Saturday, June 23, 2012

GOP Makes Little Progress In Curtailing Ridiculous Federal Employee Compensation

GOP Makes Little Progress In Curtailing Ridiculous Federal Employee Compensation
My hometown of Charleston is known as a beautiful, historic port city, but it's also a hotbed of military contractors. Some of the contractors in the area, such as General Dynamics, are mega-corporations who meet the world's insatiable demand for war machines. GD, for example, had a mind-blowing revenue of $32 billion in 2009! (Nearly as much as Microsoft.) Needless to say, these crown jewels of the military-industrial complex make some Charlestonians very, very wealthy.

Run-of-the-mill employees at these military contractors make a ton of money, too. But the amount they earn pales in comparison to out-of-whack federal compensation, which averages $126,000, including benefits. (See chart below.) USA Today ran a story in 2010 with the headline More Federal Workers' Pay Tops $150,000. In the article, Dennis Cauchon detailed the increasingly ridiculous take-home pay of federal workers:
The number of federal workers earning $150,000 or more a year has soared tenfold in the past five years and doubled since President Obama took office, a USA TODAY analysis finds.
According to the article, more than 82,000 federal workers earned more than $150K in 2010, a number as large as the population of a small city. Additionally, nearly 17,000 earned more than $180K. And these numbers didn't even take into consideration the Cadillac benefits and retirement plans federal workers receive!

After two years, one might think the Tea Party-elected, GOP-controlled House would have been able to make headway in getting federal compensation back in line with reality. But such is not the case. Outside of a couple of House plans to freeze salary increases (which could be nullified this year by way of an Obama executive order), zero progress has been made to reduce bloated federal compensation.

In the age of so-called "limited government" on the right (and even "fairness" and "equality" on the left), we shouldn't be seeing divergent wage trend lines like these:
(Source: CATO)

GOP Makes Little Progress In Curtailing Ridiculous Federal Employee Compensation - wages chart
GOP Makes Little Progress In Curtailing Ridiculous Federal Employee Compensation - total compensation chart

But notice the sharp uptick during the Bush/GOP-controlled Congress years. As you can clearly see, you can't trust the GOP to be fiscally conservative.

Thursday, June 21, 2012

A Real-Life Galt’s Gulch...In Honduras?

A Real-Life Galt’s Gulch...In Honduras?This story is a few months old, but it's new to me and warrants sharing. Peter Thiel's plan for an offshore libertarian colony may or may not come to fruition, but the Honduran government is actually pressing ahead with a plan to develop two libertarian microstates. From The Economist:
Now, for the first time, libertarians have a real chance to implement their ideas. In addition to a big special development region, the Honduran government intends to approve two smaller zones. And two libertarian-leaning start-ups have already signed a preliminary memorandum of understanding with the Honduran government to develop them.

One firm goes by the name of Future Cities Development Corporation. It was co-founded by Patri Friedman, a grandson of Milton Friedman, a Nobel laureate in economics, and until recently executive director of the Seasteading Institute, a group producing research on how to build ocean-based communes [with Peter Thiel -Seth]. The other is called Grupo Ciudades Libres (Free Cities Group) and is the brainchild of Michael Strong and Kevin Lyons, two entrepreneurs and libertarian activists.

Both share a purpose: to build “free cities”. Last April all three spoke at a conference organised by Universidad Francisco Marroquín, a libertarian outfit in Guatemala. In September they and Giancarlo Ibárgüen, the university’s president, launched the Free Cities Institute, a think-tank, to foster the cause.