An Amusing Look at Whether Obama Is Backing Away from Gun Control

Maybe Obama’s not so bad on Second Amendment issues.

His Administration has contracted with the folks at Ruger to produce a special pistol in honor of the government workforce.

This new gun will be called “The Bureaucracy Special.” The only downside is that it doesn’t work and you can’t fire it.

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This Must Be Part of Obama’s Drive for Government Efficiency

The Department of Housing and Urban Development is trying hard to win the “Bureaucracy of the Year Award,” and they have a new motto.

But I think the bureaucrats at HUD are cheating. I’m almost sure I saw one of these signs during my last visit to the DMV, though I confess I started hallucinating after three hours.

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Reckless IRS Regulation Would Put Foreign Tax Law over American Tax Law and Drive Investment out of the United States

I’m not a big fan of the IRS, but usually I blame politicians for America’s corrupt, unfair, and punitive tax system. Sometimes, though, the tax bureaucrats run amok and earn their reputation as America’s most despised bureaucracy.

Here’s an example. Earlier this year, the Internal Revenue Service proposed a regulation that would force American banks to become deputy tax collectors for foreign governments. Specifically, they would be required to report any interest they pay to accounts held by nonresident aliens (a term used for foreigners who live abroad).

The IRS issued this proposal, even though Congress repeatedly has voted not to tax this income because of an understandable desire to attract job-creating capital to the U.S. economy. In other words, the IRS is acting like a rogue bureaucracy, seeking to overturn laws enacted through the democratic process.

But that’s just the tip of the iceberg. The IRS’s interest-reporting regulation also threatens the stability of the American banking system, makes America less attractive for foreign investors, and weakens the human rights of people who live under corrupt and tyrannical governments.

This Center for Freedom and Prosperity video outlines five specific reason why the IRS regulation is bad news and should be withdrawn.

I’m not sure what upsets me most. As a believer in honest and lawful government, it is outrageous that the IRS is abusing the regulatory process to pursue an ideological agenda that is contrary to 90 years of congressional law. But I guess we shouldn’t be surprised to see this kind of policy from the IRS with Obama in the White House. After all, this Administration already is using the EPA in a dubious scheme to impose costly global warming rules even though Congress decided not to approve Obama’s misguided legislation.

As an economist, however, I worry about the impact on the U.S. banking sector and the risks for the overall economy. Foreigners invest lots of money in the American economy, more than $10 trillion according to Commerce Department data. This money boosts our financial markets and creates untold numbers of jobs. We don’t know how much of the capital will leave if the regulation is implemented, but even the loss of a couple of hundred billion dollars would be bad news considering the weak recovery and shaky financial sector.

As a decent human being, I’m also angry that Obama’s IRS is undermining the human rights of foreigners who use the American financial system as a safe haven. Countless people protect their assets in America because of corruption, expropriation, instability, persecution, discrimination, and crime in their home countries. The only silver lining is that these people will simply move their money to safer jurisdictions, such as Panama, the Cayman Islands, Hong Kong, or Switzerland, if the regulation is implemented. That’s great news for them, but bad news for the U.S. economy.

In pushing this regulation, the IRS even disregarded rule-making procedures adopted during the Clinton Administration. But all this is explained in the video, so let’s close this post with a link to a somewhat naughty – but very appropriate – joke about the IRS.

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Government Employee Pensions Are a Budget Issue, but Also a Growth and Fairness Issue

Eli Lehrer of the Heartland Institute has an article in the Weekly Standard claiming that underfunded pension plans are not the problem with state budgets. This paragraph is a good summary of his article.

In the end, many states facing very large current budget gaps—New York, Florida, Texas, and Wisconsin among them—have pension systems that are likely capable of paying their obligations indefinitely with only minimal tweaks. Even in California, where absurdly generous public employee pensions have attracted enormous media attention, both of the major pension funds have shortages of around 10 percent that the state could cover pretty easily with some combination of economic growth, tax hikes, and service cuts, if its other fiscal problems were not so severe.

I’m a fan of some of Eli’s work, particularly his efforts to bar discriminatory taxes on foreign reinsurance companies (here’s my similar take on the issue). On the other hand, I’m distressed that Eli recently endorsed higher taxes.

Writing for National Review, Veronique de Rugy of Mercatus took issue with Eli’s article. Eli responded here, which then led to comments from Yuval Levin and Nicole Gelinas.

I think Veronique wins the debate. Eli’s case is only plausible if you accept his very narrow definition that “the problem” is short-term state budget deficits.

But I think the discussion is too narrow for two reasons (though both reasons are connected to the fact that government workers are overpaid relatively to people in the productive sector of the economy).

1. The generous pay and benefits for government workers diverts labor from more productive uses. The undermines growth.

2. The generous pay and benefits for government workers is unfair to the (generally less well off) private sector workers who foot the bill.

In other words, even if Eli was right (and I don’t think he is), there are powerful arguments for scaling back the overall compensation of government employees.

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Top ten ways to tell if you might be a member of a public-sector union

A buddy from Monaco was at a different conference in the same hotel in Switzerland, and he sent me this great humor from David Letterman.

Here are the top 10 ways to tell if you are a bureaucrat.

10.) You take a week off to protest in Wisconsin and your office runs better.

9.) On a snow day, when they say “non-essential” people should stay home you know who they mean.

8.) You get paid twice as much as a private sector person doing the same job but make up the difference by doing half as much work.

7.) It takes longer to fire you than the average killer spends on death row.

6.) The worse you do your job, the more your boss avoids you.

5.) You think the French are working themselves to death.

4.) You know by having a copy of the Holy Koran on your desk your job is 100% safe.

3.) You spend more time at protest marches than at church.

2.) You have a Democratic congressman’s lips permanently attached to your butt.

1.) You pay more in union dues than you do for your healthcare insurance.

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Victory in Wisconsin?!?

Kudos to Governor Walker of Wisconsin. Republicans rarely have the intelligence or the fortitude to win battles that reduce the burden of government, but it appears that he is on the verge of prevailing in his effort to limit special privileges for government workers. Fugitive Democrats from the State Senate apparently are giving up on their plan to block the Governor’s reforms by hiding in Illinois.

I won’t fully believe it until they’re back in their chairs and casting votes, but at the very least Governor Walker is showing why it is important to stand up to greedy special interests. Let’s hope Republicans in Washington can display the same courage in their fight to trim a tiny amount of spending from this year’s spending – even if it means a government shutdown.

Here’s a report on the Wisconsin fight from today’s Wall Street Journal.

Playing a game of political chicken, Democratic senators who fled Wisconsin to stymie restrictions on public-employee unions said Sunday they planned to come back from exile soon, betting that even though their return will allow the bill to pass, the curbs are so unpopular they’ll taint the state’s Republican governor and legislators.

…The Wisconsin standoff, which drew thousands of demonstrators to occupy the capitol in Madison for days at a time, has come to highlight efforts in other states to address budget problems in part by limiting the powers and benefits accorded public-sector unions.

Sen. Mark Miller said he and his fellow Democrats intend to let the full Senate vote on Gov. Scott Walker’s “budget-repair” bill, which includes the proposed limits on public unions’ collective-bargaining rights. The bill, which had been blocked because the missing Democrats were needed for the Senate to have enough members present to vote on it, is expected to pass the Republican-controlled chamber.

He said he thinks recent polls showing voter discontent with Mr. Walker over limits on bargaining rights have been “disastrous” for the governor and Republicans and give Democrats more leverage to seek changes in a broader two-year budget bill Mr. Walker proposed Tuesday.

…Mr. Walker’s bill would prohibit bargaining over health care and pensions for about 170,000 public employees in the state and would allow public employees to opt out of paying dues or belonging to a union.

The bill also would end the automatic collection of dues by the state, and require that every public-employee union get recertified to represent workers through an annual election.

…Mark Jefferson, head of the Wisconsin GOP, said…even after Mr. Walker’s plan is passed, the state’s public workers will still have more collective-bargaining rights than most federal workers, who can bargain over working conditions but not pay and benefits.

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The TSA’s Keystone Cops Strike Again

My New Year’s Resolution was to stop making fun of the Transportation Security Administration. Not because I changed my mind about the bureaucracy and its level of (in)competence, but rather because I felt as if I was taking candy from a baby. Kicking the TSA is just too easy.

But I can’t resist low-hanging fruit. I recently mocked the TSA for repeatedly failing to catch an undercover agent who carried a gun through the porno-scan machines.

Now it’s time to abuse the bureaucrats for another world-class blunder. A man recently got on a flight with three of the weapons that were used to hijack planes on 9-11. According to the New York Post.

A passenger managed to waltz past JFK’s ramped-up security gantlet with three boxcutters in his carry-on luggage — easily boarding an international flight while carrying the weapon of choice of the 9/11 hijackers, sources told The Post yesterday. The stunning breach grounded the flight for three hours Saturday night and drew fury from Port Authority cops, who accused the Transportation Security Administration of being asleep on the job. “In case anyone has forgotten, the TSA was created because of a couple boxcutter incidents,” said one PAPD source, referring to the weapons used by al Qaeda operatives to commandeer the jets they later slammed into the World Trade Center and the Pentagon on 9/11.

In an unusual display of honesty, a TSA bureaucrat basically admitted that passengers were not in danger because of other factors. Which raises an obvious question of why we maintain an expensive bureaucracy that has no impact other than to inconvenience the traveling public?

The TSA spokeswoman Davis insisted that the traveling public was not at risk. “There have been a number of additional security layers that have been implemented on aircraft that would prevent someone from causing harm with boxcutters,” she insisted. “They include the possible presence of armed federal air marshals, hardened cockpit doors, flight crews trained in self-defense and a more vigilant traveling public who have demonstrated a willingness to intervene.”

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One Chart that Tells You Everything You Need to Know about Whether State and Local Bureaucrats Are Over-Compensated

The showdown in Wisconsin has generated competing claims about whether state and local government bureaucrats are paid too much or paid too little compared to their private sector counterparts.

The data on total compensation clearly show a big advantage for state and local bureaucrats, largely because of lavish benefits (which is the problem that  Governor Walker in Wisconsin is trying to fix). But the government unions argue that any advantage they receive disappears after the data is adjusted for factors such as education.

This is a fair point, so we need to find some objective measure that neutralizes all the possible differences. Fortunately, the Bureau of Labor Statistics has a Job Openings and Labor Turnover Survey, and this “JOLTS” data includes a measure of how often workers voluntarily leave job, and we can examine this data for different parts of the workforce.

Every labor economist, right or left, will agree that higher “quit rates” are much more likely in sectors that are underpaid and lower levels are much more likely in sectors where compensation is generous.

Not surprisingly, this data shows state and local bureaucrats are living on Easy Street. As the chart illustrates, private sector workers are more than three times as likely to quit their jobs.

This helps explain why the unions are treating the Wisconsin debate as if it was Custer’s Last Stand. The bureaucrats know they have comfortable sinecures and they are fighting to preserve their unfair privileges.

The only bit of semi-good news for Wisconsin taxpayers is that state and local bureaucrats are not as lavishly over-compensated as federal bureaucrats.

This Center for Freedom and Prosperity video looks at all of the data and reveals a pecking order. Federal bureaucrats are at the kings and queens of compensation. State and local bureaucrats are like the nobility. And private sector taxpayers are the serfs that worker harder and earn less, but nonetheless finance the entire racket.

The video closes with a very important point that the right pay level for many bureaucrats is zero. This is because they work for programs, departments, and agencies that should not exist.

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Astounding TSA Incompetence

This is really remarkable. We’re supposed to go through porno strip machines at the airport so the bureaucrats can detect firearms. Yet the Keystone Cops at the TSA in Dallas failed when an undercover agent tested their awareness by hiding a gun in her undergarments. They didn’t just fail. They. Failed. Every. Single. Time.

Check out this local news report, including a video at the link.

An undercover TSA agent was able to get through security at Dallas/Fort Worth International Airport with a handgun during testing of the enhanced-imaging body scanners, according to a high-ranking, inside source at the Transportation Security Administration. The source said the undercover agent carried a pistol in her undergarments when she put the body scanners to the test. The officer successfully made it through the airport’s body scanners every time she tried, the source said. “In this case, where they had a test, and it was just a dismal failure as I’m told,” said Larry Wansley, former head of security at American Airlines. “As I’ve heard (it), you got a problem, especially with a fire arm.”

This story worries me. But not because a terrorist might smuggle a gun on board. Passengers are now the most effective line of defense against hijacking, along with hardened cockpit doors and armed pilots.

But I am worried that the TSA might over-react, demand more intensive scrutiny, and cause airport security lines to become even slower.

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As Wisconsin Goes, so Goes the Nation

After dozens of posts about overpaid government employees, I’m sick of writing about the topic. But what’s happening in Wisconsin is critically important in the fight for long-run fiscal sanity, so I’m reluctantly wading back into this fight. Simply stated, bureaucrats have figured out how to manipulate the system and they are bankrupting state and local governments.

Chris Christie is the first governor in a long time to stand up to these thugs and now the new chief executive of Wisconsin, Scott Walker, has joined the fight. But unlike Christie, who must deal with a hostile state legislature, Governor Walker has a GOP-controlled Assembly and Senate. As such, he has a chance to take much bigger steps in the right direction.

The unions realize that their special privileges may disappear and they are engaged in a vicious fight to block reform. Other groups that get money and/or political support from the unions also are joining the battle against Wisconsin’s taxpayers. John Fund of the Wall Street Journal provides the key details.

Mr. Walker’s proposals are hardly revolutionary. Facing a $137 million budget deficit, he has decided to try to avoid laying off 5,500 state workers by proposing that they contribute 5.8% of their income towards their pensions and 12.6% towards health insurance. That’s roughly the national average for public pension payments, and it is less than half the national average of what government workers contribute to health care. Mr. Walker also wants to limit the power of public-employee unions to negotiate contracts and work rules—something that 24 states already limit or ban.

…Democratic reactions to these proposals have been over the top. In addition to the thousands of protesters who descended on the Capitol building on Thursday to intimidate legislators, so many teachers called in sick on Friday that school districts in Milwaukee, Madison and Janesville had to close.

…Why are national liberal groups treating Wisconsin as if it were their last stand? Partly for reasons of symbolism. Historically, Wisconsin “embraced the organized labor movement more heartily than any other [state],” notes liberal activist Abe Sauer.

…Labor historian Fred Siegel offers further reasons why unions are manning the barricades. Mr. Walker would require that public-employee unions be recertified annually by a majority vote of all their members, not merely by a majority of those that choose to cast ballots. In addition, he would end the government’s practice of automatically deducting union dues from employee paychecks. For Wisconsin teachers, union dues total between $700 and $1,000 a year. “Ending dues deductions breaks the political cycle in which government collects dues, gives them to the unions, who then use the dues to back their favorite candidates and also lobby for bigger government and more pay and benefits,” Mr. Siegel told me.

Just in case you’re wondering why unions are being so intransigent, Instpundit has a link to a website explaining that state bureaucrats get twice as much compensation as the tax-paying serfs in Wisconsin’s private sector. I can’t vouch for the specific numbers, but I’m sure the gap in the state is enormous, as is the case all across the nation. This video explains.

Let me close with a caveat. There surely are thousands of Wisconsin government employees who disagree with the thuggish tactics and absurd demands of the union bosses. My criticisms obviously don’t apply to those folks, but I would ask them to stand up and be counted. Write op-eds and letters-to-the-editor. Attend today’s Tea Party rally. The union bosses are using your money to do bad things, but you can use your time to do the right thing.

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