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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If you allow the media to tell the story about Mitt Romney’s comment, “I like being able to fire people who provide services to me” you can easily be mislead that Romney is a emotionless, suit and tie wearing, profit hoarding CEO. On second thought, that last part may be entirely true. Aside from that, what’s even truer, and totally acceptable, is Romney’s attitude.

Yes, it is perfectly OK to fire someone if you are not satisfied with their performance or service, especially if you are the one forking over the dough. That is what makes a free market, capitalist system run in high gear. It feeds competition and pushes service providers to deliver the very best quality. Accountability is an important reason why free societies produce more than controlled societies. Moreover, it’s why many trust the private sector over government. This was precisely what Romney was referring to. Anyone who pays for a service ought to have the ability and right to terminate any agreement with a service provider if certain expectations are not met.

Answering a question about health care Monday morning, Mr. Romney said he would allow individuals to have their own insurance because it would provide the insurance company with an incentive to keep its clients healthy.“It also means that if you don’t like what they do, you can fire them,” Mr. Romney said. “I like being able to fire people who provide services to me.”

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According to the Institute for Truth in Accounting (IFTA), Connecticut has been identified as the top financial “sinkhole” state in the nation. IFTA, a nonpartisan and nonprofit organization that works for greater accounting transparency across all levels of government and business, reports that the Constitution state is at the top of a list of five states which are in the worst financial position. According to the organization’s Financial State of the States report, Connecticut has $29.4 billion worth of assets, but only $10.1 billion are available to pay $63.4 billion of bills as they come due. In addition, each Connecticut taxpayer’s financial burden is $41,200.

The report indicates that the other four states considered to be financial “sinkholes” are New Jersey, Illinois, Hawaii, and Kentucky, all of which have a per taxpayer burden of over $23,000. However, Wyoming, North Dakota, Nebraska, Utah and South Dakota are considered “Sunshine States” because either a per taxpayer’s surplus or nominal per taxpayer’s burden exists in these states.

Interestingly, Republican Gov. Dave Heineman of Nebraska, a “Sunshine State,” was invited to Hartford by Democratic and Working Families Party Governor, Dannel Malloy, of Connecticut for a regional economic summit in October. Gov. Heineman’s description of his success in bringing about the largest tax cut in his state’s history, and Nebraska’s 4.2% unemployment rate- the second lowest in the nation- drew a sharp contrast to Gov. Malloy’s explanation of his experience in “straigtening out the state’s finances” by enacting the largest tax increase in his state’s history.

“I believe we’re moving in the right direction,” Mr. Malloy said. “The reason I did what I did with respect to the budget was so that I could look business in the face and say, ‘Listen, I believe we’ve got the bulk of our problem behind us. We’ve balanced a budget. We’ve taken the steps necessary to wrestle a structural deficit to the ground and we move forward.’ ”

Sheila Weinberg, founder and CEO of IFTA, however, disagrees. Ms. Weinberg said that Connecticut’s “state officials say their budgets are balanced but do not include employee pension and healthcare obligations in their calculations.”

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Congressman Tom McClintock (R-CA) made the following statement to the House Chamber on October 26, 2011:

Mr. Speaker:  The government’s continuing failure to address our nation’s gut-wrenching unemployment stems from a fundamental disagreement over how jobs are created in the first place.  We are now in the third year of policies predicated on the assumption that government spending creates jobs. We have squandered three years and trillions of dollars of the nation’s wealth on such policies, and they have not worked because they cannot work.

Government cannot inject a single dollar into the economy until it has first taken that same dollar OUT of the economy. True, we can SEE the job that is saved or created when the government puts that dollar back into the economy.  What we can’t see as clearly are the jobs that are destroyed or prevented from forming because government has first taken that dollar OUT of the economy.  We see those millions of lost jobs in a chronic unemployment rate and a stagnating economy.

Government can transfer jobs from the productive sector to the government sector by taking money from one and giving it to the other.  That’s at the heart of the President’s plan to spend billions of dollars to hire more teachers and firefighters and police officers.  But these temporary government jobs come at a steep price: every dollar spent sustaining one of these jobs is a dollar taken from the same capital pool that would otherwise have been available to productive businesses to invest in creating permanent jobs.

Government can also transfer jobs from one business to another by taking capital from one and giving it the other. That’s how we got Solyndra.  We put a half-billion dollars at risk to create 1,100 jobs (that’s $450,000 per job).  Now that half-billion dollars are gone and so are the jobs.  And who pays for these losses?  Other businesses and their employees – meaning fewer jobs created.

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With Texas Governor Rick Perry now leading the race for the Republican nomination for President, only days after jumping into contest (according to Rasmussen Reports – full disclosure, I have endorsed Perry) – we can expect a withering response from President Obama and his allies on the left.  As John Podhoretz noted in Commentary, comparing Perry to Ronald Reagan, “The conservative boogeyman is back.”

Since the Republican Party’s natural constituency is conservative, more so in this tumultuous Tea Party era, most attacks on Perry will be from the right – the attacks from the left will come after Perry wins the nomination.  That the machinery of the left will aid in the early attacks from the right is a given; it’s all part of winning for them.
The Trans-Texas Corridor is one such emerging line of criticism against Gov. Perry.  First proposed by Perry in 2002, the north-south running road would have also included a railway, petroleum pipeline, power lines, and communications cables.

Some conservatives have linked the planned Texas road with the feared, but as yet theoretical, North American Union or NAU and NAFTA, dubbing it the NAFTA Super Highway.  That Perry would have proposed such a thing is yet more proof to them that Perry is somehow the “Establishment” candidate (never mind his comments about the Fed, the Tenth Amendment, and the fact that the same “Establishment” ran Sen. Kay Bailey Hutchison against him for governor last year).

So, what’s the deal with Perry’s proposed superhighway and should conservatives be worried?

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America’s Second City is now first in traffic congestion.

Recently, the Texas Transportation Institute named Chicago the nation’s most congested city, booting perennial congestion king Los Angeles from the dreaded top slot.

And if you think gridlock is bad now, just wait. Turns out Chicago’s official 25-year transportation plan will spend billions, but traffic congestion will get even worse.

Everyone knows that gridlock leads to wasted time and increased stress, but the effects of degraded mobility are worse than most people realize. Traffic congestion deprives job-seekers of opportunities, robs businesses of customers, and hastens the exodus of residents from the central city to the suburbs.

And although mounting gridlock may seem like the unavoidable result of increased population and strained budgets, the experience of nations from France to Australia proves otherwise. Reason Foundation draws on what’s worked worldwide and recommends a three-part plan:

1. Expand roads with underground tunnels and elevated structures.
2. Use pricing to keep traffic flowing.
3. Pay for new projects with private-sector financing instead of taxes.

That plan can help Chicago or any other city bust congestion and boost economic growth.

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I keep hearing the narrative that somehow, as though it were written in stone, collective bargaining is a right for public sector unions. I would disagree entirely: collective bargaining is a privilege, not a right, for public sector unions. And you know what? About 50 years ago, the A.F.L.-C.I.O. agreed with me. The union’s Executive Council in 1959 said: “In terms of accepted collective bargaining procedures, government workers have no right beyond the authority to petition Congress — a right available to every citizen.”

And it is a privilege that has been badly abused for years; U.S. Bureau of Labor statistics show that public sector employees, many of them unionized, make nearly $40 an hour in combined wages and benefits versus roughly $27.50 for those in the private sector.

So I applaud what Scott Walker is doing in Wisconsin, but I actually feel he didn’t go far enough. All his Budget Repair Bill is doing is addressing the public sector unions’ right to collectively bargain over pensions and health care. I think it would have been nice to address the right to collectively bargain for wages, and here’s why: at the end of the day, the public sector unions are not collectively bargaining for a greater share of earnings, as do the private sector unions. They are bargaining to get a bigger slice of the pie of tax dollars, which the government has taken from the American taxpayer.

Now to be clear: paying a certain amount of taxes is a part of being involved in an organized civilization. If you want to make sure you have roads and national defense, you’re going to have to pay taxes. But that being said, taxes are removed through a threat of force from the taxpayers by the government (yes, I mean force. Try not paying property or income taxes and see what happens). So the government is run off of money earned in the private sector. Government does not create jobs; when there are reports of more jobs, but they’re all government jobs, the government is not creating anything: it is merely funding even more government jobs off the backs of the private sector. Which compounds the problem because by taking capital from the private sector to create government jobs, you’re not creating jobs that create more capital, as private sector jobs do.

So, public sector unions, unlike their private sector union counterparts, are not creating more capital. Do they provide services for the public good? Absolutely. Are they creating capital? Absolutely not.

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The world is backwards. It should be the taxpayers striking in the streets of Wisconsin. But, private sector taxpayers can’t afford to take a day off, let alone a week. Doesn’t that say everything? Only government employees with their powerful unions, lifetime job security, short work-weeks, loads of sick days, nonstop holidays, early retirement, and bloated pensions, can afford to stand in the street protesting. Common sense tells us anyone with this much time to protest and the ability to abandon their work duties, is greatly overpaid.

It’s time for a reality check. These $100,000 per year teachers keep talking about “the kids.” Exactly who is teaching those kids while their teachers abandon their jobs and commit fraud with fake doctor’s notes? If they cared about the kids, they’d be in the classroom. They’d leave the striking and lobbying to their union leaders and lobbyists. It’s the students (and their parents) who should be on strike. Wisconsin teachers are the highest paid in the Midwest, but their students’ performance hasn’t improved. Where’s the taxpayer’s union? Where’s the students’ union? Are students and taxpayers getting their money’s worth? Perhaps they should be on strike.

I’m a small businessman. Like all private sector workers, I have no time to protest or strike. Take a day off? How could I do that? I run a business. People depend on me. I’m on call 24/7/365, weekends, holidays, birthdays and anniversaries. Vacations are “working vacations.” The phones never stop ringing, the emails never slow down. I have to work 16-hour days just to pay my taxes. Who benefits? Those government employees protesting in the streets of Wisconsin.

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All of my life I wanted to be an astronaut. I starting working in the Miami Planetarium at age 13; studied aeronautics and engineering and propulsion systems, and was stopped only by a 20/25 left eye during an exam for the US Air Force Academy. But space exploration has always been my primary passion.

Here is a video called THE FREE FRONTIER. You’re seeing it at Big Government because you will not find a cleaner contrast between what the government spends and wastes and ends up with, versus the almost mind-boggling results the private sector can achieve at a fraction — in some cases 4-5% — of the cost that you and I pay every day in the form of taxes.

My hope is that this video will give you hope.

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From The Economist:

Politicians have repeatedly given in, usually sneakily—by swelling pensions, adding yet more holidays or dropping reforms, rather than by increasing pay. This time they have to fight because they are so short of money. But it is crucial that the war with the public-sector unions is won in the right way. For amid all the pain ahead sits a huge opportunity—to redesign government. That means focusing on productivity and improving services, not just cutting costs. (Indeed, in some cases it may entail paying good people more; one reason why Singapore has arguably the best civil service in the world is that it pays some of them more than $2m a year.)

The immediate battle will be over benefits, not pay. Here the issue is parity. Holidays are often absurdly generous, but the real issue is pensions. Too many state workers can retire in their mid-50s on close to full pay. America’s states have as much as $5 trillion in unfunded pension liabilities. Historic liabilities have to be honoured (and properly accounted for, rather than hidden off the government’s balance-sheet). But there is no excuse for continuing them. Sixty-five should be a minimum age for retirement for people who spend their lives in classrooms and offices; and new civil servants should be switched to defined-contribution pensions.

Another battleground will be the unions’ legal privileges.

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The chart below (found also here), from Big Government contributor Veronique de Rugy clearly shows that federal employment has grown by 98,000 jobs since the start of the recession. This bears repeating, because lefty columnist Paul Krugman is furiously spinning that the increase in employment is due to Census hiring. Krugman:

But anyone paying attention knew why public employment had risen — and it had nothing to do with Big Government. It was, instead, the fact that the federal government had to hire a lot of temporary workers to carry out the 2010 Census — workers who have almost all left the payroll now that the Census is done.

Um, no.

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Woah! Radical AFL-CIO President Richard Trumka is calling for the left to take control over private industry.

Can we call them “socialists” yet?

“We need to fundamentally restructure our economy and re-establish popular control over the private corporations.”

The AFL-CIO blog reported:

With the economy continuing to stagger and job creation not moving quickly, “working people are justifiably angry and frustrated” as they approach the Nov. 2 elections, says AFL-CIO President Richard Trumka.

Trumka and Working America Executive Director Karen Nussbaum, New York Times columnist Bob Herbert, Eric Alterman, journalist and senior fellow at the Center for American Progress, and moderator Katrina vanden Heuvel, editor and publisher of the Nation, led a panel discussion—Which Way for the Working Class? Elections 2010 and Beyond—Friday afternoon in New York City.

More than 400 people attended the event at the Great Hall at Cooper Union.

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The bigger the corporation the easier it is to hide in a cubicle doing absolutely nothing. There are working people, whose entire job requires little more than taking a slip of paper out of one slot and sticking it into the next.  That’s why short quick recessions are good for the economy; when profit margins get narrower than a liberals mind, companies start looking  for useless jobs to cut. Several rounds of lay-offs later, the two slots are merged, and the sheet of paper goes directly from one slot into the next. The most successful companies today have eliminated unnecessary corporate luxuries like the slot guy.

This never happens in the Federal Government, because recessions never mean cutbacks in Federal Land. Since the Government trend is constantly on the growth side, people have been shuffling papers through the slots for years. In fact long chains of cubicles have grown all over Washington DC where dozens of people pass a single sheet of paper from cubicle to cubicle, before it moves into the next office where it goes through another cluster of cubicles.

The best example of this government inefficiency was discovered after the recent egg recall. A salmonella outbreak caused at least 1500 Americans to become sick before half a billion eggs were removed from store shelves. Americans screamed for more Federal oversight of the food industry.

In a surprising September 10^th Wall Stret journal article, we learned there was already plenty Federal oversight; it’s just that Federal oversight is remarkably incompetent. There were USDA workers watching the egg plant seven days a week.

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The near collapse of our financial institutions and the overall economy and the misguided notion that a few trillion dollars of additional federal spending would return us to prosperity moved us in early 2009 to suggest an alternate approach.  We proposed in an essay published in The American, the on-line journal of the American Enterprise Institute, a fifty percent tax credit up to a fixed limit for every taxpayer who purchased any consumer goods anywhere in the United States.

Our theory was that a robust economic recovery would be fueled by increased retail purchases, and that every dollar of cost to the treasury represented a prior retail purchase within the American economy. This, by definition, would have produced an immediate increase in revenues to our struggling business and manufacturing sectors.  That essay and the positive feedback it engendered provided the impetus for the establishment of the Of Thee I Sing 1776 website, the goal of which has been to produce weekly, timely, and hopefully, thought provoking essays.

This week we return to the subject of economic stimulus as more and more politicians from both sides of the aisle and columnists from left to right have pronounced the stimulus a disappointment, at best, and a disaster at worst.  More likely, given the nation’s accumulated debt, the latter may be the more apt description.

So is there a Plan B, so to speak, in the works?  The answer so far, based on bills recently considered and rejected by members of both parties in Congress, is that Mr. Obama would prefer to double down on the discredited Keynesian approach which didn’t work during the great depression and which failed miserably through the recently “ended” (at least by common definition) great recession.  Tell the 9.5% of the workforce who are still unemployed that the recession is over.  Tell that to those who have watched the average time the unemployed are out-of-work grow from six weeks to 12 weeks, to 25 weeks to 35 weeks.

The number of unemployed is essentially the same percentage of people who were unemployed before the Administration and the huge Democratic majority in Congress, in the name of “job creation”, started shoveling our tax money out the door (or as some might say burning it in a bonfire).  And just why won’t President Obama, Majority Leader Reid and Speaker Pelosi wake up and smell the fire that continues to burn?  The answer can be found in two very telling and, now, very familiar utterances of the president and his senior staff in the early days of the new Administration.  The president said he wanted to “fundamentally change America” and his chief of staff, Rahm Emanuel, when economic disaster was around the corner, famously said, “Never waste a crisis.”

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That sound you hear is the White House’s credibility bubble bursting. CBS reported last week that 74 percent of Americans believe the Obama stimulus either damaged the economy or had no effect.

The wisdom of the crowd turns out to be true.

The White House boasts that the $862 billion Stimulus is performing like a well-oiled machine, ensuring that 3.5 million jobs have been “created or saved” because of it. At $246, 285.71 per job, that’s a hefty claim were it true. Since February of 2009 the U.S. economy lost a net 2.35 million jobs.

What is true is that the administration’s confidence-crushing economic policies are, according to National Federation of Independent Business Chief Economist Bill Dunkelberg, “scaring us to death”. What’s happened here is that a White House sorely lacking in private-sector experience has, for almost two years now, been broadcasting a clear message: “Business: beware.”

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With a bad-blood, confidence-destroying battle royale going on between Team Obama and business, you would think a highly publicized White House jobs summit would have produced some kind of positive announcement that gives a nod to the business point of view.

After all, as part of his so-called “business charm offensive,” the president is arguing that “it’s the private sector that has always been the source of our job creation, our economic growth, and our prosperity; and it’s our businesses and workers who will take the reins of this recovery and lead us forward.”

He also says “the free market depends on a government that sets clear rules that ensure fair and honest competition,” and that “too much regulation or too much spending can stifle innovation, can hamper confidence and growth, and hurt business and families.”

But uncertainty over the regulatory-and-tax rules of the road is exactly what has buffaloed business and stifled the animal spirits that are so necessary for investment and job creation.

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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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During recessions, people lose their jobs,see their salaries reduced or frozen and find that life is harder than it used to be. Well, that’s if you work for the private sector. As I am mentioned here, since the beginning of the recession, the private sector have lost many jobs while the public sector managed to gain some. Also, data shows federal workers earned more money for occupations that exist both in government and the private sector, and that’s before  the value of health, pension and other benefits are included to the value of the compensation.

Today, I look at the increase in compensation during the recession between the private and the public sector. This chart above compares percent changes in public and private worker compensation within each of the five largest sectors in the United States during the 12 months ending March 2010. Compensation includes health and retirement benefits (roughly 30% of compensation), salary (roughly 70% of compensation), and legally required benefits such as payments for Social Security and Medicare.  The sectors examined here employ over 65 million workers, or nearly half of all employed Americans. These sectors are (in order from largest to smallest by total employment): Office and Administrative Support, Sales, Food Preparation and Service, Production, and Transportation and Material Moving.

Across the sectors examined, compensation costs in the private sector increased 1.78% from March 2009 to March 2010.  Public sector compensation increased by 8% more than its private counterpart at a level of 1.92%.

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After Republicans suffered consecutive bruising defeats in 2006 and 2008, boastful Democratic Congressional Campaign Committee officials warned that Republicans faced a difficult decision: Go along with the sweeping agenda of the new administration, or suffer the disastrous consequences of taking on an enormously popular president in the 2010 elections.

Perhaps the GOP of 2005 would have taken the bait and swallowed the administration’s bad medicine. After all, Republicans during that period were guilty of spending too much and growing government too much, both of which would become hallmarks of the February 2009 stimulus plan and the loaded agenda that would follow. That GOP became a bloated, go-along to get-along body that forgot how to lead. We blew it, and we were rightfully fired by our bosses – the American people.

But the GOP in the House today is different. Very different. Led by a new generation of young and energetic leaders, we are committed to restoring the public’s trust in our ability to lead as responsible adults.

Let’s take a look at the last 16 months.

In the face of one-party Democratic rule, House Republicans learned fairly quickly that an election won on ‘change’ would result in a far more intrusive and expensive government. At the time, many political pundits joined the chorus of Democrats who warned that House Republicans faced political suicide if they didn’t support the President’s signature inaugural initiative – his stimulus plan. Yet we decided to fight. And we fought hard. The reason we were able to credibly oppose such a popular President was because we presented a much more responsible approach that would have created twice the jobs at half the cost of the eventual stimulus law that has failed to deliver as promised. A 178-seat minority isn’t going to win many legislative battles in the House. But it did prove sufficient to offer a clear contrast and provide the first glimpse of a Republican Party that had returned to its fiscally conservative roots.

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There are two distinct sectors in the economy: the private sector and the government sector.  The private sector is the productive part of the economy.  Competition in the private sector promotes greater efficiency, productivity and innovation than the public, or government, sector is capable of.  Yet it is government employees who are the highest paid and have the most job security.  This helps explain why so many states are facing acute, budgetary crises.

A new report by Chris Edwards of the Cato Institute highlights the sharp disparity between public and private compensation.  Despite producing very little compared to their private counterparts, public sector employees of state and local governments averaged 45 percent more per hour in wages and benefits.  And because government never shrinks, public employees are “rarely terminated for cost-cutting or job performance reasons.”

\Unionization appears to be a factor in public sector pay.  With a few exceptions, Edwards shows that the states with the highest public pay advantage also have the highest share of union workers.  But whatever the cause may be, the excessive pension plans provided by states has placed taxpayers in a virtual stranglehold.  Unless cuts are made, they are the ones who will have to pony up to provide for public sector workers.

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