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Center for Freedom and Prosperity video outlines five specific reason why the IRS regulation is bad news and should be withdrawn.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