. New York City tops the list with $22,857 of unfunded liabilities per household. …Total U.S. unfunded health-care liabilities exceeded $530 billion in 2009, the Government Accountability Office estimated, but the current number may be closer to $1 trillion, according to a 2014 comprehensive study released by the National Bureau of Economic Research.

By the way, these retired government workers are covered by Medicare, but Pozen explains that the unfunded liabilities exist because so many of them retire before age 65.

And their health plans sometimes cover Medicare premiums once they turn 65.

State and local governments typically pay most of the insurance premiums for employees who retire before they are eligible for Medicare at age 65. That can be a long commitment, as many workers retire as early as 50. Many governments also pay a percentage of Medicare premiums once retired workers turn 65.

But there is some good news.

States are trying to deal with this healthcare-driven fiscal Sword of Damocles.

Since 2010 more than 15 states have passed laws to reduce health-care cost-of-living adjustments—automatic benefit increases linked to the consumer-price index. Courts in eight states upheld these reductions on grounds that cost-of-living adjustments should not be considered a contractual right. Only Washington’s law was struck down in 2011, and the case is now on appeal. Some state and local governments—Nevada and West Virginia, for example—have increased deductibles and scaled back premium subsidies. Others like Ohio and Maine have reduced the health-care benefits provided to retirees. Several years ago Pennsylvania changed early retirement eligibility to 20 years of service from 15.

In many cases, though, I fear these reforms are a case of too little, too late.

So long as the fiscal burden of providing pensions and healthcare expands at a faster rate than the private economy, states and localities will push for more and more taxes to prop up the system.

But people won’t want to live in places where a big chunk of their tax payments are diverted to fringe benefits. So they’ll move out of cities like Detroit and Chicago, and they’ll move out of states like New Jersey and Illinois.

So the bottom line is that politicians and government employee unions engineered a great scam, but one that ultimately in many cases will self destruct.

And the lesson for the rest of us is that government bureaucrats should not get special goodies, particularly when they are financed by nothing other than promises to screw future taxpayers.

Pensions for government workers should be based on the defined-contribution model, and healthcare promises should be more limited and in the form of health savings accounts.

But how do you get these much-needed reforms when the government unions finance the politicians who are on the opposite side of the negotiating table?!?

P.S. Here’s a good joke about government bureaucracy. Here’s a similar joke in picture form. And we find the same humor in this joke, but with a bit more build up. And now that I’ve given it some thought, there’s more bureaucrat humor here, here (image near bottom), and here.

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I’m impressed, in a dark and gloomy way.

I thought the Italian healthcare official who showed up for work only 15 days in a nine-year period set the record for bureaucratic loafing.

Based on longevity of laxity, he definitely out-did the San Francisco paper pusher who didn’t work at all in 2012 yet still got paid $333,000.

And while it’s remarkable that a New Jersey bureaucrat simultaneously got paid for six different jobs, he presumably actually went to work every day.

But all these bureaucrats will probably be ashamed to learn that one of their counterparts in India makes the rest of them seem like workaholics.

Here are some excerpts from a report in England’s Daily Telegraph.

Even in India, where government jobs are considered to be for life, A.K. Verma was pushing it. Verma, an executive engineer at the Central Public Works Department, was fired after last appearing for work in December 1990. …Even after an inquiry found him guilty of “wilful absence from duty” in 1992, it took another 22 years and the intervention of a cabinet minister to remove him, the government said. India’s labour laws, which the World Bank says are the most restrictive anywhere, make it hard to sack staff for any reason other than criminal misconduct.

Needless to say, Mr. Verma deserves election to our Bureaucrat Hall of Fame.

And I suppose there are two broader public policy lessons to this story.

1. If you’ve ever wondered why Indians in America are so successful in America while Indians in India are relatively impoverished, bad policy is to blame, with restrictive labor laws being just one example. Yes, India has implemented some reforms, but if you check the data from Economic Freedom of the World, you can see there’s still a long way to go.

2. There’s nothing wrong with unions if they’re operating in a non-coercive setting. But when the governments tilt the playing field with pro-union legislation, bad results are almost inevitable. And the greatest problem isn’t necessarily above-market wages, but rather inefficient work practices such as an inability to fire bad performers.

P.S. If you like bureaucracy humor, here’s a message from the California public works department.

This Michael Ramirez cartoon shows how taxpayers get squeezed when politicians and bureaucrats negotiate.

We also have this flowchart on bureaucratic operations which was probably developed at DHS or HUD.

And this anecdote shows how congressional budgeting and bureaucracy intersect.

Here’s the famous satirical video on overpaid firefighters in California.

Last but not least, here are two very good posters that capture bureaucrats in action, as well as link to other amusing bureaucrat humor.

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We have some good news to share.

A government has just announced that it is going to end the unfair practice of giving government bureaucrats pension benefits that are far greater than those available for workers in the economy’s productive sector.

Can you guess which jurisdiction took this important step, notwithstanding the greed, political sophistication, and power of government bureaucracies?

Is it the federal government in Washington, which provides bureaucrats with much higher levels of overall compensation than workers in the private sector?

Is it Ireland, which a few years ago actually cut bureaucrat salaries by more than 13 percent?

Is it California, which is infamous for over-compensated bureaucrats?

Is it Denmark, which has the world’s most expensive bureaucracy?

Is it Italy, which has some of the most coddled government bureaucrats in the world?

Is it New Jersey, where it’s possible for a bureaucrat to have six government jobs at the same time?

Is it the Cayman Islands, which actually contemplated the imposition of an income tax to finance its bloated bureaucracy?

Is it Portugal, which overpays bureaucrats more than any other nation?

Those jurisdictions are all be good guesses. Or, to be more accurate, that’s a good list of jurisdictions where reform is desperately needed.

But all those guesses are wrong. The nation that is ending special pension privileges for government bureaucrats is the People’s Republic of China.

Yes, you read correctly. A communist-run nation is implementing this pro-market reform. Here are some of the details from CNTV.

China will reform its public sector pension system to reduce disparity between the public and private sectors, Vice-Premier Ma Kai said Tuesday… Under China’s dual pension system, civil servants and employees in state agencies do not need to pay for their pensions — the government provides full support for them. But employees of private enterprises have to pay 8 percent of their salary to a pension account. After retirement, private urban employees usually get a pension equal to about half of their final salary, but civil servants get much more without making any financial contribution. …now the reform is coming. The aim is to build a system for Party, government and public institution staff that is similar to the one used by the private sector. This move will affect around 37 million people: 7 million civil servants and 30 million public institution staff.

Wow, bureaucrats will have to live under the same rules as folks in the private sector.

What a radical concept! Maybe we could even try it in the United States at some point.

By the way, one additional indirect feature of the story is worth a mention. China actually has the beginnings of a private Social Security system.

Because the system is still developing, I don’t put it on my list of nations with private Social Security (though it is on the Social Security Administration’s list), but the goal is to slowly but surely shift to a funded system.

Assuming that actually happens, China could mitigate the fiscal consequences of a very large demographic crisis caused by that nation’s barbaric one-child policy.

In any event, China’s at least moving in the right direction (see here, here, and here for more information), which is more than can be said for the United States.

P.S. While China has moved in the right direction in recent decades, it still gets a relatively low score from Economic Freedom of the World. Which helps to explain why I think it’s silly for people to fear the supposed Chinese Tiger.

P.P.S. If you want to see far more striking examples of Chinese people being successful, check out Hong Kong and Taiwan.

P.P.P.S. Though at least some Chinese government officials have a very perceptive understanding of the European welfare state.

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I periodically share polling data on issues ranging from which nations most support capitalism to the degree to which government is a leading cause of stress.

Or how about the poll of Americans on the best and worst Presidents since World War II, or the survey data on what share of government spending is wasted.

Today, we’re going to expand on that collection by reviewing some potential good news about attitudes of young people and attitudes about guns. But this isn’t about how young people owning guns, or how they feel about guns.

Instead, we’re going to review two separate pieces of information, one about whether young people want to work for the federal government and another about an online poll about gun control that backfired. And both are somewhat encouraging, albeit not very scientific.

With regards to young people, I was very pleased to read a story in the Washington Post indicating that President Obama is failing in his attempt to make government jobs “cool again.”

Six years after candidate Barack Obama vowed to make working for government “cool again,” federal hiring of young people is instead tailing off and many millennials are heading for the door. The share of the federal workforce under the age of 30 dropped to 7 percent this year, the lowest figure in nearly a decade, government figures show. …top government officials, including at the White House, are growing increasingly distressed about the dwindling role played by young workers.

Let’s hope this is true. The last thing we want is talented young people diverted from productive employment into the suffocating embrace of government bureaucracy.

But the key issue from my perspective is why young people prefer the private sector.

If it’s because they want to do something meaningful, or because they recognize government bureaucracy is a black hole of inefficiency, or because they don’t want to be a burden on taxpayers, I would view any of those explanations as a positive sign. Perhaps even an indication of growing social capital.

But there’s a less-optimistic explanation. Maybe young people actually do want overpaid positions as regulators, paper pushers, and memo writers, but haven’t had much luck simply because the process is so inefficient and/or the money isn’t there because of the spending restraint in recent years.

Danzig said that the federal shutdown, furloughs and pay freezes in recent years have eroded the attraction of working for the government. …For those millennials who still want to land a government job, the hiring process can be an infuriating mystery. And the government’s Pathways internship program, designed to help launch young people on a federal career, is so beset by problems that only a trickle of workers has been hired. …then Congress imposed the automatic budget cuts called “sequestration.” …Budget cuts have forced agencies to slow the hiring pipeline in the past two years, and with job prospects in the private sector improving after the long economic slowdown, millennials are increasingly taking jobs outside government, where they can see a better chance of advancement.

The most encouraging part of the story is that some young people who did land government jobs have decided to jump ship and go into the private sector.

That’s a win-win for taxpayers and the economy.

These millennials no longer are a burden on people in the productive sector of the economy and they’re also presumably now doing things that are far more likely to add value to society.

Sort of like when a welfare recipient is rescued from government dependency and becomes self-sufficient.

But you won’t be surprised to learn the Obama Administration isn’t giving up.

The agency’s director, Katherine Archuleta, has been visiting college campuses to urge students to consider federal careers. …“We know hiring millennials is really critical to the future of the government,” she said. …Meanwhile, the Obama administration has been working to revamp the Pathways federal internship program for college students and recent graduates.

None of this is a surprise. The White House presumably understands that a bigger government workforce means more voters who are likely to support candidates that want to expand the size and scope of government.

Our second example comes from the scroungers at PBS. The government-subsidized broadcasters did a story on gun control and included an online poll.

There was nothing remarkable about the story, just the usual pro-gun control agitprop, but the polling results must have been a big disappointment to the PBS crowd.

Wow, 95 percent-4 percent in favor of the Second Amendment.

To be sure, online surveys are completely unscientific and I’m sure some pro-gun rights people must have actively encouraged votes.

Nonetheless, I still find the results amusing if for no other reason than they undermined the narrative that PBS doubtlessly was hoping to create.

P.S. Based on this actual polling data, many millennials are quite confused and inconsistent in their views about public policy, so they probably are very well suited for careers in government. Which is all the more reason to push them in the private sector where a bit of real-world experience would probably help them think more clearly.

P.P.S. Since the title of today’s column was about young people and guns, I can’t resist sharing this feel-good story from Georgia.

A local gun club gave young people an opportunity to pose with Santa Claus and some of their favorite weapons.

Reminds me of the time I took my kids into the woods of Vermont so they could shoot an AK-47.

There was snow on the ground, but Santa Claus was absent, so I can’t say I matched the experience the gun club provided.

However, as you can see by clicking here, I raised my kids with good values about the Second Amendment.

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I’ve shared humor targeting particular bureaucracies, such as the Postal Service, IRS, TSA, Department of Energy, and National Park Service, but I don’t have nearly enough material mocking government bureaucrats in general.

I should have dozens of examples. However, looking through my archives, I found just a handful of examples: a joke about an Indian training for a government job, a slide show on how bureaucracies operate, a cartoon strip on bureaucratic incentives, a story on what would happen if Noah tried to build an Ark today, and a top-10 list of ways to tell if you work for the government.

I also found a good one-liner from Craig Ferguson, along with some political cartoons from Michael Ramirez, Henry Payne, and Sean Delonas.

Those are all funny, but it’s not nearly enough. So let’s add to the list.

Here’s some insight on what it’s like to get overpaid and underworked.

By the way, if this image looks familiar, it may be because it has the same look as this six-frame image about libertarians.

And if I haven’t exhausted your interest in anti-bureaucrat humor, here’s a related image.

And last but not least, here’s a new element discovered inside the bureaucracy, and a letter to the bureaucracy from someone renewing a passport.

Let’s close with one serious point.

We should probably be happy that many bureaucrats are lazy. Sure, it’s an inconvenience when you’re waiting in line at the Postal Service or DMV, or when you’re on hold trying to get a straight answer from some random bureaucracy.

But do you really want zealous and motivated people at the EPA, OSHA, EEOC, FDA, and IRS?

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In April of 2013, I introduced a Moocher Hall of Fame to “celebrate” some very odious examples of welfare dependency.

Since that time, I keep thinking that it’s time to do something similar for government bureaucrats. This compilation from last December would be a good place to start, though I’d have to figure out whether to have group memberships so that we could include the bureaucrats at the Patent and Trademark Office who get paid to watch TV, as well as the paper pushers at the Department of Veterans Affairs who got big bonuses after creating secret waiting lists that led to the death of former soldiers.

But if we’re creating a Bureaucrat Hall of Fame, I won’t want to discriminate against foreigners.

The U.K.-based Telegraph reports, for instance, that an unnamed doctor from Italy is a very worthy candidate for this award.

The notorious inefficiencies of Italy’s state sector were laid bare on Thursday as news emerged of a Sicilian doctor who has done just 15 days’ work in the past nine years.

How has he “achieved” this degree of non-work?

…the doctor disappeared off on a university training course, reportedly paid for by taxpayers’ money, when he started work in 2005. Returning to work on October 31, 2008, the doctor immediately asked for, and obtained, paid family leave until May the following year. Then he worked 15 days at the hospital before calling off sick until July 2009. Recovered from illness, the doctor obtained a place on another university training course, once again reportedly swapping his wage for payment from the state university, which lasted until June this year, said wire agency ANSA. The doctor is now allegedly planning more time off to obtain a doctorate which will finish in December 2016.

By the way, our lazy doctor has lots of company. Indeed, Sicily sounds like the California of Italy.

The problem is pronounced in Sicily, where an army of around 144,000 regional staff – both permanent and temporary – includes 26,000 forestry workers, more than in British Columbia in Canada. Around 7,000 Sicilians have been given government jobs teaching work skills to Sicilians without jobs.

With that amount of waste and featherbedding, no wonder Italian taxpayers are beginning to revolt.

Here’s a specific example that boggles the mind.

Red tape on the island has also created surreal working weeks for those employed by the local government. In March, a vet in Trapani complained that the work he was contracted to carry out for the local authority had been spread over a such a long period he was required to do just one minute’s work every week. “Once a week I go to the office and stamp my pass,” said Manuel Bongiorno. “I walk in, wait for a minute to go by, then stamp the pass again. It’s been going on for months,” he added.

I don’t know if “vet” means he’s an animal doctor or a former soldier, but he doesn’t qualify for membership in the Bureaucrat Hall of Fame because he apparently wants to do some work.

That’s preposterous, but what would you expect in a nation where government is so incompetent that the wrong people are appointed to high-level jobs that shouldn’t even exist.

So you can see why I don’t really care which party rules Italy. The names may change at the top, but government always comes out ahead.

Though a New York Times columnist actually wrote that America should become more like Italy. And he wasn’t being satirical. At least not on purpose.

P.S. The U.K. government has raised its terror threat level from “substantial” to “severe.” I realize this is a serious issue, but I couldn’t help but think about the humorous version of European threat levels.

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