After all of the rancor last week over his planned back‐to‐school address, it was predictable that in the end President Obama would offer a largely non‐controversial speech about working hard and staying in school. If he sticks to the text released today, that is pretty much what he will do. Unfortunately, whether or not that was his original intent – and no one knows for sure but the President and his advisors – many Obama supporters will likely use the relatively staid final product as grounds to smear people concerned about the speech as right‐wing kooks or out‐of‐control partisans. At the very least, such an outcome would be in keeping with a lot of the email I’ve gotten since the story first broke. But it will miss several critical points:
- No matter how innocuous the content of the speech, this could certainly be an address with very political goals, intended to cast the president in the warm glow of a man who just cares about kids. From kissing babies, to photo‐op reading sessions featuring cute tikes on classroom floors, this could be just another instance of the old practice of using children as props for political gain. And how presumptuous of the president to make himself – rather than the children, their teachers, and their schools – the center of attention on what is the first day of school for millions of kids. Finally, add the parts of the speech that sound like the President patting himself on the back for overcoming difficulties as a youth, and the speech could easily have political aims.
- Many people feared, thanks to politically and ideologically suggestive lesson guides created by the U.S. Department of Education, that the speech would be an effort at indoctrination. Critically, it was only after very loud, initial outrage that the Department made changes to the guides and the White House announced it would release the text of the speech ahead of time. Yet administration defenders act like everyone knew from the outset that the speech would just be about working hard and staying in school. And who knows what the speech might have looked like had there not been so negative an initial reaction.
- Despite its generally innocuous tone, the speech does contain some controversial political and ideological assertions, including that “setting high standards, supporting teachers and principals, and turning around schools” is the job of the federal government. Also, the things the President highlights as worthy aspirations are disproportionately government and non‐profit work. And then there’s this self‐aggrandizing assertion: “Your families, your teachers, and I are doing everything we can to make sure you have the education you need to answer these questions. I’m working hard to fix up your classrooms and get you the books, equipment and computers you need to learn.”
- Ultimately, no matter what happens now that the speech has been published, one thing cannot be ignored or spun: When government controls education, wrenching political and social conflict is inevitable. Americans are very diverse – ideologically, ethnically, morally, religiously – but they all have to support a single system of government schools. As a result, they are constantly forced to fight to have their values and desires respected, and the losers inevitably have their liberty infringed. In this case, reasonable people who want their children to hear the President must fight it out with equally reasonable people who do not want their children to watch the speech in school. It’s a situation completely at odds with a free society, but as we have seen not just with the current conflict, but seemingly endless battles over history textbooks, the teaching of human origins, sex education, and on and on, it is inevitable when government runs the schools. Which is why the most important lesson to be learned from this presidential‐address donnybrook is that Americans need educational freedom. We need universal school choice or crippling conflicts like this will keep on coming, liberty will continue to be compromised, and our society will be ripped farther and farther apart.
Last November’s rejection of the failed GOP didn’t mean voters were ready to embrace a massive increase in the size of the federal government, says Scott Keeter, director of survey research at Pew Research Center:
Obama campaigned for strong government action on the economy and health care, and most of his voters agreed with this direction. But Obama’s efforts to expand the role of government have alienated many of those who did not vote for him but nonetheless gave him high marks when first he took office.
Pew Research’s political values survey this spring showed no surge in public demand for more government. Indeed, anti‐government sentiment, which had been building for years, was heightened by the financial bailout and stimulus program.
What do workers in finance, energy, and the federal government have in common? Very generous compensation packages, according to data from the Bureau of Economic Analysis.
When I posted federal compensation data last week, I received a flood of comments that disputed my contention that federal workers are overpaid. A common retort was that “federal workers are not burger flippers.” That’s true, but workers in the computer systems design, computer manufacturing, and chemicals industries are not burger flippers either, yet those folks also earn less than federal workers, on average.
The Bureau of Economic Analysis presents compensation data for 72 industries that span the U.S. economy (Table 6.2D). Figure 1 shows the 20 industries with the highest levels of average compensation, including wages and benefits. It also shows the average for all U.S. private industries and the average for the industry with the lowest compensation, which, indeed, includes burger flipping. (I’ve simplified the names of the industries in some cases).
Federal civilian workers have the seventh highest average compensation of 72 industries. Compensation in the federal civilian workforce is topped only by compensation in three finance‐related and three energy‐related industries.
Should federal compensation be so high? We are always told that the 1.9 million federal civilian workers are “public servants,” implying that they are selflessly sacrificing for the good of the nation. I’m sure that most federal workers are dedicated employees, but looking at these compensation levels, I don’t see much sacrificing going on.
It is true that there are some elite agencies in the government that need to have high compensation levels. But the bulk of the federal workforce is in sprawling bureaucracies such as the U.S. Department of Agriculture, which has a huge army of about 100,000 workers. The main job of USDA workers is to administer farm aid, food stamps, and other subsidy programs. That sort of paper‐pushing work is not rocket science.
The other point I made last week is that the BEA data makes clear that federal compensation has skyrocketed this decade. Figure 2 provides more support for that claim.
Federal civilian workers had the fifth highest average compensation increase among 72 industries between 2000 and 2008. Average federal civilian compensation increased 57 percent, which compared to the overall average increase in the private sector of 31 percent.
Let’s slow this freight train down. Federal pay ought to be frozen for a period of years, at least until the economy recovers and private sector pay starts catching up.
My post yesterday on federal worker pay generated a large and aggressive response from federal workers, both in my inbox and on websites such as Fedsmith.com. (See also Federal Times and Govexec). Here are four points raised in criticism:
First, people accuse me of producing distorted data somehow. Actually, it’s essentially just raw Bureau of Economic Analysis data, but the data is usually overlooked by the media because I don’t think the BEA puts out a press release on it. Anyway, the average wage data is from BEA Table 6.6D. The average compensation data is simply total compensation (Table 6.2D) divided by the number of workers (Table 6.5D).
Second, people argue that reporting overall averages for wages and compensation is somehow illegitimate. People email me comments like “my federal salary is only $50,000, yet you claim that federal workers make $79,000.” All I can say to folks like this is that there must be a federal worker out there making $108,000 who balances you off.
Third, people argue that a better analysis would be to compare similar jobs in the private and public sectors, rather than looking at overall averages. I agree that that would be very useful. Unfortunately, the BEA data is not broken down that way. At the same time, the BEA data provides the most comprehensive accounting for the value of employee benefits of any data source. Benefits are a very important part of federal compensation, and so that’s why I look to the BEA data.
Fourth, many people argue that the federal government has an elite workforce with many highly educated people. Certainly, that’s an important factor to consider. However, that is the reason why I focused on the pay trend over the last eight years. The federal worker compensation advantage rose from 66 percent in 2000 to 100 percent in 2008. Has the composition of the federal workforce really changed that much in just eight years to justify such a big relative gain? I doubt it.
A final consideration is to look at a “market test” of the adequacy of compensation in the public sector–the quit rate. The voluntary quit rate in the federal government is just one‐third or less the quit rate in the private sector (Table 16 near the bottom here).
That is strongly suggestive of “golden handcuffs” in federal employment. While many federal workers probably grumble about their jobs (as many private sector workers do), they know that the overall package of wages, benefits, and extreme job security (Table 18 here) is very hard to match in the competitive private market, and so they stay put.
An article published this week by National Review magazine blames the many problems of California on—take a guess—high taxes, over‐regulation of business, runaway state spending, an expansive welfare state? Try none of the above. The article, by Alex Alexiev of the Hudson Institute, puts the blame on the backs of low‐skilled, illegal immigrants from Mexico and the federal government for not keeping them out.
Titled “Catching Up to Mexico: Illegal immigration is depleting California’s human capital and ravaging its economy,” the article endorses high‐skilled immigration to the state while rejecting the influx of “the poorly educated, the unskilled, and the illiterate” immigrants that enter illegally from Mexico and elsewhere in Latin America.
Before swallowing the article’s thesis, consider two thoughts:
One, if low‐skilled, illegal immigration is the single greatest cause of California’s woes, how does the author explain the relative success of Texas? As a survey in the July 11 issue of The Economist magazine explained, smaller‐government Texas has avoided many of the problems of California while outperforming most of the rest of the country in job creation and economic growth. And Texas has managed to do this with an illegal immigrant population that rivals California’s as a share of its population.
Two, low‐skilled immigrants actually enhance the human capital of native‐born Americans by allowing us to move up the occupational ladder to jobs that are more productive and better paying. In a new study from the Cato Institute, titled “Restriction or Legalization? Measuring the Economic Benefits of Immigration Reform,” this phenomenon is called the “occupational mix effect” and it translates into tens of billions of dollars of benefits to U.S. households.
Our new study, authored by economists Peter Dixon and Maureen Rimmer, found that legalization of low‐skilled immigration would boost the incomes of American households by $180 billion, while further restricting such immigration would reduce the incomes of U.S. families by $80 billion.
That is a quarter of a trillion dollar difference between following the policy advice of National Review and that of the Cato Institute. Last time I checked, that is still real money, even in Washington.
I was never a fan of Dick Cheney's one percent doctrine.
According to Ron Suskind, after 9/11 Cheney explained to law enforcement and intelligence officials that they should treat even the one percent chance of a terrorist attack as a mathematical certainty. The particular case was of a Pakistani nuclear scientist helping al-Qaeda to acquire a nuclear bomb, but the standard became a shorthand for U.S. counterterror efforts generally. No scale of effort would be too great. Better to chase down 100 leads, 99 of which turn out to be bogus, because finding just that one nugget would have been worth the level of effort.
Now we have evidence that the federal government is chasing down far more than 99 blind alleys for just one lead. From today's front-page story in the New York Times, Eric Schmitt explains how the FBI has adapted and evolved since 9/11:
The bureau now ranks fighting terrorism as its No. 1 priority. It has doubled the number of agents assigned to counterterrorism duties to roughly 5,000 people, and has created new squads across the country that focus more on deterring and disrupting terrorism than on solving crimes.
But the manpower costs of this focus are steep, and the benefits not always clear. Of the 5,500 leads that the squad has pursued since it was formed five years ago, only 5 percent have been found credible enough to be sent to permanent F.B.I. squads for longer-term investigations, said Supervisory Special Agent Kristen von KleinSmid, head of the squad. Only a handful of those cases have resulted in criminal prosecutions or other law enforcement action, and none have foiled a specific terrorist plot, the authorities acknowledge. (Emphasis mine.)
So, just to review:
- 5,500 leads over 5 years
- 5 percent deemed credible
- "A handful" technically would mean five or less, but charitably might total a few dozen. Still, that translates to far less than 1 percent of leads investigated resulting in a criminal prosecution.
But, and here's the kicker,
- None -- zero, zip, nada -- foiled a specific terrorist plot.
On the face of it, this seems like a waste of time and resources that should be spent elsewhere.
Pardon me while I pile on the post earlier today by my colleague Sallie James about the Obama administration refusing to allow more sugar to be imported to the United States. The U.S. Department of Agriculture this week declined to relax the quotas the federal government imposes on imported sugar despite soaring domestic prices and understandable complaints from U.S. confectioners and other sugar‐consuming businesses about potential shortages.
For all his talk about change, President Barack Obama has shown no inclination to pursue meaningful reform of U.S. agricultural programs. He supported the subsidy‐laden and protectionist farm bill that finally passed Congress in 2008. On the eve of the U.S. presidential election in October 2008, he wrote a letter to the U.S. sugar industry reminding growers that they were one special interest that had nothing to fear from an Obama administration.
In his letter, he offered the sugar lobby this assurance:
With respect to the sugar program specifically, while it’s true I have had concerns about the program, I will commit to listening and working with you in the future to ensure that we have a safety net that works for all of agriculture.
He then went on to criticize his opponent John McCain for opposing the farm bill and voting consistently against the sugar program (or, as Obama put it, “against sugar growers”).
In my new Cato book, Mad about Trade: Why Main Street America Should Embrace Globalization, I call the sugar program “the poster boy for self‐damaging protectionism.” As I write in the book,
When the program is not raising prices for consumers at the store, it is savaging the bottom line for American companies. Artificially high domestic sugar prices raise the cost of production for refined sugar, candy and other confectionary products, chocolate and cocoa products, chewing gum, bread and other bakery products, cookies and crackers, and frozen bakery goods. Higher costs cut into profits and competitiveness, putting thousands of jobs in jeopardy.
If the president is looking for good bedtime reading on why he should dump the sugar program, I suggest he go straight to pages 147, 154–55, 160–62, and 170–72.