May 05, 2016

A Thought about the Effect of Government Subsidies

"Between 1960 and today, overhead costs as a share of health spending doubled to 8%. But the explosion in overhead costs is shown dramatically in the chart (see at bottom), which measures the relative growth in physicians and health care administrators from 1970 to 2009.

"ObamaCare has only added fuel to this health care paperwork fire. In 2014, insurance overhead costs jumped 12.4%, and the cost of administering government programs jumped more than 10%.

"ObamaCare has only added fuel to this health care paperwork fire. In 2014, insurance overhead costs jumped 12.4%, and the cost of administering government programs jumped more than 10%.

"This phenomenon is not limited to health care.

"Over the past several decades, the federal government has sharply increased the amount of college aid it provides students. According to The College Board, federal aid today is 134% higher than it was in 2000.

"But, as Paul Campos noted in the New York Times, that money simply fueled tuition inflation. “The astonishing rise in college tuition correlates closely with a huge increase in public subsidies for higher education. If over the past three decades car prices had gone up as fast as tuition, the average new car would cost more than $80,000.”

~ John Merline

Source: his Capital Hill article, "Government Subsidies Fuel Overhead Costs in Health Care, Education, posted May 4, 2016, at Investor's Business Daily.

As noted in the first paragraph above, here is the chart:


The op-ed reminds readers to remember this editorial whenever, "someone tries to sell you on a plan to have the government make something 'free.'"

HT to Isaac Morehouse for posting the chart above in an April 30, 2016 post entitled,"Every Industry Gets Worse When Government Gets Involved."

May 04, 2016

It's No Longer "Ordinary Services @ Extraordinary Prices"

When the Arlington County Taxpayers Association (ACTA) produced an annual comic book years ago, we would splash, “Ordinary Services @ Extraordinary Prices” in one of the front page corners. Apparently, our methodology was faulty.

According to the headline of an online story in today's Arlington Sun Gazette, "Arlington scores high for getting good services for tax dollars." Here's their story:

"Arlington ranks second among Virginia jurisdictions in a new ranking of biggest “bang for the buck” when it comes to property taxes.

"The new ranking by SmartAsset looks at communities’ property-tax rates, educational quality and crime rates to come up with an “overall value index.”

"Arlington finished with a 99.51 rating, second only to Page County (99.78) among commonwealth localities. Arlington did considerably better on educational quality, but had a higher property-tax rate and more criminal activity than Page County.

"Rounding out the top five are Loudoun County (99.36), Hanover County (99.33) and Charlotte County (99.29).

"Among other Northern Virginia jurisdictions, Prince William County ranked ninth (98.76) and Fairfax County 10th (98.69)."

The Sun Gazette report says, "SmartAsset is a New York-based financial technology company," adding "the full ranking can be found at"

Perhaps the difference results from our higher standards than those of the technicrats who produced the ranking. ElGrowlerGrande will take another look at the Virginia Auditor of Public Accounts' "comparative report" to see whether those comparisons with other Northern Virgina jurisdictions are appropriate.

Growls readers are urged to tell members of the Arlington County Board what you think about the services provided by the county government. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

May 03, 2016

A Thought about the Foundation of a Free Government

"`Tis substantially true, that virtue or morality is a necessary spring of popular government. The rule indeed extends with more or less force to every species of free Government.”

~ George Washington, Farewell Address, 1796

Source: Founders' Quote Database, The Patriot Post.

May 02, 2016

Uncle Sam, Esq. A Legal Army of 25,060, and Growing?

Take a guess. How many lawyers do you think are employed by the federal government?

According to Adam Andrzejewski, founder and CEO of -- reportedly "the world's largest private repository of public spending -- "the number of federal lawyers now exceed the individual public payrolls of twelve states or the top seven largest private law firms in the USA – combined," he writes in an article last Thursday in Forbes magazine.

He provides the following highlights from the report:

  • 25,060 lawyers on the rank and file federal agency payroll with a job classification of ‘general attorney’ cost taxpayers $3.3 billion last year and $26.2 billion since 2007, plus $130 million in bonuses.
  • The average federal lawyer ‘earned’ $132,817.06 plus bonuses in FY2014.
  • The number of federal lawyers exceeds the total public payroll headcount of twelve states including Alaska (25,050); Delaware (23,249); Idaho (20,270); Maine (18,602); Maryland (16,877); Nevada (24,524); New Hampshire (14,694); North Dakota (15,742); Rhode Island (17,073); South Dakota (12,774); Vermont (13,289); and Wyoming (8,500).
  • If the feds were a private-sector law firm, they would exceed the TOP 7 Largest Private Law Firms – combined (24,411): Baker & McKenzie (4,363); Yingke (4,153); DLA Piper (3,702); Dacheng (3,700); Norton Rose Fulbright (3,461); CMS Legal Service (2,522); and Jones Day (2,510).
  • More than half of the lawyers are located inside the Washington, D.C. beltway.

Andrzejewski says that in a sense, "the lawyers have more firepower" than a Pentagon combat division, adding that  "Mario Puzo cautioned in The Godfather, 'A lawyer with his briefcase can steal more than a hundred men with guns.'"

His explanation of the importance of this issue:

"Many times, those lawyers are out to protect the government’s interests, not the public interest.

"Consider the example of North Carolina convenience store owner, Lyndon McLellan.  McLellan was accused of making cash bank deposits less than $10,000 to avoid reporting requirements. The feds dropped the case but kept McLellan’s life savings of $107,000 for two more years. Prosecutors even had the gall to warn him not to go to the media.

"A couple years ago, Chicago teamed up with the feds to rid itself of the numerous little-entrepreneurial electro-platers on the South and Near West sides. After the regulations, the enforcers moved in and today, there are very few left. In just one case, federal lawyers spent $1 million to shutdown a family owned electro-plater – settling for under $50,000. The business never recovered."

The entire 5-page report from is available here (.pdf). Instapundit comments on the report here. The Daily Caller reports on the report here.

In addition, to the bullying of defendants who are innocent into settlements because of the cost of litigation. there are also  the voluntary civil settlements with criminal defendants with diverting part of the profits to advocacy interests, not to mention the declinations of some of the worst corruption under the excuse of limited prosecutorial resources.

Take a few minutes to write to a member of Congress. Contact information is available at the Library of Congress' Thomas (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

And tell them ACTA sent you.

Kudos to for their work in making public spending more transparent. Retired U.S. Senator Tom Coburn (R-Oklahoma) provided the following testimonial:

"Open the Books is doing the work I envisioned when the Coburn-Obama bill became law.  Their innovative app and other tools are putting sunlight through a magnifying glass."

May 01, 2016

Economy Starts Year Badly; Grows Only 0.5% in 1st Quarter

The Wall Street Journal's Jeffrey Sparshott starts his front-page, above-the-fold report on Friday (behind WSJ paywall) this way:

"A sharp pullback in business investment and weak global demand dragged down an already-lackluster U.S. economy in the opening months of 2016, the latest setback in a bumpy expansion entering its seventh year.

"Consumers and the housing market kept the U.S. from sliding backward, though only barely. Gross domestic product, the broadest measure of economic output, advanced at a 0.5% seasonally adjusted annual rate in the first quarter, the Commerce Department said Thursday. That marked the economy’s worst performance in two years."

Sparshott added that corporate executives and economists blamed "turmoil across global financial markets" early in the year. He also wrote the first quarters of 2014 and 2015 were followed by a rebound. In addition, he noted the Fed "hasn't budged on interest rates since December (2015) when it raised its benchmark for the first time in nearly a decade," adding the Fed had backed-off raising the rate a full percent in 2016.

On page A2, the Journal included a very informative chart showing GDP changes in various sectors of the economy. For example, while overall GDP increased only 0.5% in the first quarter, business investment decreased 5.9% for the quarter; consumer spending on goods increased 0.1%; exports decreased 2.6%; consumer spending on services increased 2.7%; and, residential spending increased 14.8%. Federal government spending decreased 1.6% while state and local government spending increased 2.9.%.

The GDP numbers are prepared by the U.S. Commerce Department's Bureau of Economic Analysis (BEA), which you can find here.

In a front-page story in Friday's Washington Times, Dave Boyer's lede was, "The White House labored Thursday to explain a first-quarter economic report showing the weakest growth in two years, even as President Obama was trumpeting his mastery of the economy in a New York Times Magazine interview." He went on to write:

"Private economists said the first quarter number was uninspiring, although the economy remains on track for at least modest growth this year.

“The economy essentially stalled in the first quarter, but that doesn’t mean it is faltering,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, told the Reuters news service. “Some of the restraints to growth are dissipating. Growth is likely to accelerate going forward.”

"But Nariman Behravesh, chief economist at IHS Global Insight, said the GDP number pointed up a major factor in the role the economy will play in November’s presidential race.

“Why is it that voters are feeling so blue when we have an economy that is close to full employment?” he said. “Part of the problem is a divide between people with college degrees who are doing fairly well and people with high school degrees who are not doing so well.”

Boyer included the following discussion to debate President Obama's economic record:

"The first-quarter number presented a political and PR problem for the White House, coming just as President Obama appeared to be trying to burnish his own legacy overseeing the economy since the global financial crisis of 2008.

"The president told a group of college journalists Thursday that his record on the economy is among his proudest achievements.

“I’m proud about the work we did to save the economy,” Mr. Obama said. “Right after we came in, we were in a free fall and could have experienced a worldwide depression.”

"He expressed a similar view while discussing his legacy last week with British youth, boasting, “Saving the world economy from a great depression, that was pretty good.”

"The president also urged the budding journalists to write “good stories” about the government, using his administration as an example.

"It is very hard to get good stories placed,” Mr. Obama said. “People will assign you stories about what’s not working. It’s very hard for you to write a story about, ‘Wow, this thing really works good.’”

"In an interview with The Times’ magazine, Mr. Obama said he believes the U.S. economy is in better shape than Americans appreciate.

“I actually compare our economic performance to how, historically, countries that have wrenching financial crises perform,” the president said. “By that measure, we probably managed this better than any large economy on Earth in modern history.”

"In the magazine interview Mr. Obama expressed frustration by the suggestion from Republicans that the economy is faltering under his administration.

“I mean, the truth of the matter is that if we had been able to more effectively communicate all the steps we had taken to the swing voter, then we might have maintained a majority in the House or the Senate,” he said.

"The president also believes his administration could have helped more people if he had sold his policies more effectively.

“The fact of the matter is that our failure in 2012, 2013, 2014 to initiate a massive infrastructure project — it was the perfect time to do it: low interest rates, construction industry is still on its heels, massive need — the fact that we failed to do that, for example, cost us time,” Mr. Obama said. “It meant that there were folks who we could have helped and put back to work and entire communities that could have prospered that ended up taking a lot longer to recover.”

"The missed opportunities, he said, 'keep me up at night sometimes.'"

Boyer also wrote, "There are some hopeful signs for the economy: The dollar’s rally appears largely over, oil prices are firming up, and the bulk of the inventory liquidation is out of the way. In addition, the jobs market remains fairly robust."

At the Washington Post's Wonkblog on Thursday, Chico Harlan reiterated the point made above by the WSJ that residential investment was the bright spot in the 1st quarter GDP report. According to Harlan:

"If there was a bright spot, i(t) came in the housing sector, where real residential fixed investment — a measurement for building and remodeling — rose 14.8 percent during the quarter. In a post on the White House web site, Jason Furman, chairman of President Obama’s Council of Economic Advisers, said that the demand for homes was being driven by job growth and relatively low mortgage rates. Household formation was still relatively low compared with historical trends, he said, and had further room to grow."

On Friday, the Wall Street Journal (behind WSJ paywall) tucked the following barb into an editorial:

"President Obama didn’t comment on the first quarter, but the New York Times rolled out an interview with him Thursday, part of a larger apologia for his economic record, in which he offered this beauty: “I actually compare our economic performance to how, historically, countries that have wrenching financial crises perform. By that measure, we probably managed this better than any large economy on Earth in modern history.”

"Mr. Obama has already compared himself favorably to every President except Lyndon Johnson, FDR and Lincoln, so why fake humility in his home stretch?

"The reality is that the first quarter is further evidence of what has been the weakest economic expansion in the postwar era. The 0.5% growth is subject to revision but it follows 1.4% in the fourth quarter. Growth over the last six months has averaged about 1%, and under 2% over the last 12 months. The usual definition of recession is two consecutive quarters of negative growth, which we barely ducked."

Investor's Business Daily (IBD) posted two editorials on Thursday for their Friday paper edition. One editorial focused on the President's boasts "about his economic record." According to IBD:

"The only real problem with the economy, as far as Obama is concerned, is that he hasn’t been selling his successful policies aggressively enough.

“We were moving so fast early on that we couldn’t take victory laps. We couldn’t explain everything we were doing. I mean, one day we’re saving the banks; the next day we’re saving the auto industry; the next day we’re trying to see whether we can have some impact on the housing market,” he told the Times’ Andrew Ross Sorkin.

"Never mind that Obama didn’t “save” either industries. Obama’s only contribution to GM and Chrysler’s bankruptcy process was to protect union interests at taxpayer’s expense. Dodd-Frank didn’t save banks; in fact it’s killed multitudes of community banks. His stimulus was a massively expensive bust.

"The rest of Obama’s boasts aren’t on any firmer ground.

"Obama talks about 14.4 million new jobs since 2010, without noting that working age population grew by 15.8 million over those same months.

"He touts the 5% unemployment rate, but fails to mention that it would be more like 10% if millions of Americans hadn’t given up looking for work altogether."

The second IBD editorial focused more on economic growth. In it, IBD starts by asking:

"So why aren’t businesses investing? First, is rotten policy decisions. We’ve raised investment tax rates under Obama — capital gains, dividends and income taxes on profits — so the after tax returns on business investment are lower. Investment taxes are up by as much as 60% since the end of the George W. Bush years (from 15% to 23.8%). As Arthur Laffer has taught us over and over: tax something, and you get less of it.

"Regulations, like Dodd-Frank are suffocating businesses, as are the rules and mandates under ObamaCare. Energy capital spending has collapsed, mostly due to the free fall in oil and gas prices. It doesn’t help that Obama has declared war on fossil fuels, through EPA strictures and anti-America international accords like the Paris climate change agreement. Hillary has practically boasted to her green billionaire friends that he won’t rest until America’s oil and coal industries are dead. Republicans should tell voters they care more about good jobs here in America than the purely theoretical rise of the oceans.

"The latest dismal economic numbers should put an end to Obama’s insulting cheerleading on a limp economy. More than 80% of voters in primary exit polling say that the economy and jobs are their main concerns, and that is a reflection of a real economy that can’t seem to get its mojo back. After a decade of flat wages, voters are financially stressed out.

"Yet, though the economy stinks, the GOP talks about anything but the economy. The GOP needs to present a growth agenda."

Elsewhere on the Internet, the Washington Examiner's Joe Lawler reported on the 1st quarter GDP, saying the economy began 2016 by suffering the "worst quarter of growth in two years." At the Washington Free Beacon, Ali Meyer also wrote about the BEA's "advance estimate" of the GDP, noting the "second estimate" for the first quarter of 2016 will be released on May 27.

And while you're thinking about the economy and jobs, take a few minutes to write to a member of Congress. Contact information is available at the Library of Congress' Thomas (use left-hand column). Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -  write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

And tell them ACTA sent you.

April 30, 2016

A Thought about Capitalism

"Mr. Obama came into office telling us that capitalism didn’t work, and he wanted no part of it.

“‘The market will take care of everything,’ they tell us . But here’s the problem: it doesn’t work. It has never worked. It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible postwar booms of the ‘50s and ‘60s. And it didn’t work when we tried it during the last decade. I mean, understand, it’s not as if we haven’t tried this theory,” he said in a speech in Osawatomie, Kansas on Dec. 6, 2011.

"But Mr. Obama is wrong. Everywhere it has been tried, it has not only worked, it has been a spectacular success.

“In 1800, the total population in America was 5.3 million, life expectancy was 39, and the real gross domestic product per capita was $1,343 (in 2010 dollars),” writes James Otteson of New York’s Yeshiva University in a paper for the Manhattan Institute think tank.

"By “2011, our population was 308 million, our life expectancy was 78, and our GDP per capita was $48,800. Thus, even while the population increased 58-fold, our life expectancy doubled, and our GDP per capita increased almost 36-fold,” Mr. Otteson continued.

“Such growth is unprecedented in the history of humankind,” he said. “And it was “due principally to the complex of institutions usually included under the term ‘capitalism.’”

"Near the end of Ronald Reagan’s successful presidency, that ended a severe recession in just two years, a liberal critic said he had “made capitalism fashionable again.”

"Once in office, Mr. Obama admitted to colleagues, that he aspired to be “a transformational leader” like Reagan.

"That was not going to happen, especially to someone who still believes that capitalism is a disproven theory."

~ Donald Lambro

Source: his April 29, 2016 syndicated column, posted at The Washington Times.

To read James Otteson's entire paper at the Manhattan Institute, click here.

April 29, 2016

Jobs and Economic Development in Arlington County

The Arlington Sun Gazette posted an online story this morning saying that Arlington County's "joblessness remains lowest in Commonwealth."

The Sun Gazette began their reporting this way:

"Despite a slight uptick from a month before, Arlington’s unemployment rate in March remained the lowest in the commonwealth.

"With 142,020 county residents employed in the civilian workforce and 3,920 looking for work, the county’s jobless rate of 2.7 percent was up from 2.6 percent from February, according to figures reported April 27 by the Virginia Employment Commission.

"The slight increase was part of a pattern across Northern Virginia, where most jurisdictions saw no change or a slight jump in joblessness. Unemployment increased from 2.8 percent to 2.9 percent in the city of Falls Church; was unchanged at 3 percent in Alexandria and unchanged at 3.2 percent in Loudoun County; and rose from 3.2 percent to 3.3 percent in Fairfax County. In Prince William County, the unemployment rate declined from 3.8 percent to 3.7 percent.

"Across Northern Virginia, March’s jobless rate of 3.4 percent in March was unchanged from a month before, with 1.53 million employed in the civilian workforce and about 53,600 looking for work. Statewide, the unemployment rate declined from 4.3 percent to 4.2 percent, based on non-seasonally-adjusted figures.

The Sun Gazette included the following chart, which enables readers to compare Arlington's employment situation to Norther Virginia's, Virginia's and the United States:

If you're wondering if Arlington's "lowest in the commonwealth" unemployment rate is filling-up all that commercial office space in Crystal City, Rosslyn, Ballston, and elsewhere in the county, the answer seems to be not very much, or at least not yet. Here are a few economic indicators from Arlington County's February 2016 economic indicators report (the March 2016 report has not yet been posted):

                                                February 2016     February 2015

At-Place Employment                      169,387              164,812

Gross Weekly Wages                        $1,545                 $1,513

Unemployment Rate

Arlington County                                 2.4%                    2.8%

Northern Virginai                                 3.2%                    3.7%

Office Vacancy Rate

Arlington County                                 20.1%                  21.7%

Northern Virgina                                  16.9%                  17.1%

It will be most interesting to watch how those vacancy rates change between now and next year since the Arlington County Board just gave Arlington's Economic Development (AED) department $1.5 million in the process of adopting the FY 2017 budget, according to the April 19, 2016 press release, and "will be used to focus on lowering the commercial vacancy rate to support the commercial real estate market in Arlington."

Apparently, the extra $1.4 million which the Arlington County Board invested in AED in the adopted FY 2016 budget last year wasn't sufficiently focused. According to the April 21, 2015 press release:

"The Board added $1.4 million to the Manager’s Proposed Budget to increase funding for economic development. $1,000,000 of that will be on-going funding, used to fund five new fulltime positions, support marketing activities, and expand support of the Columbia Pike Revitalization Organization. The rest will be for, travel, tourism, and TandemNSI, a public-private partnership to promote connections between Arlington-based high-tech firms and government."

We've growled several times regarding economic development in Arlington County. Our November 27, 2015 Growls includes links to a couple of Growls that provide more extensive information about economic development. The importance of a strong economy that filled that office space was pointed out to delegates of the Arlington County Civic Federation. In speaking to delegates on March 3, 2015, the chair of the county's economic development commission pointed out that reducing the vacancy rate to 10% would increase annual revenues by $34 million.

Growls readers who are concerned about economic development in Arlington County and how all vacant office space will be filled are encouraged to weigh-in with the Arlington County Board. Just click-on the link below:

  • Call the County Board office at (703) 228-3130

And tell them ACTA sent you.

UPDATE (4/30/16): Title changed from "The Jobs Situation in Arlington County."

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