Is it April Fool’s Day? Has somebody in Paris hacked the website at the Organization for Economic Cooperation and Development? Have we been transported to a parallel dimension where up is down and black is white?

Please forgive all these questions. I’m trying to figure out why any organization – even a leftist bureaucracy such as the OECD – would send out a press release entitled, “Rising tax revenues: a key to economic development in Latin American countries.”

Not even Keynesians, after all, think higher taxes are a recipe for growth.

Ah, never mind. I just remembered that the OECD is a hotbed of statism, so the press release makes perfect sense. After all, the US-taxpayer-funded organization has become infamous for reflexively advocating big government.

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The Congressional Budget Office (CBO)released a study telling Americans if they want a raise, they should go work for the federal government, because federal workers are compensated much better than those in the private sector. The CBO did an apples to apples comparison of federal and private sector employee salaries and benefits from 2005-2010. The compared workers who were similar in the following characteristics:

• Level of education
• Years of work experience a
• Occupation
• Employer’s size,
• Geographic location (region of the country and urban or rural location)
• Demographic characteristics (age, sex, race, ethnicity, marital status, immigration status, and citizenship).

…and what they found was staggering.

Salary:

• Federal civilian workers with no more than a high school education earned about 21 percent more, on average, than similar workers in the private sector.

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I’ve written several times about a proposed IRS regulation that would force American banks to put foreign law above U.S. law. I’ve repeatedly warned that the scheme, which would force financial institutions to report the deposit interest they pay to foreigners, is bad economic policy, bad regulatory policy, and bad banking policy.

My arguments have included:

• Explaining that this onerous regulatory scheme will result in capital fleeing to other nations, needlessly harming the financial sector and putting American banks at risk.
• Explaining why the proposal is a threat to human rights since many foreigners keep money in the United States because they live in nations with unstable and/or repressive governments.
• Explaining that the IRS action is a gross abuse of the regulatory process since an executive branch agency does not have the authority to overturn laws enacted as part of the democratic process.
• Explaining that this proposed regulation is just the beginning, and that proponents hope to issue follow-up rules that would cripple policies making America a haven for global capital.

But these points don’t seem to matter to the Obama Administration, which is ideologically committed to the anti-tax competition agenda of Europe’s welfare states. This is why the White House supports all sorts of destructive policies, including not only this misguided regulation, but also the creation of something akin to a world tax organization that will have power to block free-market tax policy.

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Politicians in Europe have spent decades creating a fiscal crisis by violating Mitchell’s Golden Rule and letting the government grow faster than the private sector.

As a result, government is far too big today, and nations such as Greece are in the process of fiscal collapse.

But that’s the good news – at least relatively speaking. Over the next few decades, the problems will get much worse because of demographic change and unsustainable promises to spend other people’s money.

(By the way, America will suffer the same fate in the absence of reforms.)

Here’s a stark indicator (click to enlarge) of why Greece is in the toilet.

Look at the skyrocketing number of people riding in the wagon of government dependency (and look at these cartoons to understand why this is so debilitating).

By the way, Greece’s population only increased by a bit more than 16 percent during this period. Yet the number of bureaucrats jumped by far more than 100 percent.

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With the ever-increasing role the federal government is playing, the state of primary and secondary education in these United States has over the last thirty-plus years decayed – tragically, tremendously and inexorably.

President Jimmy Carter’s 1979 gift to the teachers’ union Educrats – the Department of Education – changed fundamentally and increased dramatically the federal role in K-12 education.

Government schools have year by year diminished as education facilities – and risen instead as indoctrination centers.

Where graduates can’t read the diplomas they’re handed – but they can roll a condom on a banana.

The taxpayer money spent on schools and union pet projects has increased again and again, year after year.

We’ve by now since the Department’s inception more than doubled per student spending – from $5,718 (1980-81) to $10,441 (2007-08) (yes, that’s inflation-adjusted).

The mythical import of lowering student-teacher ratios (it makes little to no difference in learning) imposed upon us a rash of new union hires – that did nothing to improve education, but did a great deal to inflate the union dues-paying rolls.

Yet another myth – Head Start – also does nothing to improve scores, but does a great deal to improve the unions’ bank accounts.

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Richard Epstein in Hoover’s Defining Ideas:

What is so striking about Obama’s shopworn rhetoric is its juvenile intellectual quality. His explanation for how the AJA will create jobs is a non-starter because he does not explain how we get from here to there. As in so many other cases, the president thinks that waving a wand over a problem will make his most ardent wishes come true, even when similar earlier efforts have proved to be dismal failures. This dreadful hodgepodge of a bill will likely be dead-on-arrival in Congress, but it remains a patriotic duty to explicate some of its worst provisions.

The most evident feature of the AJA is that it is a combination of ill-conceived, disparate measures. The wandering quality of the bill makes it impossible to cover all of its silliness, but it is possible to focus on some of the core job provisions, all of which kill the very jobs that the AJA is supposed to create.

One does not have to dip very far into the bill to find trouble. Section 4 of the AJA imposes “Buy American” restrictions on the use of funds appropriated under this statute for work on public buildings. “[A]ll the iron, steel and manufactured goods” used on such projects are to be fabricated in the United States. There are obvious administrative difficulties in deciding what counts as a “manufactured good” for the purposes of the act. But don’t sweat the small stuff.

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President Obama has made a big deal out of corporate jets. Apparently they are a symbol not of success but of greed. Yet even as the private jet marked has lagged with the ongoing recession, President Obama’s own employees in his administration have significantly increased the number of limousines available for their travel.

The private jet market has historically risen in line with corporate profits, but started a steep downturn in 2008. The result was the loss of literally thousands of jobs in the factories that make private jets, with Cessna laying off almost 9000 workers alone, mostly in that notorious haunt of millionaires in Wichita, Kansas. Meanwhile, federal government departments increased the numbers of limousines bought in the first two years of the Obama administration by 73 percent, spending $1.9 billion on new cars in 2009 alone. These aren’t cheap autos, either. The most popular model is the Cadillac DTS, with the government paying about $60,000 per vehicle. Cadillac, of course, is part of the bailed-out General Motors.

This all confirms something I examine in my new book, Stealing You Blind: How Government Fatcats Are Getting Rich Off of You. When bureaucrats have taxpayer money to spend, they spend it on themselves. In Chapter Eight (“Municipal Madness”), for example, I detail how two departments (Public Works, and Transportation) of the City of Los Angeles received $111 million between them in stimulus money, and used it to ’save or create’ just 55 jobs, nearly all of them, apparently, in the public sector.

Another example comes in the increasingly risibly-named education sphere. As we all know, vast amounts of taxpayer money have been directed towards global warming research in the past few years. This has led, as we can see from numbers compiled by the Bureau of Labor Statistics, to a substantial increase in the salaries of “atmospheric, earth, marine and space science teachers” at public universities. In 2004, before the wave of public funding was unleashed following An Inconvenient Truth, such teachers were paid $53 an hour. Today they earn $70 an hour. On top of that, of course, they have tenure and enviable benefits, not to mention the shorter hours.

Indeed, government workers have made out like bandits while the rest of us eked out our living in the recession. According to USA Today, “When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.” That was in 2009, before the President announced his much-vaunted “federal pay freeze.”

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What do the London riots and the recent government crackdowns on Lemonade stands across America have in common? The answer is that in each case, government has done its best to control young people, to stop them engaging in enterprise. In Britain, the project is much more advanced. So if we want to know where the war on Lemonade selling ends up, we just have to look at the smashed windows and looted shops of Clapham Junction.

Let’s start in Britain so we can see where we’re going. The first thing to know is that government has removed the incentive to work. The British unemployment rate is currently 7.7%, yet there are over 100,000 households bringing in more than $37,000 annually in government handouts (the average household income in the UK). There are 650,000 households taking home more than $25,000 in these benefits.

That, however, is only part of the story. As that essential chronicler of British national demoralization, Theodore Dalrymple, said in the Wall Street Journal yesterday, employers are no longer interested in British youth:

But while the rioters have been maintained in a condition of near-permanent unemployment by government subvention augmented by criminal activity, Britain was importing labor to man its service industries. You can travel up and down the country and you can be sure that all the decent hotels and restaurants will be manned overwhelmingly by young foreigners; not a young Briton in sight (thank God).

The reason for this is clear: The young unemployed Britons not only have the wrong attitude to work, for example regarding fixed hours as a form of oppression, but they are also dramatically badly educated. Within six months of arrival in the country, the average young Pole speaks better, more cultivated English than they do.

The icing on the cake, as it were, is that social charges on labor and the minimum wage are so high that no employer can possibly extract from the young unemployed Briton anything like the value of what it costs to employ him. And thus we have the paradox of high youth unemployment at the very same time that we suck in young workers from abroad.

The role of the minimum wage is crucial. It is around $10 per hour (slightly lower for 18-20 year olds), much higher than the US minimum of $7.25. The difference is all the more important when one considers that the US has a higher average income (around $42,000 annually), meaning that British employers are being asked to pay (roughly) over half of average wage as a minimum rather than a third in the US.

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The Cost of Government Day Report, published annually by Americans for Tax Reform Foundation, measures the number of calendar days Americans must work to pay off spending and regulatory burdens at all levels of government. In 2011, Americans labored 224 days to pay Uncle Sam—until August 12. 77 days went solely towards paying off regulatory costs. These costs will only grow under the aggressive regulatory regime envisioned by the Obama Environmental Protection Agency (EPA). Coupled with the existing 77 day burden, proposed EPA regulations promise to increase the costs of electricity and household items for all Americans.

In a 2008 talk with the San Francisco Chronicle, then-Senator Obama boasted that his emission reduction plan would cause electricity prices to “necessarily skyrocket.” As President, Obama quickly pushed for higher energy prices through the American Clean Energy and Security Act of 2009, better known as “Cap and Trade.” While the Act did not pass the Senate, the 2009 Cost of Government Day Report estimated that Cap and Trade would have increased the Cost of Government by three additional days.

The failure of Cap and Trade to net legislative success inspired the Obama Administration to pivot to the EPA to pursue its environmental agenda. Enabled by unaccountable bureaucrats, the EPA enacts much more harm than the politically-conscious Congress could ever achieve.

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Winston Churchill warned; “An appeaser is one who feeds a crocodile, hoping it will eat him last”. Churchill would understand the dynamics of the European and American sovereign debt crisis. Modern warfare is not about a blitzkrieg of panzers, dive-bombers, and storm-troopers swarming across borders to over-whelm patriotic defenders. Today’s world dominators sucker their prey into financially destroying themselves from within. Once the quarry is crippled; the invader walks in and takes control of the victim’s economy on the cheap.

Recently bureaucrats from Austria; Belgium; Cyprus; Estonia; Finland; France; Greece; Ireland; Italy; Luxembourg; Malta; Netherlands; Portugal; Slovakia; Slovenia; and Spain quietly surrendered their sovereignty to Germany. In contrast, Americans stand alone as the only nation on earth in full rebellion against their government’s dangerous addiction to deficit spending.

Hitler slyly wrote: “How fortunate for governments that the people they administer don’t think.” Most Europeans did not question the too-good to-be-true claims of the euro when it was first introduced in 2002 as the continent’s common currency. Overnight, serial debt-defaulters were granted unlimited power to raise huge volumes of cheap capital in the untested euro-bond markets. Fans boasted the new currency created the largest economic trading group in the world; with 332 million direct users and another 175 million people worldwide who pegged their currency exchange rate to the euro.

Thomas Jefferson cautioned: “I believe that banking institutions are more dangerous to our liberties than standing armies”; but Europeans don’t study American history. Germans designed the euro to be dominated by the Frankfurt-based European Central Bank (ECB); who control all money printing and operate the eurozone electronic payment systems. Member central banks are allowed to sit on Eurosystem Board, but only as junior members. With their supremacy of ECB rule-making, Germans implemented banking regulations eliminating reserve requirements for loans to euro members; while increasing collateral requirements against loans to the private sector. Goldman Sachs and other camp followers gave the local banks access to derivatives; which allowed for astronomic leverage of euro member loans.

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Glenn Reynolds in today’s The Washington Examiner:

So the public employee unions have been on the defensive across the nation, and they’ve been losing battles in state capitols from Wisconsin, to Ohio, to Tennessee.

Although there have been some violent incidents and death threats, overall, despite the talk from many right-leaning pundits about “union goons,” the actual danger posed by the union members appears to have been very small by labor-historical standards. Apparently, you just can’t get good goons nowadays.

And that makes sense. In the old days of the labor movement, the unionized industries were, you know, actual industries, involving miners, steelworkers and the like. And those are trades that foster exactly the qualities you need in good goons.

Why? Because they’re very dangerous activities that put a premium on teamwork. (Even in totalitarian countries, people know that it’s dangerous to get the miners upset.)

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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.

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It’s easy to complain about the IRS, but more often than not the bureaucrats are simply carrying out the bad policies imposed by Congress. There certainly are some egregious cases of IRS abuse, but it’s typically the fault of lawmakers for enacting bad law.

But such is not the case with a regulation currently under consideration which would require that American banks put foreign tax law above U.S. tax law. The regulation deals with the obscure issue of reporting requirements for bank deposit interest paid to foreigners, but the economic impact would be significant. Worst of all, the IRS is seeking to overturn existing law. In some ways, this is the tax equivalent of the EPA’s notorious power grab scheme to impose cap-and-trade with regulatory edicts.

A bit of background. On January 7th, the IRS proposed this regulation (REG-146097-09) to force American financial institutions to report any interest payed to foreigners. Typically, U.S. tax authorities only require information used for U.S. tax purposes. And since Congress wants to attract this investment to the American economy, the law has clearly stated for 90 years that foreigners won’t get taxed, leaving no need to collect any information about this income. But now, as part of global efforts to undermine tax competition and usurp fiscal sovereignty, the IRS is unilaterally asserting the right to demand this information. Only it’s not to enforce American law, but in order to hand the information over to foreign governments so that they can tax this U.S.-source income.

There is good reason why investors would want to protect their personal information.

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The showdown in Wisconsin has generated competing claims about whether state and local government bureaucrats are paid too much or paid too little compared to their private sector counterparts.

The data on total compensation clearly show a big advantage for state and local bureaucrats, largely because of lavish benefits (which is the problem that  Governor Walker in Wisconsin is trying to fix). But the government unions argue that any advantage they receive disappears after the data is adjusted for factors such as education.

This is a fair point, so we need to find some objective measure that neutralizes all the possible differences. Fortunately, the Bureau of Labor Statistics has a Job Openings and Labor Turnover Survey, and this “JOLTS” data includes a measure of how often workers voluntarily leave job, and we can examine this data for different parts of the workforce.

Every labor economist, right or left, will agree that higher “quit rates” are much more likely in sectors that are underpaid and lower levels are much more likely in sectors where compensation is generous.

Not surprisingly, this data shows state and local bureaucrats are living on Easy Street. As the chart illustrates, private sector workers are more than three times as likely to quit their jobs.

This helps explain why the unions are treating the Wisconsin debate as if it was Custer’s Last Stand. The bureaucrats know they have comfortable sinecures and they are fighting to preserve their unfair privileges.

The only bit of semi-good news for Wisconsin taxpayers is that state and local bureaucrats are not as lavishly over-compensated as federal bureaucrats.

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What do you get when you mix bureaucrats with a bunch of adorable puppies?

In Kim Houghton’s case, you get a major First Amendment lawsuit.

Kim Houghton decided after a successful, 20-year career in advertising that she wanted more.  She wanted to realize her American Dream and become an entrepreneur in a business focused on dogs.

She had the gumption to quit her job and make her dream come true:  Wag More Dogs is a high-end canine daycare located next to a popular dog park in Arlington, Virginia.  Kim commissioned an outdoor mural on her wall that has cartoon dogs, bones and paw prints as a way to give something back to the park she’d frequented for years, and build up some good will for her new business.

The mural was a big hit.  After all, who doesn’t like puppies?   Things were smooth for a few months.

And then Arlington bureaucrats got involved.

Officials blocked Kim’s building permit and told her that she could not open unless she painted over the mural or covered it with a blue tarp.

Her crime?

Painting a piece of art that—in the eyes of government officials—had too strong a “relationship” to her business.

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I’m not a big fan of the Internal Revenue Service, but I try not to demonize the bureaucrats because politicians actually deserve most of the blame for America’s complex, unfair, and corrupt tax system. The IRS generally is in the unenviable position of simply trying to enforce very bad laws.

But sometimes the IRS runs amok and the agency deserves to be held in contempt by the American people

Let’s look at a grotesque example of IRS misbehavior. It deals with a seemingly arcane issue, but it has big implications for the US economy, the rule of law, and human rights.

On January 7, the tax-collection bureaucracy proposed a regulation that, if implemented, would force American financial institutions to put foreign tax law above US tax law. Banks would be required to report to the IRS any interest they pay to foreigners, but not so the US government can collect tax, but in order to let foreign governments tax this US-source income.

This isn’t the first time the IRS has tried to pull this stunt. At the very end of the Clinton years, the agency proposed a rule to do the same thing. But the bureaucrats were thwarted because of overwhelming opposition from Capitol Hill, the financial services industry, and public policy experts. There was near-unanimous agreement that it would be crazy to drive job-creating capital out of the US economy and there was also near-unanimous agreement that the IRS had no authority to impose a regulation that was completely inconsistent with the laws enacted by Congress.

But like a zombie, this IRS regulation has risen from the grave.

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Nationwide, government at every level is requiring more and more of the workforce to get its permission just to earn a living.

In the 1950s, only about 5 percent of the workforce needed a government license to do their job. Today, that number is over 30 percent.  And governments impose all kinds of other requirements that make it hard for would-be entrepreneurs to start and grow small businesses.

Entrepreneurs like Chuck, here:

Unemployment in the United States has now topped 9.5 percent for 14 straight months—the longest stretch since the Great Depression.  Nearly 14.8 million people were unemployed last month.

Consider the nation’s capital.

Year after year, Washington, D.C., is ranked the worst place in the United States to start a small business. How can the District change its ways to allow entrepreneurs to create more jobs and opportunity?

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55 years ago, Rosa Parks helped launch the modern civil rights movement.

Today, the government is bulldozing her old neighborhood.  Here’s the real kicker:  The homeowners are forced to pay the cost of demolition.

Nobel prize-winning libertarian economist F.A. Hayek famously wrote that “the great aim of the struggle for liberty has been equality before the law.”  There is no better example of this fundamental struggle than Rosa Parks, known today as The Mother of the Freedom Movement.

She refused to be treated as a second-class citizen.  But her hometown of Montgomery, Ala., segregated blacks on public transits.  Minorities were forced to sit in the back, forced to give up their seats to whites, and sometimes were left standing on the side of the road after paying their fare.  Rosa stood up to the Big Government Bullies and said enough is enough.  Her demand for equality before the law forever transformed America.

Rosa once said:

I would like to be remembered as a person who wanted to be free . . . so other people would be also free.

Indeed, she made the world a better place.  So how despicable is it that today officials in her old hometown are forcing people to give up their homes?  The government is tearing down houses against the property owners’ will and then sticking them with the bill.

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If government is serious about job creation, it should get out of the way of the entrepreneurs who actually create them.

That is the message of a new campaign launched this week by the Institute for Justice—the nation’s leading legal advocate for economic liberty. A series of studies called The Power of One Entrepreneur highlight the tremendous impact that a single entrepreneur can have on their family, employees, community, other entrepreneurs and beyond.

Consider Melony Armstrong of Tupelo, Mississippi.

Melony is an African hairbraider and a mother of four.  She is the owner of Naturally Speaking, a hairbraiding salon that serves her community and has employed dozens of women.  In addition, Melony has taught more than 125 individuals how to braid.

But before she could even open her doors, she had to battle through mountains of red tape. The state forced her to spend 300 hours in cosmetology classes.  And to teach others how to braid, she had to obtain a special license that required over 3,000 hours of additional classes.  Here’s the kicker:  In all of this government-mandating training, she received no actual instruction in hairbraiding.

In August 2004, Melony teamed up with the Institute for Justice to challenge these needless barriers that had the effect of keeping grassroots entrepreneurs just like her from being able to open their own businesses. Less than a year later, her case resulted in a new law that lifted the restrictions, paving the way for hairbraiding entrepreneurship throughout the state.

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The political process often resembles an unseemly racket as politicians take money from people who earn it and give it to another group in exchange for campaign cash and political support. The modern bureaucracy is a good example. Government workers have now become a cosseted elite, with generous pay, extravagent benefits, lavish pensions, and ironclad job security. In exchange for this privileged status, they reward the politicians with millions of dollars of support and a host of in-kind contributions.  I have documented many of these outrages in my “Taxpayers vs. Bureaucrats” series at the International Liberty blog. Well, now we have a video detailing how the government workforce has morphed into a fiscal nightmare for taxpayers.

There are three things in the video that deserve special emphasis. First, bureaucrats are vastly overpaid. The government data cited in the video show that total compensation for the federal civil service is twice as high, on average, as it is for workers in the productive sector of the economy. There are some bureaucrats who deserve above-average pay, such as scientists dealing with nuclear weapons, but it is outrageous that the average drone in the federal bureaucracy is getting twice as much compensation as the taxpayers (serfs) who pay their salaries.

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