We know that must be the case because of the things that the Department of Labor spends money on for the purpose of “improving” the morale of its employees. Kyle Smith asks some questions about some of DoL’s more curious expenditures:
An Aug. 25 letter from House Oversight Committee Chairman Darrell Issa (R-Calif.) to Labor Department Secretary Thomas E. Perez contains some pertinent questions about “a pattern of wasteful spending and mismanagement.” We’d all like some answers.
Why, for instance, is the DOL entering itself in public relations contests, often winning them, and then flying top brass to posh locales to pick up the awards at lavish ceremonies? At one such party, the PRSA Silver Anvil Awards in Manhattan, tickets were sold for $375 a pop. Taxpayers, according to Chairman Issa, apparently picked up the tab for a DOL flack to attend. Is the DOL working for the American laborer, or spending our money to polish its own image?
And how, Issa would like to know, did DOL manage to spend $2,637 a week producing posters to be placed in the elevators in the agency’s headquarters building? DOL has blown some $600,000 on these posters, which are evidently aimed at celebrating the agency’s work to its own employees. Of whom there are nearly 18,000. Maybe, the next time Washington is wailing about the impossibility of reducing spending on anything, someone should mention the DOL’s poster squad.
Issa might also ask, while he’s at it, why the agency is prompting employees to waste their time participating in a poetry contest, or logging on to a website to vote for “favorite saint” status for the New Deal Labor Secretary Frances Perkins, for whom the department’s headquarters building is named. (Perkins did indeed win a whimsical online poll, Lent Madness, which department spokesman Carl Fillichio trumpeted as “our small salvation” during the sequestration “crisis”. Fillichio, by the way, is also the official who traveled to New York, apparently on our dime, to accept that Silver Anvil award that acknowledged his skill at relating to the public.)
In the private sector, these kinds of expenditures are the kind of things that ethically troubled executives do to try to improve the morale of their employees as they attempt to distract attention from more troubling matters.
Consider the case of Boeing’s former CEO Phil Condit, who was compelled to abruptly resign in disgrace in 2003 ahead of news breaking of a major defense contracting scandal at the company. Condit’s tenure at the top of the aerospace giant frequently involved poetry recitals by company executives at lavish private parties/training sessions at his estate for the express purpose of improving their morale as the company sought to significantly boost its production without boosting either the pay or the numbers of its labor force:
Of course, none of this can happen without good relations with the workforce. And Condit has introduced a surprisingly touchy-feely approach to this issue. To break down barriers among senior managers, he has enlisted the help of David J. Whyte, a Seattle-based poet and philosopher who has also worked with AT&T, Honeywell, and Eastman Kodak. During a series of weeklong meetings in 1994 and 1995, senior managers capped their sessions with a trip to Condit’s house for dinner, then gathered outside around a giant fire pit to tell stories about Boeing. Whyte says he and Condit asked them to write down negative stories and toss them into the flames to banish the “dark” side of Boeing’s past. “Phil believes that the stories you tell are the legacy you will leave behind,” says Whyte. Condit also asked managers to keep inspiring stories.
That’s really not that much different from what’s going on at the U.S. Department of Labor with its endless supply of new posters “celebrating” the government agency’s “work” and its participation in PR contests. Oh, and its own poetry contests for employees.
These are your tax dollars at work. If only they were going toward getting the Department of Labor to do some productive work....
In 1950, Congress created the National Science Foundation “to promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense.” In fiscal year 2014 the NSF deploys a budget of $7.2 billion, and remains the “major source of federal backing” for “mathematics, computer science and the social sciences.” One of their recent projects gives new meaning to the NSF motto: “where discoveries begin.”
“The federal government is spending nearly $1 million to create an online database that will track ‘misinformation’ and hate speech on Twitter,” notes Elizabeth Harrington of Fox News. To that end, the NSF is bankrolling a web service that will monitor “false and misleading ideas,” with a focus on political activity. Researchers at Indiana University used the NSF money to create the “Truthy” database, a service that, according to the grant, “could mitigate the diffusion of false and misleading ideas, detect hate speech and subversive propaganda, and assist in the preservation of open debate.”
That certainly qualifies as “science.” As we noted, with the current federal administration, “hate speech” can mean anything at odds with the views of the President of the United States and his vice-president. In current conditions, hate speech can mean advocacy of individual freedoms, limited government, accountability, and lower taxes. What we have here is another case of the government deploying federal agencies against the people, as with NSA intrusions and the IRS targeting scandal. Even if the “Truthy” squad sought or found an actual terrorist plot it remains unlikely whether they would do anything about it. Federal snoops knew full well that U.S. Army Major Nidal Hassan was planning an attack but did nothing to stop the Army psychiatrist from gunning down 13 and wounding more than 30 at Ford Hood in 2009. Then the government called this “workplace violence,” not even “gun violence.”
“Truthy” boss Filippo Menczer is a professor of informatics and computer science at Indiana University. As Katherine Rodriguez of CNS News points out, Menczer also “proclaims his support for numerous progressive advocacy groups, including President Barack Obama’s Organizing for Action, Moveon.org, Greenpeace, the Sierra Club, Amnesty International, and True Majority.” So cronyism is also going on “where the discoveries begin.”
As this column observes, government costs are high because of new federal entitlements such as Obamacare, the federal stimulus program, excessive military spending, the war on drugs, bloated bureaucracy, and new federal agencies such as the Consumer Finance Protection bureau, to name just a few of the big-ticket items. Government costs also run high because of lower-level profligacy that sometimes goes unnoticed.
As Darrell Smith and Phillip Reese note in the Sacramento Bee, in 2013 former Yolo Superior Court boss James B. Perry was paid $275,221, higher than any of California’s other 20,500 Superior Court employees. Most of his pay that year came from a lump-sum payment of $201,319, including $159,523 to buy out his health benefits and $41,796 for 520 hours of vacation time and paid time off.
Lump-sum payouts for benefits are uncommon. According to the Sacramento Bee report, in 2013 only 1,100 of California’s judicial employees received such payments and the average payout was $10,000. Perry’s massive cashout also included some $36,000 in defined benefits, deferred compensation, and “other pay.” His annual salary was $169,524, and he said a number of judicial officials are paid more. As for the lump-sum payout, he claimed it was a good deal for Yolo County, which is no longer obligated to pay for his health care. Actually, the payout is a fantastic deal for him, and a terrible deal for taxpayers.
Perry’s payout confirms that government defined-benefit pensions spike costs for taxpayers, now struggling in a weak economy and dealing with dysfunctional Obamacare. In the independent sector, few workers get cash for vacation days they don’t use, but they must fund this perk for ruling-class officials such as James B. Perry and thousands of others. That’s why government costs more than it should.
The Mercatus Center has been busy developing a new online database that quantifies just how the number of regulations governing every activity of the American people has grown since 1997. RegData 2.0 doesn’t just give a high-level summary, it allows readers to drill down into the U.S. federal government’s regulatory morass to quantify where most of the regulations are being generated.
Taking it for a test drive, we started with a simple count of the number of restrictions on activities that are have come to be recorded in the Code of Federal Regulations from 1997 through 2012.
Working from that database, the Mercatus Center’s Patrick McLaughlin identified the 10 biggest issuers of new regulations over the ten years from 2002 through 2012.
Having identifed the Environmental Protection Agency (EPA) as the biggest generator of new regulations and restrictions, we returned to the database and sorted through each of the industries that have seen the biggest increase in attention from the EPA. We found two sectors that have seen a remarkable increase in scrutiny over the last several years.
The first won’t be any surprise: the mining, quarrying and oil and gas extraction industries have seen the largest increase in regulations.
The second sector is very surprising. The EPA significantly boosted its regulation of the Finance and Insurance industry.
Now, we can understand why government agencies like the Federal Deposit Insurance Corporation or even the Departments of Commerce or the Treasury might seek to increase regulations over the Finance and Insurance industries, particularly following the 2008 financial crisis. But why on earth would the EPA even think it has a valid role in regulating these industries?
A check of the top industrial polluters in the United States turns up only Warren Buffet’s Berkshire Hathaway as a major contributor to pollution in the U.S. among an otherwise exclusive list of energy-related producers, and then, only because of the conglomerate’s MidAmerican Energy utility division.
As best as we can tell, the Obama administration’s EPA issued a large number of regulations in 2009 related to the creation of a cap-and-trade scheme for controlling greenhouse-gas emissions in advance of the U.S. Congress’s anticipated passage of laws that would enable the EPA to compel the industries it directly regulates to participate. But the legislative effort to establish the scheme failed to pass into law in 2010, despite the Obama administration having a supermajority in the U.S. Congress at the time, leaving behind a bunch of what are now seemingly useless regulations on the books.
But rather than remove the regulations, which have not been approved by the U.S. Congress, the EPA has instead chosen to keep them on the books, where they might lie dormant until some arbitrary time in the future, when they might suddenly erupt like a volcano and blanket the entire nation with a fresh layer of regulatory ash.
This summer, twenty graduate students at the University of Virginia who participated in a cross-disciplinary course on the national debt created a 10-minute YouTube video to help their fellow Millennials better understand where it comes from and also the consequences of the national debt. NBC reports:
Students of the Institute for Business in Society, a branch of UVA’s Darden School, put it all into laymen’s terms for anyone to understand. The animated video was funded by a grant from the Jefferson Trust, an initiative of the UVA Alumni Association.
“When you look at an issue like the national debt, it has far-reaching implications, across education, across healthcare, across a number of social and business sectors,” said Dean Krehmeyer, executive director.
Here’s the video:
For years private health care managed by greedy insurance companies had left thousands without coverage. Then Covered California, a wholly owned subsidiary of Obamacare, rushed to the rescue. Now everybody has with easy access, lower costs and superior care. That glowing government narrative leaves out a few harsh realities. As Emily Bazar of the CHCF Center for Health Reporting notes: “A worrisome trend is emerging among some Californians who thought they were safe and secure under Covered California: Their plans are being canceled without consent and sometimes without notice.”
Bazar sites the case of couple who signed up for an Anthem plan under Covered California and paid premiums but then the plan was canceled without input or permission. The couple was shoved onto Medi-Cal, a problem because “finding doctors who accept Medi-Cal is even more challenging than finding doctors who participate in Covered California’s limited networks.” Many of these people now in Medi-Cal “already have paid thousands of dollars in deductibles and co-pays, and some have even met their out-of-pocket limit under their Covered California plans.” They stand little chance of getting their money back. Others have been “dropped outright,” including a woman who only learned about the cancellation from her local pharmacy. It turns out that Covered California “told the insurer to cancel the policy,” without telling the policyholder.
David Spady, California director of Americans for Prosperity, notes that under Covered California, premiums have gone up for two years in a row, with increases between 22 and 88 percent. This from legislation that was supposed to lower premiums and bring everybody into the fold. Californians are “looking at higher premiums, worse coverage and back payments to the IRS.” It gets worse. As we noted, Covered California wasted $1.3 million on an absurd promotional video with Richard Simmons and paid $20,000 a month to former state finance director Ana Matosantos.
For all but the willfully blind Covered California constitutes government malpractice and abuse. Though dysfunctional and dangerous for the workers, Covered California works well as a cash cow for the ruling class.
We ask that question today because of a disturbing report released by the Department of Transportation’s Inspector General, who found that a number of states have failed to spend millions of dollars of grants they received from the federal government to improve safety on the nation’s highways. David Shepardson of the Detroit News describes the failure of the federal and state governments to act in the interest of the public’s safety even when they have more than adequate funding:
Washington —A new report says states have failed to spend more than $530 million in federal highway safety grants since 2006.
The Transportation Department’s Office of Inspector General said in a report released Monday that states haven’t spent $538.8 million in grants awarded by the National Highway Traffic Safety Administration between 2006 and 2012....
The grants are aimed at reducing the number of crashes and deaths. More than 33,500 people were killed in traffic crashes in 2012, up 3.3 percent, while 2.36 million were injured in 5.6 million crashes. “Unused safety grant funds represent delayed or lost opportunities to fund programs that help reduce fatalities, injuries, and property damage,” the report said.
The really funny part of this failure is that the Transportation Department threatened to shut down its highway safety grant programs back in 2010 unless the U.S. Congress acted to approve funding for the Department:
All of NHTSA’s State highway safety grant programs would shut down. In addition to the furlough of its personnel, NHTSA would have to shut down operations of Highway Safety Research and Development; National Driver Register (NDR); and Highway Safety Grants, and would have to stop paying all bills for the programs under these accounts.
The Congress acted to approve the funding, and now we find out that the recipients of these safety grants apparently are either unwilling or incapable of spending the amount of money they’ve been awarded for the specific purpose of improving the public’s safety on the nation’s highways.
Something to consider if you see any accidents on the nation’s highways this Labor Day holiday weekend!
The federal holiday of Labor Day, the first Monday in September, is supposed to be a tribute to American workers. While enjoying a day off, if they get one—government employees do—those workers might use the occasion to recall some other realities, including a longstanding government rip-off.
As we noted in July, for 71 years the federal government has been getting workers’ money before they do. Before 1943, their paycheck included all the money they had earned through their labor. Then the government said it was wartime, so they needed the workers’ money more than the workers themselves needed their earnings. So the federal government set up a “team of experts” that included economist Milton Friedman. This stellar team came up with the brilliant idea of withholding money from worker’s paychecks. It later occurred to Friedman that he was helping to make government too big, too intrusive, and too destructive of freedom. That is all true, but the government likes getting workers’ money before they do, so on Labor Day, 2014, the government still has its hand in the workers’ pockets.
As they enjoy Labor Day, workers might also recall that up to April 21 they were in effect working for the government. As we also noted, Tax Freedom Day marks the date when the nation as a whole has “earned enough money to pay its total tax bill for the year.” This year it was a full 111 days into the year, and three years later than last year. Because of new entitlements and new federal agencies such as the Consumer Financial Protection Bureau it will doubtless be coming later.
Labor Day implies that the federal government cares about the workers. That is doubtful, but one thing remains certain: the government likes getting the workers’ money before they do. This Labor Day workers will be hard pressed to find any politician or government official who seeks to reform this injustice. And as long as the government can grab the money, wider reforms against government waste, fraud, and abuse are unlikely.
Joseph Lawler of the Washington Examiner reports on the state of the portion of the U.S. government’s debt that is held by the public:
The federal debt this year will be double what it was before the financial crisis, Congress’ official budget scorekeeper projected Wednesday morning.
The debt is on pace to reach 74 percent of the country’s economic output by the end of the year, double what it was in 2007 and the highest percentage since 1950, according to the Congressional Budget Office.
In its update to its projections for the budget and economy, the agency slightly upped its estimate for the 2014 deficit, which it now expects to total $506 billion, a $170 billion decline from 2013.
The falling deficits sound like good news, but there are two important things to understand about it. First, falling deficits mean that the national debt is still increasing — just more slowly than they previously were. In this case, assuming things play out as projected, that means that instead of trillion-dollar deficits adding a trillion dollars a year to the nation’s debt, we now have a half-trillion dollar deficit adding a half-trillion dollars a year to the nation’s debt.
The second thing to remember is that the latest deficit projections, which also assume that the United States will never experience another recession, indicate that the current decline in the federal government’s budget deficits is expected to be only a short-lived trend. It is expected to reverse as early as 2016.
Deficits will continue to shrink next year, according to the CBO, lowering the federal debt. But then they’re expected to begin rising again in 2016, eventually bringing the federal debt up to 77 percent of GDP in 2024.
That debt trajectory will have serious consequences if unaddressed, the CBO warns, including “restraining economic growth” and “eventually increasing the risk of a fiscal crisis.”
Would this be a bad time to point out that the preferred policy solution of many of the world’s politicians — greatly increased taxes and minor reductions in what would otherwise be the even faster growth of government spending — have somehow managed to restrain economic growth and to increase the risk of a fiscal crisis in every place where those policies have been implemented?
So at least we know that those outcomes won’t happen by accident!
“The 2009 federal Cash for Clunkers program is often hailed as a success because it jump-started new-vehicle sales,” notes Kathleen Pender at sfgate.com, “but a new study says it actually cost car dealers $3 billion in lost revenue because its fuel-efficiency requirement caused people to buy cheaper cars than they would have otherwise.”
The new study is “Cash for Corollas” from economists at Texas A&M University. The goals of the federal program were to stimulate the economy by accelerating car sales and boosting fuel economy. But study author Mark Hoekstra said the pursuit of both goals caused the program to fail.
The Car Allowance Rebate System, official name of Cash for Clunkers, was part of a 2009 economic stimulus program intending to boost the U.S. auto industry. The Texas study finds that the federal program created a drag on the economy because Americans bought cheaper cars than they would have without the stimulus. Fox News finds that the “stimulus” also cost taxpayers $3 billion, but the damage wasn’t entirely economic.
As Wynton Hall of breitbart.com noted last year, Cash for Clunkers drove up car prices and unleashed an environmental nightmare by “shredding, not recycling, many of the 690,000 cars people traded in for an up to $4,500 car credit.” For Hall it was a classic illustration of “the law of unintended consequences.” And Hall has company in the old-line establishment media.
Way back in 2011 Brad Plumer conceded in the Washington Post that the program’s naysayers were right. Cash for Clunkers was “a pretty lousy bargain as far as carbon policy goes,” and “even if the program did have some benefits, it’s hard to argue that it was an efficient way to dole out cash.” Last year Craig Eyermann cited estimates that “the $2.85 billion program really produced a $1.5 billion deadweight loss to the U.S. economy.” On the other hand, the program is only one of many federal clunkers.