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The Grinches Who Stole Christmas

By on 12.13.11 @ 6:07AM

Essential holiday reading for anyone who’s had it up to here with thieving politicians and bureaucrats.

Two stellar books have been published this year examining the “Political Class,” that group of people which includes politicians and bureaucrats, but also and the businesses and labor unions that enable and benefit from them. They are Stealing You Blind: How Government Fat Cats Are Getting Rich Off of You by Iain Murray and Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison by Peter Schweizer. They make excellent books for Christmas even though they are far more likely to generate outrage than good cheer.

Murray’s book focuses largely on the bureaucracy and why they have become an increasing threat to our freedom and our pocketbooks. Bureaucrats have a huge incentive to increase costs. In government, a bureaucrat’s success — his pay raises and promotions — is determined not by solving problems but by finding more problems to justify ever larger budgets and staff.

Murray, a Brit by birth, saw this first hand when he went to work for the Department of Transport. “In government, performance is judged by increases in funding. The cost-cutting boss is viewed with suspicion, even outright hostility, by his peers, as letting his side down,” Murray, who works at the Competitive Enterprise Institute, writes.

The success that the political class has had is evidenced by the fact that the wealthiest Congressional District in America is not in Manhattan or Beverly Hills, but in Northern Virginia. It is Virginia’s 11th District, a suburb of Washington, D.C. that is home to many top-level federal workers. The district has a median household income of $80,397, nearly double the national average of almost $42,000. 

Bureaucrats are now paid, on average, more than the private sector, have top-notch health and retirement benefits, and virtually iron-clad job security. The justification for this is that such people are in “public service” and good wages and benefits are needed to attract good people. But it is a myth that so-called public servants are any less self-interested than anyone else. Indeed, they often serve themselves at the expense of the public.

Murray provides numerous examples, from the federal down to the local level. One agency that looks like a disaster waiting to happen is the Transportation Safety Administration. “TSA is a reactive security operation, always fighting the last battle. Yet it doesn’t even fight those battles particularly well,” Murray writes. Post 9/11, TSA failed to detect Richard Reid, the shoe bomber, and Umar Farouk, the underwear bomber, both of whom were fortunately subdued by passengers on their planes. But TSA’s failure means more inconvenience for passengers, as we now have to take off our shoes and go through either body-scan machines or pat downs on our private areas. Despite this, testing has found that TSA screeners may miss up to 60%-75% of simulated explosives. Testing at airports that employ private security companies perform much better, with a failure rate of 20 percent. The reason is that screeners from private companies “know they will be picked on with constant covert tests and are therefore ‘more suspicious.’”

TSA has grown into a 67,000-employee bureaucracy, and in February of this year the Obama administration gave TSA the right to unionize. A unionized TSA could mean even more headaches for travelers as unionized government employees are nearly impossible to fire and union contracts tend to favor pay scales based on seniority rather than performance. Some members of Congress have urged airports to take their “opt-out” option and hire private security firms. But that requires TSA approval, and like any bureaucracy protecting its turf, the agency has declared that “unless a clear and substantial advantage to do so emerges in the future, the requests will be denied.” TSA Administrator John Pistole has said that he doesn’t think there’s any advantage to private security firms.

On the local level, there is no better example in Murray’s book of the lengths to which a union will go to get its way than the Uniformed Sanitationmen’s Association in New York City. A major blizzard hit New York in December 2010. Wanting to send a message to the mayor about staff cutbacks and reduction in the ranks of supervisors, union heads told snow crews go slow in snow cleanup. Several neighborhoods such as Borough Park and Middle Village were targeted for poor snow removal since the residents there are wealthier and have more influence with their politicians. This may have led to the death of one three-year-old boy as the ambulance could not get to him in time. However, priority cleanup was given to the neighborhoods of agency heads and other city bigwigs.

Schweizer looks at another part of the political class: politicians and crony capitalists. Schweitzer, who works for the Hoover Institution, dubs this group “the Government Rich” for whom “insider deals, insider trading, and taxpayer money have become a pathway to wealth. They get to walk this exclusive pathway because they get to operate by a different set of rules from the rest of us. And they get to do this while they are working for us, in the name of the ‘public service.’”

Members of Congress are often privy to private information, such as the likelihood that a bill that impacts a particular industry will pass, or that the SEC will approve a merger, or which private companies are in trouble. They can turn this information into lucrative stock transactions. Studies have shown, for example, that members of Congress increased their net worth by 84 percent from 2004-2006, while the rest of America averaged about 20 percent. Another study found that the average hedge fund beats the market by 7-8 percent a year, while the average Senator beats it by 12 percent.

The two examples of this behavior that have received the most press attention upon the release of Throw Them All Out are Republican Spencer Bachus, now chairman of the House Financial Services Committee, and Nancy Pelosi, House minority leader. During 2008, Bachus was ranking member of the Committee. Since all of the bailout legislation had to pass through his committee, he was intricately involved in discussions regarding which financial institutions were in trouble and the likely impact on the economy. According to Schweizer, Bachus used his inside information to make thousands on stock options, betting that stocks would go up or down at various times. 

A good reason to read Throw Them All Out is to arm yourself against the distortions about the book promulgated by various media outlets. To his credit, 60 Minutes correspondent Steve Kroft reported on Schweizer’s finding that in 2008 Pelosi was able to buy VISA stock at its initial public offering (IPO) while credit card legislation that was troublesome to VISA was making its way to the House floor. Pelosi delayed the legislation so that it would not come up for a vote on the House floor in 2008.

George Zornick at the Nation was eager to obfuscate the matter in Pelosi’s favor:

But this version of events leaves out a lot of key facts: that bill did pass through a House committee, on the very last day of votes before the House adjourned for the November elections. Kroft is heavily suggesting that Pelosi didn’t bring the bill to the floor so that she might profit on her newly acquired stock, but doesn’t mention that there was no time left to do so and that a new Congress was soon to arrive in Washington that January anyhow. Kroft also doesn’t mention that the new Congress, with Pelosi leading the House, passed the Dodd-Frank financial reforms which were deeply opposed by credit card companies, and that before she bought her stock, she helped pass the Credit Cardholders’ Bill of Rights, which was also opposed by the industry.

For anyone that knows Pelosi’s tenure as a Congressional leader, it’s near laughable to believe that she was helping Visa so that she could profit on a relatively small stock purchase — it just doesn’t fit with the reality of her legislative record. And as many liberal blogs were quick to point out, Kroft admits he based his story on a book by Peter Schweizer, a conservative think tank staffer who has worked for George W. Bush, Glenn Beck and Sarah Palin, and who has lobbed completely baseless charges at Pelosi before.

Page: 1 2  

About the Author

David Hogberg is a senior fellow at the National Center for Public Policy Research. Follow him on Twitter.

Letter to the Editor View all comments (26) |

Peppermint Tea| 12.13.11 @ 10:03AM

Am I living in a twilight zone world where I'm the only comment left alive? Where are you Jack in Wi? Margie? Grymlk? Canuckistani? even Purpleguy and Brooks? Ret Marine? I feel like the Omega Man.

Moe Blotz| 12.13.11 @ 10:31AM

Oy PT,for two days the rest of us peons have not had a "submit" button available to post comments. Yesterday and this morning I was able to review my comments, but could not submit them for viewing. Perhaps my two inquiries to editor@spectator.org have born fruit, but I still do not know what the problem was. Mr.Terrell may explain later.

russel| 12.13.11 @ 10:50AM

Mine's been messing up too . I wouldn't put it past the socialists' to begin hacking conservative sites fast and furious this election year .

Teaghan| 12.13.11 @ 12:32PM

I could comment but couldn't see your comments. They will get it straight soon, I'm sure. Right AS?

Melvin| 12.13.11 @ 11:30AM

Janet Reno had her secret police pick them all up last night. I suppose they will be taken to the various secret reeducation centers located around the Country.
Ret Marine wanted to go to GITMO because of the warm weather, and because the fishing is good. Apparently he got into an argument with the TSA and they put a pink snow-bunny outfit on him so that he could be easily identified and was shipped off to Maine.
Alas I fear for they're safety, they might not be the same when they return from the indoctrination centers.

SUBVET| 12.13.11 @ 11:53AM

TSA = FEMA CAMPS

Tea ......where are your friends...baned from the site right........TLP.

goldwater girl| 12.13.11 @ 10:28AM

Maybe Obama thugs have rounded them up for making negative comments about the administration

Oldefarte| 12.13.11 @ 12:19PM

And the sad fact of these type situations is that the American taxpayer is TAKING IT UP THE ANUL CAVITY with each one of these politically crony-capitalistic dealings!!!!!!!!

benedict infidel| 12.13.11 @ 12:22PM

ha ha .... i reported all of you racist, xenophobic, psuedo-intellectual, neo-con, spectator reading infidels to "attack watch" ! comment here and you may be disappeared ! allahu barackbar !

Mrs.Vito| 12.13.11 @ 2:06PM

Allah took them and left you! Now who sucks??!!

Cicero| 12.13.11 @ 2:24PM

The great Julius Ceasar plundered Gaul to buy election as the leader of Rome. Our politicos plunder us to buy election to Congress. Great country, this America.

daddio| 12.14.11 @ 7:27AM

It just proves that nothing changes really. Absolute power corrupts absolutely. Drain the swamp all you like, but it will get filled up again with new critters.

PaulyD| 12.13.11 @ 2:28PM

What Pelosi did was the same thing that sent Martha Stewart to Prison.

Oldefarte| 12.13.11 @ 10:21PM

At least in Stewert's case, they imprisoned someone with BRAINS!!!!!!

Pat| 12.13.11 @ 3:33PM

If you’re into rug biting frustration, buy these books but most of us already realize our politicians are hopelessly corrupt. They - our elected ones - don’t see it that way of course and over the past few decades they’ve worked very hard to legislate activities most of us would call “stealing” into activities they refer to as “perfectly legal”. And, even though it’s a taboo subject during Freshman orientation, our elected employees have developed some simple rules to stay out of Club Fed while still making those monthly lease payments on the Jag and the Mercedes. First rule: Don’t be too greedy every single time, there’s plenty of taxpayer money flowing through D. C., so just take a modest bite as each spending bill floats by. Emulate the Mama Grizzly, you swat a salmon out of the river, you eat it, you go back for one more. But you can’t eat every salmon swimming by during the yearly spawn, so don’t even try.

You can easily work the system so you or your relatives benefit financially, but don’t be arrogant. Your best defense is to pretend you didn’t know you were benefitting, don an expression of puzzled innocence if anyone in the media should ask about one of your backroom deals. Never say: “No Comment”, it sends the media into a feeding frenzy. The mainstream media is your friend and wants a reason to look the other way, but you have to learn your lines and practice your facial expressions.

Lastly, spread the wealth around, those who can help you deserve their kickbacks, the big money contributors get the most “help”, but your second tier supporters deserve at least an invite to a victory celebration and 5 minutes rubbing elbows with the High and the Mighty - they enjoy feeling important and it shouldn’t cost you a single penny out of your cut. Follow these simple rules and you can have a long and lucrative career as a humble public servant – what a glorious country we live in.

russel| 12.13.11 @ 6:55PM

Pat , thanks for spending the time writing . I could not have said it better and I agree 100%. A sorry state of affairs when we have to strategeorize on how we can get rid of some corruptocrat . Our Founders almost had it dialed - they just didn't figure in just how low a Sapien - Politico could go .

Pat| 12.13.11 @ 7:46PM

russel: Sapien-politico and corruptocrat, had to laugh and you certainly know how to coin a phrase.

daddio| 12.14.11 @ 7:29AM

Al Capone would be right at home in our current situation.

Naturalborn Texicanette| 12.13.11 @ 7:29PM

So very good to see/read ALL of you again!!!
I missed each and every one of you!!!!!!!

RSS Ronald Reagan | 12.13.11 @ 9:24PM

"TSA Administrator John Pistole has said that he doesn't think there's any advantage to private security firms."

Really? The 60-70 % fail rate at simulated bomb detection (as opposed to the 20% rate among private screeners) doesn't indicate any advantage to private firms?

daddio| 12.14.11 @ 7:30AM

either ratio is too high for me. It's one reason I do not fly.

POST American| 12.13.11 @ 10:40PM

----And even now, the MASS is, again,
X-ing itself while the REAL spirit of the hoiday goes begging.

Observe, nowhere in our long infiltrated,
utterly compliant 'Christian' establishment,
is there a peep about standing down on
the wampum-ization of ths holiday.
Refusing to do the Pavolian slave good
rewards number.

NONE.

We might suggest you spare the X-pence
of slave goods from RED China, bought in
bin op franchises under CCTV surveillance
and HD mind control screens.

INSTEAD---USE the money for a banquet for friends and family.

ALSO, charity should be administered
NOT through the usual bloated, utterly
corrupt EUGENICS foundations and
fronts ---but personally, by you, wherever --on the scene.

IF you want to give to faraway horror
scenes, use the net to get in touch with
REAL people on the scene. ASK them
what they need. Get the money and
assistance DIRECTLY to them.

-------------------THIS WE CAN DO--------------------

markenoff| 12.14.11 @ 12:35AM

The reason liberals believe the "1%" have gotten their wealth illegitimately is because that is the way liberals get their wealth. Simple projection.

daddio| 12.14.11 @ 7:30AM

+1

TrueBlue| 12.14.11 @ 1:36PM

Standard liberal tactic, blame the other side for what you're doing so nobody will believe it when they point back and say, "You're the one doing that!" The first person to point blame nearly always ends up blameless in the public eye, no matter how much evidence to the contrary.

Buffalo| 12.16.11 @ 6:48PM

I worked for DoD (NAVY) for 42 years. Here's some info I've sent other civil service bashers.

It is with extreme dismay that I have heard of plans to freeze federal salaries for X# years and/or cut their pay. Yet federal contractors will get raises even though their pay already exceeds federal pay for equivalent jobs in the same area. Freezing pay for X# yrs even though property & state taxes, food, gas, and all other expenses are increasing at an ever faster rate is an abominable way to treat employees. Eliminate Departments and Agencies to save the money but then treat your remaining employees decently!!! Congress needs to do an “Undercover Boss” episode. I am a retired (conservative, Tea Party member) federal employee whose 42 yr career was in test and evaluation of Navy aircraft and weapons systems. Believe me, DoD Feds are NOT OVERPAID!!!!

Comparing average federal salaries to the average US salary is comparing apples to oranges. The Navy organization I worked for has virtually no government public works personnel (gardeners, janitors, building maintenance, etc.) except for contract administrators. Most government technicians are gone. Government supply department personnel (warehouse workers, etc.) are mostly gone. There are no government fast food or cafeteria workers. They have eliminated virtually all government secretarial and administrative support positions - like the aforementioned jobs, almost all have been contracted out. I also believe that studies have proved contracting out to be a false savings as after the initial low-bid contact that beat out civil service costs the new contracts rise faster than civil service costs would have. We also have no salesmen or sales clerks like the rest of the US. We've necked down to almost all highly specialized, technically degreed personnel and a high percentage of those personnel have advanced degrees. This greatly exceeds the “average US” education, experience, and ease of replacement. I have a feeling those agencies whose salaries fall outside the "standard" civil service pay schedule (such as Fannie May, Freddy Mac, the SEC, and the Federal Reserve) are a major contributor to the perceived pay imbalance. Their similar jobs in the "average US" pay as much or more only as they're a much smaller percentage of the "average US" they don't impact the "average US" as much. The Heritage numbers are extremely biased, they're presenting the data so as to draw a false conclusion in a manner similar to the way Al Gore treats "global warming" data (and I have an email response from Heritage admitting such).

I am a retired federal employee whose career was in test and evaluation of Navy aircraft and weapons systems. A large number of my co-workers left over the years for industry at a 20-30% pay raise (for less responsibility) or more. One left for a 25% raise, I got his job (lead engineer for an aircraft T&E program) at his old salary, and he became a contractor on the program with a fraction of the responsibilities (data analyst). In 2009 I (as a program manager) had to pay $10,000/week/person (their approved rates which I couldn't change) for support from a prime contractor to fix the mistakes they made in their product (which incensed me). The contract was written before I got the job (and their contracts people always seem to outsmart ours). Our people developed as many fixes as they did. The company got/gets paid that $520K per manyear fixing something that never should have been delivered in the first place! And by the way, we found (find) lots of major mistakes in the aircraft and weapons systems the contractors sell us which supposedly are ready for the fleet yet their pay and benefits greatly exceeds ours.

Federal Civil Service employees and retirees pay 25% of their health insurance costs and most plans carry considerable copays for visits, hospital care, and medicine, unlike most state and local government or union employees. Due to Obamacare, I’m paying 10% more per month for my HMO insurance and 20%+ for copays in 2011. I also paid 7% of my salary towards my pension (old plan (CSRS)). I am not eligible for Social Security (I only had 8 quarters) nor do I get spousal Social Security (which I could get had I not worked for the US but spent my time in a bar drinking beer and watching TV). I paid for my life insurance (although it was a group policy which helped costs) while major companies gave it to their employees for free. I’m not complaining about Federal benefits (which I believe are reasonable for an employee of a major organization), but most non-federal union employees contribute much less for the same or better benefits – except for leave. And my retirement plan is in excellent fiscal shape as opposed to those other plans.

I will admit some of the reasons I stayed included job security (which no longer exists), the pension (I worked till over age 63 with just short of 42 years in although I could have retired at 55) (and which has been changed for new employees), but most of all the job(s) that I had over the years (the test pilots and the future astronauts I worked with, the technology (unbelievable!), etc.). So I stayed and willingly and knowingly accepted LESS pay than the contractors got. I felt that what I was doing was vital to the security of the US, was constitutionally valid, and was personally rewarding on many levels (not including pay). There are many, many things wrong with federal service, but the pay for technically degreed DoD personnel is not one of them.

So why do so many people want to cut or freeze DoD salaries (among others)? Conservatives that are fixated on federal salaries need to stop the class warfare and demagoguery – we complain when the Democrats do it. Please think - don't just blindly accept numbers from people who know the results they want (on both sides) without researching the facts and methodology.

You want to save federal costs? Eliminate the EPA and DoE (really the Department of Non-Energy). That'd give both a major savings in federal costs and a major boost to the economy. Eliminate the Education, Labor, and Housing and Urban Development Departments. Go to a flat tax or, preferably, the Fairtax and eliminate 90% of the IRS. Cain’s 9-9-9 plan has good ideas (although the FairTax is the best).

Any proposed across the board federal pay cut or freeze is poorly conceived and wrong.

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