Topic: Government and Politics

Costa Rican President Calls for New Constitution

President Oscar Arias of Costa Rica has joined the trend in Latin America of calling for a new constitution that would expand executive powers and get rid of “unnecessary checks” on the president’s authority. Although Arias has less than 9 months left in office and can’t run for reelection, his brother and current minister of the presidency — a primer minister of sorts — has openly said he’s interested in running for president in 2014. A new constitution with expanded executive powers would fit him just fine.

Arias’ call has been received with broad skepticism. La Nación, Costa Rica’s leading newspaper, said that trying to make the government more efficient through a constitutional convention was like “killing a mouse with cannon fire.” The newspaper also said that the idea of dismantling the checks and balances on executive power sounds like an effort to create an “imperial presidency.” Maybe we should send our colleague Gene Healy to study the case.

However, the most disturbing aspect of Arias’ call was his harsh criticism of the media. Borrowing from the script of Rafael Correa in Ecuador and Hugo Chávez in Venezuela, Arias described news outlets as “corporations interested in making a profit” that don’t necessarily pursue the “public good.” He asked the media to “tone down” its criticism of government officials, and said that journalists “should understand their role within a higher framework.” He complained that news outlets claim to represent the public interest, without any control or accountability.

That a politician with a thin skin complains about media criticism is hardly news. However, the fact that Arias did it while calling for a new constitution that would change the institutional and legal framework of Costa Rica (including the role of the media) should be interpreted as a threat to freedom of the press.

Most people outside Costa Rica see Arias as an accomplished democrat who won the Nobel Peace Prize for his efforts to bring peace to Central America during the 1980s. Most recently he attempted to mediate the conflict in Honduras after Manuel Zelaya was (legally) removed from office. However, many people in Costa Rica fret about what they perceive as an increasingly controlling style of governing by Arias and his brother, intimidating the media, bullying the opposition, crowding key government posts with allies and cronies, and now hoping for a dynastical succession in 2014.

In Massachusetts, the Rule of Law Dies

Lawmakers in the Bay State are rushing to change state law to make sure the late Sen. Edward Kennedy’s seat is filled as soon as possible with a reliable Democratic successor.

Never mind that as recently as 2004 the same state legislature had changed state law to mandate that a vacant Senate seat could only be filled by a special election to be held within five months of the vacancy.

Before then, as in most other states, vacancies were filled by an appointment of the governor, with the seat coming up for a vote at the next federal election. But in 2004, the Democratic legislature changed the law to prevent then-governor Mitt Romney, a Republican, from naming a Republican to replace Democratic Sen. John Kerry if he were to be elected president. Kerry lost to George W. Bush, but the law remained on the books.

That was then; now is now. With Democrats in Washington wanting to maintain their 60-vote caucus in the Senate, a five-month delay to let the people of Massachusetts actually vote on who will replace Kennedy has become an intolerable roadblock to progress. According to a report from Bloomberg News this morning, the Democratically-dominated legislature in Massachusetts is about to change the law back to allow the now-Democratic governor to appoint a successor within a month.

This is a textbook example of how politicians routinely ignore The Rule of Law in pursuit of political aims.

In his book, The Road to Serfdom, Friedrich Hayek devoted an entire chapter to the importance of the rule of law to a free society. “Nothing distinguishes more clearly conditions in a free country from those in a country under arbitrary government than the observance in the former of the great principles know as the Rule of Law,” Hayek wrote. He defined the phrase to mean “that government in all its actions is bound by rules fixed and announced beforehand,” and not subject to be changed arbitrarily depending on circumstances.

The Bloomberg story contained a less scholarly but equally sound critique of what is going on in Massachusetts: “It shows Democrats don’t care about principle,” said Massachusetts House Minority Leader Bradley Jones, a North Reading Republican. “They don’t care about debate. They don’t care about the rules. It really is disgusting.”

Federal Pay: Response to the Critics

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 (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.

A New Book from David Boaz? Tax Tips for Democrats

Okay, well maybe Tax Tips for Democrats won’t ever make it to the publisher, but while speaking at Cato University this summer, David Boaz offered a few tips to any more Democrats with tax problems who are thinking about joining the current administration.

“Some people say the best thing about electing a Democratic president is all the back taxes we collect from their appointees,” says Boaz. “It helps to balance the budget.”

Watch the whole thing:

C-SPAN 2 will air Boaz’s talk on the state of freedom in America this Sunday at 11:30 AM EST.

35,000 Earmark Requests — Just 50 Reps to Go’s project to collect congressional earmark data continues to make great strides. Over 35,000 earmark requests are in the database, and fewer than 50 representatives remain on the “wanted” list.

It’s not all good news. Even some appropriations committee members published their earmark disclosures as scanned PDFs. That’s transparency in name, but not in spirit. Cato’s December policy forum on government transparency was titled “Just Give Us the Data!”, and scanned PDFs are not data … .

On the earmarks home page, the earmark requests collected so far are mapped by state and sortable by member of Congress and senator. Visitors can vote and comment on earmark requests, or edit a wiki article about requests, adding personal knowledge about projects they are familiar with.

Federal Pay Continues Rapid Ascent

The Bureau of Economic Analysis has released its annual data on compensation levels by industry (Tables 6.2D, 6.3D, and 6.6D here). The data show that the pay advantage enjoyed by federal civilian workers over private-sector workers continues to expand.

The George W. Bush years were very lucrative for federal workers. In 2000, the average compensation (wages and benefits) of federal workers was 66 percent higher than the average compensation in the U.S. private sector. The new data show that average federal compensation is now more than double the average in the private sector.

Figure 1 looks at average wages. In 2008, the average wage for 1.9 million federal civilian workers was $79,197, which compared to an average $50,028 for the nation’s 108 million private sector workers (measured in full-time equivalents). The figure shows that the federal pay advantage (the gap between the lines) is steadily increasing.

Figure 2 shows that the federal advantage is even more pronounced when worker benefits are included. In 2008, federal worker compensation averaged a remarkable $119,982, which was more than double the private sector average of $59,909.

What is going on here? Members of Congress who have large numbers of federal workers in their districts relentlessly push for expanding federal worker compensation. Also, the Bush administration had little interest in fiscal restraint, and it usually got rolled by the federal unions. The result has been an increasingly overpaid elite of government workers, who are insulated from the economic reality of recessions and from the tough competitive climate of the private sector.

It’s time to put a stop to this. Federal wages should be frozen for a period of years, at least until the private-sector economy has recovered and average workers start seeing some wage gains of their own. At the same time, gold-plated federal benefit packages should be scaled back as unaffordable given today’s massive budget deficits. There are many qualitative benefits of government work—such as extremely high job security—so taxpayers should not have to pay for such lavish government pay packages.

Update: I respond to some criticisms of this post here.

Update 2: Compensation data for federal workers vs. other industries here.

Update 3: In September, the government revised the data for private sector workers. On 9/30/09, Figure 1 and the related text were updated to reflect this change.