8 June 2010
Today’s Tabbloid
PERSONAL NEWS FOR craig.kirchoff+webnews@gmail.com
FISCALLY CONSERVATIVE BLOG FEEDS
Overpaid Federal Workers [Cato
at Liberty]
JUN 07, 2010 07:31P.M.
By Chris Edwards
I posted an essay on federal worker pay over at
downsizinggovernment.org. The essay gathers together ideas and data
from my recent blogs on the topic.
As I’ve noted, the average compensation of federal civilian workers in
2008 was $120,000 a year, which strikes most people as rather high.
Defenders of the current system argue that the generous pay is deserved
because the federal government has a unique high-end workforce.
But consider some ordinary and mundane offices in the U.S. Department
of Agriculture, which I happened to be looking at the other day:
• The USDA’s Office of Communications employs 77 people and will
pay $9 million in wages and benefits this year. That works out to
$117,000 each for these public relations workers, which is close to
the overall federal compensation average.
• Similarly, the 62 employees of the USDA’s Office of Chief
Economist will earn an average $177,000 each in wages and
benefits this year, which is far higher than the federal average.
Apparently, it isn’t just rocket scientists that are earning high levels of
federal compensation, it is also workers in many run-of-the-mill
bureaucratic jobs.
(Data for fiscal 2010 from the appendix of the 2011 federal budget, pages
68 and 72).
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FISCALLY CONSERVATIVE BLOG FEEDS
The Obama Labor Market [Cato
at Liberty]
JUN 07, 2010 07:01P.M.
By Mark A. Calabria
In a recent speech on the economy at Carnegie Mellon, President Obama
took great pains to remind us that he inherited an economy that was
“shrinking at an alarming rate.” Of course his implication was that
everything wrong with the economy today is George Bush’s fault. While
Bush does deserve considerable blame for current recess, a new working
paper by economists at the University of Michigan and the New York and
San Francisco Federal Reserve Banks paints a picture of a recession that
was on par with previous deep recessions until well into 2009, when the
labor market started to deviate, for the worst, from past trends.
For instance the authors find that during the first part of the current
recession, labor force participation remained high, despite increasing
unemployment, yet starting in May 2009 the labor force participation
rate fell at its steepest rate since the 1950s.
The authors also focus on what economists call “Okun’s Law” – which
shows a relationship between GDP growth and employment. Historically
that Okun’s Law has shown that for every 2% GDP falls below trend,
unemployment increases about 1 percent. Under the Bush half of this
recession, that historical relationship continued to hold. Yet under
Obama it broke down, and not in a good way.
The paper also examines the relationship between unemployment and
posted job vacancies, called the “Beveridge curve” by economists. They
also find that the Obama economy has been far outside of this historical
relationship, so growth in vacancies but little improvement in the
unemployment numbers.
Most the paper offers a description of recent labor market trends,
without being able to completely explain why current trends have been
so different (and worse) than previous recessions. They do calculate that
the extensions in unemployment insurance have likely increased
unemployment by between 0.7 and 1.8 percentage points.
The real story, however, which this working paper misses is that in the
Obama economy, massive uncertainty coming from Washington and the
increasingly intrusive natural of government is keeping employers on the
sidelines, even when they are expanding output. President Obama needs
to get past the blame game and start moving us back toward a country
Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+webnews@gmail.com 8 June 2010

that rewards private enterprise and values free markets. disciplined… for being intoxicated.

I suspect that if your average citizen had defended his significant other’s
honor with a dozen or so bullets, he would be in jail. Not so for the
FISCALLY CONSERVATIVE BLOG FEEDS officer, who remains on administrative leave.

Taiwan Cuts Its Corporate Tax Of course, anyone recording the exchange that led to the shooting could
be prosecuted for a felony under Maryland’s wiretapping law. Just ask
Rate [The Club for Growth] Anthony Graber.
JUN 07, 2010 05:00P.M.

Taiwan has cut its top corporate tax rate from 20 percent to 17 percent.
or Taiwan where it is less than half of that? FISCALLY CONSERVATIVE BLOG FEEDS

Taiwan Cuts Corporate Taxes

FISCALLY CONSERVATIVE BLOG FEEDS [Cato at Liberty]
JUN 07, 2010 01:26P.M.
Super Tuesday is Tomorrow: Do
By Chris Edwards
You Know Which Candidates
From the subscription magazine Tax Notes today:
Have Promised Not to Raise
Taiwan’s Legislative Yuan (parliament), in an attempt to
Your Taxes? [Americans for Tax attract foreign investors, on May 28 passed legislation cutting
the island’s corporate tax rate from 20 percent to 17 percent,
Reform] retroactive to January 1…
JUN 07, 2010 03:56P.M.
The lower corporate tax rate will make Taiwan more
Voters in ten states head to the polls tomorrow to pick their respective competitive with its East Asian rivals Singapore, whose rate is
candidates for November. As we do for every primary, Americans for Tax also 17 percent, and Hong Kong, whose rate remains slightly
Reform would like to highlight those candidates that ... lower at 16.5 percent.

The reduced rate ‘will make us even more competitive and

will help attract international businesses to set up their
FISCALLY CONSERVATIVE BLOG FEEDS headquarters in Taiwan. We believe we’ll see the positive
results in the next several years,’ lawmaker Alex Fei of the
Baltimore Police Officer Fires 13 ruling Kuomintang.

Shots, Kills Unarmed Man [Cato If you were the CEO of an international company that made
semiconductor chips, laptops, or other manufactured products, would
at Liberty] you locate your next plant in the United States — where the corporate
JUN 07, 2010 03:44P.M. rate is about 40% — or Taiwan where it is less than half of that?

By David Rittgers
An off-duty Baltimore police officer and a former Marine had a
disagreement about the Marine’s advances toward the officer’s girlfriend.
The officer ended it with thirteen rounds fired from his service pistol, six
hitting the Marine and killing him. Baltimore police have confirmed that
the Marine was unarmed. The officer refused a breathalyzer at the scene.
(HT Instapundit)
Companies build new factories, buy machines, and hire workers in order
to earn after-tax profits. Our government swipes twice as much of those
profits as the Taiwanese government, so our economy obviously gets
fewer factories and machines and lower wages than otherwise.
The global business environment is changing, and we need to change
with it. I’m not sure why that is so hard for U.S. policymakers
to understand.

It gets better. The officer was involved in another shooting five years ago, See here for corporate effective tax rates around the world.
which was determined to have been justified, but the officer was

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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+webnews@gmail.com 8 June 2010

Buy this book to read about the global tax revolution. FISCALLY CONSERVATIVE BLOG FEEDS

Sonny Perdue Should Bring

FISCALLY CONSERVATIVE BLOG FEEDS Zero-Base Budgeting to Georgia
Vote on EPA Resolution of [Americans for Tax Reform]
JUN 07, 2010 12:54P.M.
Disapproval This Week - Call
ATR’s relationship with GA Gov. Sonny Perdue has certainly been a
Your Senator [Americans for tenuous one on the past. We fought with him over the hospital bed tax
and won, but not after a long, protracted battle with a g...
Tax Reform]
JUN 07, 2010 01:19P.M.

This Thursday, June 10th the Senate will take up Sen. Murkowski’s EPA
Resolution of Disapproval (SJ Res 26) under a consent agreement that
was reached before the recess. There wil...
FISCALLY CONSERVATIVE BLOG FEEDS
ATR to Jersey Legislature:
Uphold Christie’s Tax Hike Veto
[Americans for Tax Reform]
JUN 07, 2010 01:08P.M.
Last month, NJ Gov. Chris Christie put his money where his mouth is.
After the legislature passed a $1 billion tax increase, it took the governor
less than two minutes to veto. But some Democra...
FISCALLY CONSERVATIVE BLOG FEEDS
The Sleazy Combination of Big
Business and Big Government
[Cato at Liberty]
JUN 07, 2010 12:48P.M.
By Daniel J. Mitchell
There’s an article today in the Wall Street Journal showing how already-
established companies and their union allies will use the coercive power
of government to thwart competition. The article specifically discusses
efforts by less competitive supermarkets to block new Wal-Mart stores.
Not that Wal-Mart can complain too vociferously. After all, this is the
company that endorsed a key provision of Obamacare in hopes its
hurting lower-cost competitors. The moral of the story is that whenever
big business and big government get in bed together, you can be sure the
outcome almost always is bad for taxpayers and consumers.

FISCALLY CONSERVATIVE BLOG FEEDS A grocery chain with nine stores in the area had hired Saint
Consulting Group to secretly run the
Daily Media Spotlight June 7, antidevelopment campaign. Saint is a specialist at fighting
proposed Wal-Marts, and it uses tactics it describes as “black
2010 [Americans for Tax arts.” As Wal-Mart Stores Inc. has grown into the largest
grocery seller in the U.S., similar battles have played out in
Reform] hundreds of towns like Mundelein. Local activists and union
JUN 07, 2010 01:05P.M. groups have been the public face of much of the resistance.
But in scores of cases, large supermarket chains including
In a blog post for National Journal, Grover expresses how he would like Supervalu Inc., Safeway Inc. and Ahold NV have retained
the federal government and leaders of foreign nations to, “explain how Saint Consulting to block Wal-Mart, according to hundreds of
taking one dollar— through taxation or debt— f... pages of Saint documents reviewed by The Wall Street
Journal and interviews with former employees.
…Supermarkets that have funded campaigns to stop Wal-
Mart are concerned about having to match the retailing
giant’s low prices lest they lose market share. …In many
cases, the pitched battles have more than doubled the amount
of time it takes Wal-Mart to open a store, says a person close
to the company. … For the typical anti-Wal-Mart assignment,

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Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+webnews@gmail.com 8 June 2010

a Saint manager will drop into town using an assumed name charade” that the confirmation process had become and demanded that
to create or take control of local opposition, according to both senators and judicial nominees engage in more substantive
former Saint employees. They flood local politicians with discussions. Let’s see if the Kagan hearings meet that Kagan standard.
calls, using multiple phones to make it appear that the calls
are coming from different people, the former employees say.
…Former Saint workers say the union sometimes pays a
portion of Saint’s fees. “The work we’ve funded Saint to do to FISCALLY CONSERVATIVE BLOG FEEDS
preserve our market share and our jobs is within our First
Amendment rights,” says Jill Cashen, spokeswoman for the Headline of the Day [The Club
United Food and Commercial Workers Union. Safeway
declined to comment. …Mr. Saint says there is nothing illegal for Growth]
about a company trying to derail a competitor’s project. JUN 07, 2010 11:37A.M.
Companies have legal protection under the First Amendment
for using a government or legal process to thwart From an unlikely source,
competition, even if they do so secretly, he says.

FISCALLY CONSERVATIVE BLOG FEEDS

FISCALLY CONSERVATIVE BLOG FEEDS
Angle Has Strong Lead in New
FLASH: Liberal White House
Poll [The Club for Growth]
Nominates Liberal Judge! [Cato JUN 07, 2010 09:55A.M.

at Liberty]
JUN 07, 2010 12:22P.M.
By Ilya Shapiro
From the first round of Clinton Library documents regarding Elena
Kagan’s White House service, we can now all be shocked – shocked! –
that President Obama’s Supreme Court nominee is a liberal. It’s a
mystery why the punditocracy thought someone who despaired at
Ronald Reagan’s election, staffed the Michael Dukakis campaign, clerked
for Thurgood Marshall, and advised Bill Clinton would be anything else.
But this is what passes for news in Washington these days.
We already knew that the solicitor general was a genial but cautious
careerist, rarely expressing her own opinions but forever strategizing
over the next rung on the ladder that would take her to her high school
dream of sitting on the Supreme Court. And we knew that she was a
moderate legal academic – meaning she sits comfortably to the left of the
country as a whole. Well, now we know that Kagan is a technocrat who is
for abortion rights, affirmative action, and campaign finance regulations,
but against guns.
Some conservatives may see this as an “a-ha” moment, and rabid
progressives may be breathing a sigh of relief. But really these so-called
revelations are not going to change the story, either in terms of the final
confirmation vote or in the court of public opinion.
From the Las Vegas Review-Journal: Continuing her stunning rise,
Sharron Angle has shot into a clear lead in the U.S. Senate Republican
primary, according to a new poll for the Las Vegas Review-Journal that
shows the Tea Party favorite heading toward likely victory Tuesday. [...]
S COMMITTEE. 202-955-5500.
FISCALLY CONSERVATIVE BLOG FEEDS
Why We Need Fewer Public
School Jobs, Not More [Cato at
Liberty]
JUN 07, 2010 08:28A.M.
By Andrew J. Coulson
That’s the topic of a commentary I just wrote at BigGovernment.com,
tied to recent efforts to prop up public school employment with another
$23 billion bailout. I won’t repeat the text of that post here, but thought
the two charts bear repeating. The first shows that employment has
grown 10 times faster than enrollment over the past 40 years.

What the media should be asking, and what the American people deserve
to know, is how Kagan views the Constitution – especially what limits it
places on an out-of-control federal government. In a prophetic 1995
book review, the nominee expressed frustration at the “vapid and hollow

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The second chart shows how the total cost of sending a single child
through the public school system has changed over the years, along with
trends in student achievement.
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8 June 2010
FISCALLY CONSERVATIVE BLOG FEEDS
Dartmouth Withstands the
NYT, but the Left Cannot
Withstand Dartmouth [Cato at
Liberty]
JUN 07, 2010 08:20A.M.
By Michael F. Cannon
Research by scholars at Dartmouth Medical School suggests that
Americans waste gobs of money on medical care. Last week, The New
York Times ran a fairly lame critique of the Dartmouth research, by Reed
Abelson and Gardiner Harris. Kate Steadman of Kaiser Health News
provides a good synopsis of expert reaction to the story and writes,
“Conservative and libertarian health policy bloggers were largely silent,
ignoring the debate.” Although this libertarian wasn’t exactly ignoring
the debate, the categorization is largely fair. More about that in a
moment.
Abelson and Harris’s portrayal of the Dartmouth research is completely
at odds with my understanding of it.
Credit: www.dartmouthatlas.org
Decades ago, Dartmouth researchers stumbled across what may be the
best method of detecting wasteful spending in an economic sector as
complicated as medicine. They noticed that patients in some areas
consume a lot more medical care than patients in other areas — more
office visits (to specialists in particular), more diagnostic tests, more
procedures, more hospitalizations, et cetera. And they began to question
whether the patients who consume more care actually benefit from that
additional care. They have therefore spent the past few decades
measuring both geographic variation in medical consumption, as well as
any benefits for which they can find data. Do patients in high-spending
areas start out sicker than patients in low-spending areas? Do they end
Today’s Tabbloid PERSONAL NEWS FOR craig.kirchoff+webnews@gmail.com
up healthier? Are they more satisfied with their care? My sense is that
the Dartmouth researchers are scientists trying to capture the empirical
reality of America’s health care sector. They have been doing this for a
long time, they are very good at it, and they consistently find that a lot of
the medical care that Medicare patients consume appears to provide no
value.
That finding has drawn intense criticism, not least from health care
providers in high-spending areas, whose resource use it calls into
question. Dartmouth researchers have tried to address those criticisms
by approaching the issue from whatever angles the data will allow.
• It is possible, and many critics claim, that high-spending regions
spend more because they treat sicker patients. The Dartmouth
folks have therefore controlled for patients’ health status, then
measured whether patients in high-spending areas experienced
better outcomes.
• It is certain, as critics also note, that those controls are imperfect.
Dartmouth researchers have therefore controlled for the ultimate
outcome — death — by measuring geographic variation in
Medicare enrollees’ medical consumption in the last six months of
life. That too is an imperfect strategy, as Reed and Harris note. It is
possible that high-spending regions are doing things that keep
some Medicare patients alive and out of that cohort.
• Dartmouth researchers have compared variations in spending to
measures of quality other than health outcomes, including
“process” measures that show whether doctors are following
evidence-based treatment guidelines.
• To determine whether patient preferences are driving geographic
variation, they have compared consumption patterns to surveys
estimating patients’ preferences for more- vs. less-aggressive
treatment.
These various strategies consistently show that a large share of medical
spending cannot be explained by either patient preferences or better
health outcomes. Indeed, they have even found that higher spending
often correlates to lower-quality care. These findings suggest that
perhaps one-third of U.S. health care spending — which amounts to
about $700 billion per year, or 5 percent of U.S. GDP — is not making
patients any healthier or happier.
These research strategies are not perfect, either individually or in the
aggregate, because the data are imperfect and medicine is extraordinarily
complex. (If this stuff could be measured perfectly, it wouldn’t be
medicine.) Furthermore, even if the Dartmouth studies fully controlled
for health status and patient preferences, their findings would not prove
that all the extra money is being wasted. It may be, for example, that the
additional money spent in high-spending areas generates new knowledge
that helps save lives in low-spending areas too.
Nevertheless, this central finding has held up to many different research
strategies. The Dartmouth crowd has produced a sizable and credible
8 June 2010
body of research that suggests as much as one third of U.S. health care
spending — roughly the annual economic output of South Carolina — is
little more than a wealth transfer from taxpayers and premium-payers to
health care providers and medical suppliers.
Given all this, it was bizarre to see Abelson and Harris claim, “Measures
of the quality of care are not part of the formula” (which is untrue), and
“Neither patients’ health nor differences in prices are fully considered by
the Dartmouth Atlas” (the presence of “fully” makes this claim merely
unfair and misleading). I agree with my left-leaning friends. This was
shoddy journalism.
I have seen only one conservative comment on the Abelson-Harris story.
Since OMB director Peter Orszag invokes the Dartmouth data in his
argument for ObamaCare, my conservative friend celebrated Abelson
and Harris’s attack on those data.
My conservative friend is in error — but so is Orszag. As I wrote above,
the Dartmouth folks are merely trying to capture what is happening in
the world that surrounds us. So long as the Dartmouth research holds up
to scrutiny, advocates of free-market health care reform should embrace
it, for two reasons. First, embracing reality is generally a good idea.
Second, the Dartmouth research makes the case for free-market reforms,
and against the Obama-Orszag agenda. The Dartmouth Atlas focuses
almost exclusively on the Medicare program, where economists of all
stripes acknowledge that government-imposed price and exchange
controls, coupled with a lack of patient cost-consciousness, are the
driving forces behind persistent excessive spending and a lack of focus
on value. (Dartmouth researchers opaquely refer to Medicare’s fee-for-
service price and exchange controls as “the current reimbursement
system.”) These are not products of the free market. The wasteful health
care spending identified by Dartmouth researchers must be laid squarely
at the feet of the Left — or as I affectionately call them, the Church of
Universal Coverage.
My conservative friend(s) would do better to respond that a free market
can reduce unwarranted variation in health care spending, while
government can’t — not in Medicare, and not even in the Veterans
Health Administration.