Tag: bureaucrats

Obama Small Business Lending Fund Likely A Bust

President Obama has announced his intention to use $30 billion in TARP funds to create a new small business lending fund.  In all likelihood, this is $30 billion the taxpayers will never see returned.

First of all, the problem facing small business, outside of the massive uncertainty being created by Washington, is one of credit availability, not cost.  For those who can get credit, its quite cheap, arguably too cheap.  So if the president doesn’t intend to lower the cost of credit, the plan must be to lower the quality; using the $30 billion to cover expected credit losses.  Of course, we tried throwing lots of taxpayer money at unsustainable homeownership, is there any reason to believe throwing taxpayer money at unsustainable businesses is going to work any better?

Using TARP funds for this program is also somewhat disingenuous.  This program adds $30 billion to the deficit regardless of whether it’s funded by TARP or by Congressional appropriations.  Taking from the TARP only allows the President to keep treating the TARP as his personal slush fund.  Nowhere in the TARP legislation can you find language authorizing the use of funds to cover credit losses on new loans.  Being a constitutional scholar, the President should know very well that the spending power rests with Congress, not the President.  If we are to have a new small business lending program, it should be designed and funded by Congress, not bureaucrats at the Treasury Department.

Historically the two main sources of small business start-up funding have been home equity and credit cards.  Clearly the availability of home equity has declined.  Sadly as well, with the passing of credit card “reform” the availability of credit card lending has also declined.  If the President truly wants to help small business, then the first thing to do is ask Congress to repeal the credit card bill and then just get out of the way.

Great Moments in Bureaucracy

The picture below, taken from a story in The Economist, shows that France, Germany, and Italy are among the nations with the most central bank employees (as a share of the population). In some sense, this is a dog-bites-man factoid. After all, is anyone surprised that Europe’s major welfare states have bloated public payrolls? But there’s more to this story. All three of these central banks ceased to have a monetary policy, starting back in 2002, when their nations adopted the euro. The mission is gone, but the bureaucracy lives on.

Central bank bureaucrats

To be fair, the bureaucrats in these nations presumably are not sitting in quiet rooms playing minesweeper. Perhaps these central banks are responsible for other functions, such as financial regulation. Of course, given how governments around the world pursued policies that led to a financial crisis, perhaps all of us would be better off if bureaucrats did play computer games all day.

Pampered European Bureaucrats Threaten Strike

There’s been a lot of attention given to overpaid government workers in America, as many people have documented, but the problem is global. Bureaucrats who work for the European Union get lavish pay and benefits, yet are threatening to strike because of a proposed pay freeze. These mandarins already pay reduced taxes, get a host of special allowances, and even have the gall to demand free travel on public transport. Interestingly, as this story for Euractiv.com indicates, they apparently realize they have privileged positions and are worried that the current controversy may spark some resentment from over-burdened taxpayers:

Staff at the European institutions are preparing to go on strike next week in a bitter pay dispute sparked by national governments’ decision to block a routine salary increase for EU civil servants. Civil service staff are due to receive a 3.7% pay hike… There is widespread acceptance that the pay rise is legally binding but other options are currently under consideration – much to the chagrin of unions. Diplomatic sources indicated it may be possible to proceed with the 3.7% pay rise, but to initiate a parallel move which would effectively negate the increase. This could include increasing the so-called ‘crisis levy’, which allows European civil servants to be taxed in exceptional circumstances.  …Diplomats said some EU civil servants are concerned that the dispute could open a can of worms if the spotlight is turned on their generous pay and benefits, including the permanent repatriation allowance paid to civil servants – even if they have been in Brussels for 30 years.

More on ‘Race to the Top’

Andrew Coulson has already touched on this, but I thought I’d throw in my two cents. “Race to the Top Fund” guidelines were released today and they should please no reformers. They are simultaneously too weak, and way too much.

They are too weak because they don’t require states to actually do anything of substance. Have plans for reform? Sure. Break down a few barriers that could stand in the way of decent changes? That’s in there, too. But that’s about it. And the money is supposed to be a one-shot deal – once paper promises are accepted and the dough delivered, the race is supposed to be over.

In light of those things, how is this more appropriately labeled the Over the Top Fund than the Race to the Top Fund? Because while not requiring anything, it tries to push unprecedented centralization of education power.It calls for state data systems to track students from preschool to college graduation. It calls for states to sign onto “common” – meaning, ultimately, federal – standards. It tries to influence state budgeting.

In other words, it attempts to further centralize power in the hands of ever-more distant, unaccountable bureaucrats rather than leaving it with the communities, and especially parents, the schools are supposed to serve – exactly what’s plagued American education for decades. And, of course, it does this with huge  gobs of federal money taxpayers have no choice but to supply.

To Make Health Care Affordable, Don’t Add Regulations — Repeal Them

David Freddoso of the Washington Examiner reveals how the monopolies that states enjoy over licensing doctors, nurses, and other clinicians reduce access to care for low-income Americans:

Stan Brock just wants to help. The former co-star of “Wild Kingdom” wants to deliver free medical, dental and vision care to the poor. Whereas most politicians talk about “bending the cost curve” in health care, Brock simply wants to break it - to provide care free of charge, at the hands of unpaid volunteer doctors and dentists using donated equipment.

Brock’s group, Remote Area Medical, wants to bring its services to Washington, and soon. He wants his volunteer eye doctors to grind new glasses on the spot for those having trouble seeing.

He wants his dentists to pull rotten teeth and perform root canals in badly neglected mouths. He wants to give checkups and HIV tests to the uninsured and the underinsured. No questions asked.

The only question is whether the bureaucrats will let him do it.

That sounds like hyperbole.  It’s not.  Read the whole thing (it’s short) and you’ll learn how in-state clinicians shamelessly use monopolistic licensing laws to protect themselves from competition – even at the cost of denying medical care to poor people.

Yesterday, Cato released a study where I advocate breaking up the state’s licensing monopolies and making state-issued licenses portable.  Such a law would completely solve Remote Area Medical’s problem.

This Cato study by economist Shirley Svorny reveals how clinician licensing laws do more harm than good.

(Cross-posted at Cato@Liberty Politico’s Health Care Arena.)

Race to the Top = Klondike Bar

Remember the ads in which actors…er, people…would enthusiastically do demeaning things for Klondike Bars? You know, ads like this one, in which Shakespeare stoops to writing a TV sitcom in exchange for one of those chocolate-encrusted ice cream blocks?

The message, of course, was that the Bard and all the other Klondike-cravers took the  deals for the dessert, not, obviously, for the love of what they were being bribed to do.  They just wanted the reward – even the biggest idiot understood that.

Sadly, it seems that U.S. Secretary of Education Arne Duncan might be hoping that the public is  dumber than the biggest idiot. In a recent interview, he talked as if there might actually be  states suddenly making education changes needed to get part of his $5-billion “Race to the Top” fund not because they want the money, but because the reforms are the right thing to do.

“It’s really not about the money - it’s about pushing a strong reform agenda that’s going to improve student achievement,” he said. “We’re going to invest in those states that aren’t just talking the talk but that are walking the walk….If folks are doing this to chase money, it’s for the wrong reasons.”

Only in politics would you bribe people to act, then declare that they’d better not be acting just to get the bribe. But you wouldn’t want the public realizing that politicians and bureaucrats are just as selfish as corporate titans or swindlers, would you?

The problem Duncan is trying to deal with, of course, is convincing the public that reforms coerced with Race-to-the-Top dollars will stay in place after the one-shot-deal bucks are gone. But as even the biggest couch potato knows, Shakespeare simply won’t write for Gary Coleman if there’s no ice cream at the end.

Nanny State Doesn’t Like Competition - the English Version

A previous post by David Boaz poked fun at bureaucrats in Michigan for threatening a woman for the ostensible crime of keeping an eye on her neighbors’ kids without a government permit. English bureaucrats are equally clueless, badgering two women who take turns caring for each other’s kids. The common theme, of course, is that bureaucrats lack common sense – but the real lesson is that this is the inevitable consequence of government intervention (especially when politicians say they are “doing it for the children). The BBC reports:

England’s Children’s Minister wants a review of the case of two police officers told they were breaking the law, caring for each other’s children.

Ofsted said the arrangement contravened the Childcare Act because it lasted for longer than two hours a day, and constituted receiving “a reward”.

It said the women would have to be registered as childminders.

…Ms Shepherd, who serves with Thames Valley Police, recalled: “A lady came to the front door and she identified herself as being from Ofsted. She said a complaint had been made that I was illegally childminding.

“I was just shocked - I thought they were a bit confused about the arrangement between us. So I invited her in and told her situation - the arrangement between Lucy and I - and I was shocked when she told me I was breaking the law.”

…Minister for Children, Schools and Families Vernon Coaker insisted the Childcare Act 2006 was in place “to ensure the safety and wellbeing of all children”.