Massive government subsidies to Amazon.com and other internet retailers

This piece in the WSJ explains how the government has gotten around regulations put in place to stop them from unfairly competing against private companies.

A Citigroup analysis finds each box [Amazon ships] gets a $1.46 subsidy. It’s like a gift card from Uncle Sam. . . . 

Other companies, such as UPS and FedEx , compete with the Postal Service to deliver packages. Lawmakers, to their credit, wanted a level playing field between the post office and its private competitors. The 2006 Postal Accountability and Enhancement Act made it illegal for the Postal Service to price parcel delivery below its cost.  

But with a networked business using shared buildings and employees, calculating cost can be devilishly subjective. When our postal worker delivers 10 letters and one box to our home, how should we allocate the cost of her time, her truck, and the sorting network and systems that support her? What if the letter-to-box ratio changes? 

In 2007 the Postal Service and its regulator determined that, at a minimum, 5.5% of the agency’s fixed costs must be allocated to packages and similar products. A decade later, around 25% of its revenue comes from packages, but their share of fixed costs has not kept pace. First-class mail effectively subsidizes the national network, and the packages get a free ride. An April analysis from Citigroup estimates that if costs were fairly allocated, on average parcels would cost $1.46 more to deliver. It is as if every Amazon box comes with a dollar or two stapled to the packing slip—a gift card from Uncle Sam.

For years Amazon and other companies that sold over the internet didn't pay sales taxes.  Here is a National Conference of State Legislatures report in 2014.

Main Streets all across America are looking to Washington to close a loophole that gives online-only retailers an unfair advantage over their Main Street competitors. 

This unfair advantage costs local communities jobs and tax revenue and creates significant unfairness in the marketplace for businesses and consumers alike. 

NCSL advocates for passage of e-fairness legislation because it levels the playing field for local businesses, which are the economic backbones of our communities that provide employment and tax revenue to fund vital services. As sales taxes account for over a third of revenues for most states, including over half of tax collections for six states, the inability to collect taxes that are legally owed constrains states’ options to reform their tax code elsewhere. This includes lowering tax rates or requiring states to raise certain tax rates to fund necessary government services. 

How Did We Get Here?Two Supreme Court rulings (Bellas Hess and Quill) cite concern that collecting sales tax for multiple states would be too difficult. As it is now, the Supreme Court ruled that states can only require retailers to collect state taxes in territories where they have offices or stores. 

How Is it Affecting States?States lost an estimated $23.3 billion in 2012 from being prohibited from collecting sales tax from online and catalog purchases. With nearly every state still facing budget shortfalls, this revenue could help fund police, school teachers and other much-needed programs. . . .

Look at all the Democrats who blamed the Philadelphia Amtrak crash on infrastructure spending cuts by Republicans

Here you have all these people speaking out on the cause of the Amtrak crash before they had any evidence what might have caused it.  Yet, they all seemed to agree it was due to the lack of infrastructure spending.  Put aside that Obama was the one who first suggested the sequester.  Put aside the fact that the so-called stimulus already had a lot of infrastructure spending and the Democrats who controlled everything at the time could have put more of the Stimulus into infrastructure if they really thought it was important.

Luke Russert on MSNBC said: "What you're essentially seeing here are the effects of Sequester."

NBC News: $1.1 Billion Amtrak Funding Cut One Day After Crash: REPUBLICANS PASSED SPENDING CUTS AS THE LONGSTANDING FUNDING BATTLE TOOK A RAW AND EMOTIONAL TURN.

MSNBC: ED RENDELL ON AMTRAK DISASTER: REPUBLICANS CAN’T KEEP SHORTCHANGING INFRASTRUCTURE

Delegate Homles Norton on Amtrak: "Certainly is" a link between safety and funding

The Economist magazine had this in 2010:

Mr Obama called the bill “the largest new investment in our nation's infrastructure since Eisenhower built an interstate highway system in the 1950s.” But even on the broadest definition of the term, infrastructure got $150 billion, under a fifth of the total. Just $64 billion, or 8% of the total, went to roads, public transport, rail, bridges, aviation and wastewater systems. . . .

Why not put more of this $150 billion into roads and rail if they really thought that was so crucial.

Chuck Schumer: "The Public Knows In Its Gut" Only Government Can Help Middle Class

There is one way that Democratic Senator Schumer is correct here.   If you accept that we have the highest tax rates in the world and a huge regulatory burden and that those are reducing investments and thus wages. then "yes" there is something that government can do: get out of the way, 

. . . As 2014 began, the parties were in stalemate. But, when government failed to deliver on a string of non-economic issues: the rollout of the Obamacare exchanges and the mishandling of the surge in border crossers, the ineptitude of the VA, the initial handling of the Ebola threat, people lost faith in government's ability to work, and then blamed the incumbent governing party, the Democrats, creating a Republican wave.  

Ultimately, the public knows in its gut that a strong and active government is the only way to reverse the middle class decline and help revive the American Dream. Democrats lost in 2014 because the government made mistakes that eroded the electorate's confidence in its ability to improve the lives of the middle class. . . . .

There seems to be a lot more controversy over Schumer's crass comments about whether the Democrats should have done Obamacare rather than focusing on the economy.  What Schumer missed with these comments is that Obamacare actually made a lot of people worse off.  It increased health insurance costs, but subsidies hid those increases from many.

The most popular state attractions are all privately run and owned places

(Click to enlarge, though the picture will be pretty blurry.)

#1: Mall of Americas: 40 million
#2: Times Square, NY: 37 million
#3: Las Vegas Strip: 30 million
#4: Faneuil Hall Marketplace: 20 million
#5: Walt Disney World: 17 million
#6: Disneyland: 14.7 million

Others
Navy Pier (Chicago): 8.6 million
San Antonio River Walk: 5.1 million
French Quarter (New Orleans): 5 million
Grand Canyon: 4.4 million
Independence National Historical Park: 4.1 million
Yellow Stone National Park (Wyoming): 3.1 million

Obama administration can't account for how $619 billion was spent

Even by the Federal government standards, not being able to account for $619 billion is a lot of money.  From Fox News:

The Obama administration failed to properly account for how it spent nearly $619 billion, according to a watchdog audit of the main federal website meant to track where taxpayer money is going. 

The report from the Government Accountability Office picked apart the website USASpending.gov, and the agencies feeding information to it. 

The database of government spending and contracts was created out of a 2006 transparency law, but the GAO found it continues to have serious problems. The Department of Health and Human Services was the worst offender, during the 2012 period GAO examined. 

“Although agencies generally reported information for contracts to USASpending.gov, they did not properly report information on assistance awards, totaling nearly $619 billion,” the GAO reported. . . .

Only 37 percent of Americans trust the federal government

These results are from a new Fox News poll.  One thing that should be explained is that Democrats trust in government goes up when there is a Democratic president and Republican trust is up when there is a Republican.  That explains the different results for Republicans and Democrats.  Interestingly, despite all the scandals with the IRS, NSA, EPA, AP, State Department, Benghazi, VA, and others, the level of trust in the federal government is actually higher now than last year or in 2010.

What is the Washington National Cathedral doing involved in such obviously political causes?: Pushing for Gun Control

Why is the National Cathedral taking political stands?

The Very Rev. Gary Hall is dean of the Washington National Cathedral in Washington, D.C. . . . 
In partnership with the Newtown Foundation, the National Cathedral is holding a national vigil on December 12 to honor the lives lost at Newtown and the more than 30,000 Americans who have died from gun violence this year. . . .

The National Cathedral has gotten some money from the federal government, but obtains other benefits simply by being labeled as the "National Cathedral."  I have no problem with churches getting involved in whatever political issues that they want.  The question is whether the National Cathedral is something different.  

From the Washington Post:

The annual "Save America's Treasures" grants were announced Tuesday at a ceremony at the historic President Lincoln's Cottage in Washington, D.C. A coalition of organizations, led by the National Park Service, the President's Committee on the Arts and the Humanities and the private National Trust for Historic Preservation presented $14.3 million to the groups. 

The Washington National Cathedral, the towering center for worship and important national services, received $700,000 for repairs that any large building constantly needs. "The building is over 100 years old in some places and one of the principal needs is repointing. The mortar deteriorates over time in each of the limestone blocks," said Andrew Hullinger, the cathedral's senior director for finance and administration. And even sacred places have the same to-do list as ordinary homes, said Hullinger, citing foundation leaks and repairs to underground and interior drain lines. "The need ranges from nuts and bolts to art preservation." . . . .

Over 95 percent of the highest paid state employees who work for Kansas work for the university system

Not too surprising, but it is useful to document.  From KansasWatchDog.org:

. . . Of the 1,000 highest-paid public employees in Kansas last year, nearly all of them were on the payroll of one of the state’s six public universities. 

I pulled the data on state employee salaries from KansasOpenGov.org. While the site is operated by the Kansas Policy Institute, a free-market think tank that emphasizes small government and fiscal prudence, all the figures were compiled through information provided by the Kansas Department of Administration. 

In all, only 46 of Kansas’ top 1,000 highest-paid state employees work somewhere other than a state university. That’s less than 5 percent. . . .

Public School "tells Mother to get Daughter Breast Reduction after Harassment"

If the daughter is supposed to get her breasts reduced so that the harassment can be stopped, what is the recommendation for the boy who has severe scars from his surgery?  This extreme recommendation seems to indicate that the school is admitting defeat.  From Moline Acres, Missouri:

. . . Tammie Jackson says her daughter Gabrielle is being sexually harassed because of her large breasts at Central Middle School in Moline Acres. She says the sixth grader has been dealing with bullying since last semester. 

Jackson called the Riverview Gardens School District to complain and was shocked by what she was told. 

“It makes me feel like now you are telling me it’s my fault, it’s God’s fault the way he made her. The lady on the phone said they could transfer my daughter and said her boobs were so large she will always get teased. And the only suggestion she had for me is to have my daughter get a breast reduction,” said Jackson. 

FOX 2 stopped by the school district for a response and we’re told they’re working to counsel students to resolve the bullying issue. As for the claims about the surgery, we’re told they are still looking into it. 

Jackson also says her 9-year-old son Elijah has bullying issues. He has a rare heart condition and she says kids make fun of his surgical scars, causing him to make suicidal comments. . . .

Long Island Power Authority, a government-run utility

A 25 year old computer system?  From Fox News:

. . . The New York Post reported that Long Island residents received an estimated rate that covered the entire billing cycle, and the statements made no mention of potential refunds to account for the prolonged blackouts.
"I can't get LIPA to acknowledge my existence on earth to talk to me about anything," Jonathan Saporta told the paper after getting hit with $649 for a home he left in October and $281 bill for his new place. "But I guess they had power, so they could print my bills. Nice, right?" . . .
LIPA also acknowledged that an outdated computer system for keeping customers notified has added to people's frustration.
But some say the government-run utility should have seen it coming. It was recently criticized in a withering state report for lax preparation ahead of last year's Hurricane Irene and for the 25-year-old computer system used to pinpoint outages and update customers. . . .

Watch how kids react to having their candy redistributed, the future "one percenters"?

For some reason people let the government do things that they would never think is justifiable if they did it.

Three years in prison for stealing $800,000?: No wonder there is massive theft by TSA officials

Major airports with a history of significant theft problems.

There are only a few airports (San Francisco and Kansas City being the most prominent) with private screening, but those do not seem to have a problem with theft.  It would be nice to have a more careful comparison being made.

No wonder the turnover rate for government employees is so low: Government workers work 4 to 5 weeks less per year than private sector workers

From Federal News Radio:

Federal employees work about a month less per year than private sector workers, according to a report by conservative think tank Heritage Foundation.
The report found federal employees work on average of 38.7 hours a week, compared with 41.4 hours per week in the private sector. That difference adds up to 3.8 fewer weeks per year that feds work compared with private sector workers.

"From a budgetary perspective, shorter work hours in the public sector may cause governments to be less efficient in converting tax dollars into public services. More broadly, the perception that government employees do not work as hard as private-sector employees runs counter to the spirit of public service," according to the report.

Heritage found state and local government employees work even fewer hours — 38.1 hours per week or 4.7 weeks less per year than private sector workers.

Heritage used data from the Bureau of Labor Statistics' American Time Use Survey to reach its findings. Heritage notes the survey only measures work time and not work effort or work effectiveness.

One federal union called Heritage's findings "utterly misleading."

"Private sector averages are low because so many private, non-union employers provide absolutely no paid time off. No sick leave, no vacation, no holidays. That is the disgrace, not the fact that public sector employers recognize that all workers need some paid time off," said Jacqueline Simon, public policy director for the American Federation of Government Employees, in an emailed statement. . . .

No surprise here: Obama leads gov employees by 17 points, Romney leads entrepreneurs by 20

I am surprised that even more government employees aren't voting in their immediate self interest on this one.  Rasmussen finds:

A new Rasmussen Reports national telephone survey shows that among those who are self-employed or own their own business, Mitt Romney enjoys a 20-point lead. Fifty-six percent (56%) favor Romney, and 36% prefer the president.
The president, by contrast, enjoys a 17-point lead among government employees. Among those on the public payroll, the president leads 54% to 37%. . . .

How much have pure government transfer payments increased over time? How much has total government spending grown?

Government spending on wealth transfers (government spending minus spending on goods and services) has grown dramatically since the early 1960s. Total government spending as a percent of GDP has soared from 25% in the early 1960s to about 36% today -- an almost 50% increase in GDP share.

Op-ed at RealClearMarkets: Austerity Works: It's Time to Give It a Try

This piece is with my son Sherwin. The graphs are pretty powerful. The piece starts this way:

Austerity or growth, is that the choice facing Americans and others around the world?

The debate never seems to abate. European Union finance ministers last week gave Spain permission to delay cutting some government spending and reducing its deficit, though many such as The Economist magazine fear that even the cuts that will be made go too far. A similar decision may soon have to be made for Greece. Even though the pro-bailout parties won the June Parliamentary election, they too are asking for a two-year delay in cutting spending and reducing their budget deficit.

The Obama administration has put increasing pressure on German Chancellor Angela Merkel to ease up on Germany's austerity prescription. President Obama continually touts more government spending as the cure, and derided Republican "let's cut more" spending strategy as the cause of Europe's economic problems.

Last month, German Finance Minister Wolfgang Schäuble was having none of it, telling Obama to fix the U.S. deficit before giving Europe advice: "Herr Obama should above all deal with the reduction of the American deficit. That is higher than that in the euro zone." . . .

49% of Americans live in Households Receiving Government Benefits

From the WSJ:

. . . . The 49.1% of the population in a household that gets benefits is up from 30% in the early 1980s and 44.4% as recently as the third quarter of 2008.
The increase in recent years is likely due in large part to the lingering effects of the recession. As of early 2011, 15% of people lived in a household that received food stamps, 26% had someone enrolled in Medicaid and 2% had a member receiving unemployment benefits. Families doubling up to save money or pool expenses also is likely leading to more multigenerational households. But even without the effects of the recession, there would be a larger reliance on government.
The Census data show that 16% of the population lives in a household where at least one member receives Social Security and 15% receive or live with someone who gets Medicare. There is likely a lot of overlap, since Social Security and Medicare tend to go hand in hand, but those percentages also are likely to increase as the Baby Boom generation ages. . . .

Something to remember the next time people say that government employees don't get paid enough

Economists have long used turnover rate as a proxy for how good a job is. I suspect that this measure is highly correlated with that. From Forbes:

Our list of the happiest and unhappiest industries to work in, compiled by CareerBliss, is based on more than 43,000 independent employee reviews. Those employees, all over the country, were asked to evaluate nine factors that affect workplace happiness. Those included their relationship with the boss and co-workers, work environment, job resources, compensation, growth opportunities, company culture, daily tasks, and control over the work done does on a daily basis. They evaluated each item on a five-point scale and also indicated how important it was to their overall happiness.
Heading the list of the unhappiest industries to work in is agriculture and mining, with an index score of 3.76. Agriculture and mining workers also expressed the most pessimism about growth opportunities and compensation.
“Often agriculture and mining jobs have lower salaries, and our data shows that workers in these areas felt that growth opportunity was limited, which can have a drastic impact on the way employees feel about their overall future,” Miller says. . . .
But the most blissful employees of all work for the government. With an index score of 4.07, government employees said they are more than satisfied with the people they work with and their daily tasks. They’re most dissatisfied with growth opportunities, compensation and company culture. . . .
The education industry follows close behind in the No. 2 spot, with a 4.06 index score. Workers in education are particularly happy with their boss and colleagues. . . .

Wacky Democrat Laws: Banning youtube videos of karaoke singing?

I thought that this was a joke the first time that I read this.

Justin Bieber says Minnesota Sen. Amy Klobuchar should be "locked up" and led away in "handcuffs!"

And, we agree with him on this issue.

The senator (pictured, right) is trying to pass the "Bieber Bill," which would ban people from singing other people's songs -- specifically online, in places like YouTube.

"Whomever she is she needs to know that I'm saying she needs to be locked up," he told Clear Channel's Kane of The Kane Show today. "I just think that's ridiculous." . . .

Does the New York Times ever fact check Krugman?

Normally, I don't even bother responding to Krugman's claims, but this one deserved some comment ("Hey, Small Spender," New York Times, Oct. 10, 2010).

the big government expansion everyone talks about never happened. This fact, however, raises two questions. First, we know that Congress enacted a stimulus bill in early 2009; why didn’t that translate into a big rise in government spending? Second, if the expansion never happened, why does everyone think it did?

Part of the answer to the first question is that the stimulus wasn’t actually all that big compared with the size of the economy. Furthermore, it wasn’t mainly focused on increasing government spending. Of the roughly $600 billion cost of the Recovery Act in 2009 and 2010, more than 40 percent came from tax cuts, while another large chunk consisted of aid to state and local governments. Only the remainder involved direct federal spending.

And federal aid to state and local governments wasn’t enough to make up for plunging tax receipts in the face of the economic slump. So states and cities, which can’t run large deficits, were forced into drastic spending cuts, more than offsetting the modest increase at the federal level.

The answer to the second question — why there’s a widespread perception that government spending has surged, when it hasn’t — is that there has been a disinformation campaign from the right, based on the usual combination of fact-free assertions and cooked numbers. And this campaign has been effective in part because the Obama administration hasn’t offered an effective reply. . . .