Even with a “freeze” in effect, federal pay rose faster than private-sector pay in fiscal 2011, according to the USA Today’s Dennis Cauchon. Crunching Bureau of Labor Statistic’s data, Cauchon found that average federal worker wages rose 1.3 percent in 2011, or slightly more than the 1.2 percent increase in average private wages. The federal increase—while modest—occurred despite the freeze Congress and the president put into effect because increases from “longevity, merit, and promotions” were not covered, according to Cauchon.

I’ve argued that federal pay and benefits are excessive and should be cut as one of many needed reforms to rein in federal deficits. Lawmakers should extend the wage freeze, but they should also reduce overly generous federal worker benefits. For example, lawmakers should repeal the defined-benefit pension plan received by federal workers because it comes on top of the 401(k)-style retirement plan that workers already receive.

The good news is that increases in federal pay have slowed from the torrid pace of the early George W. Bush years, as shown in this chart. But we will need more reforms to start reversing-out the large federal pay advantage that has been built up over the last two decades. 

Recent actions against Fannie Mae and Freddie Mac by the Securities and Exchange Commission (SEC) also produced the standard reaction by GSE apologists. The New York Times’ Joe Nocera was quick to denounce the SEC, arguing that Fannie and Freddie were late to subprime. While I agree that the SEC case is likely a weak one, that, however, is for the opposite reason than Joe supposes. The reason the case is weak is that anyone with half a brain could read Fannie’s financial disclosures and determine they were doing subprime. Contra to Joe’s false claim that “Fannie and Freddie got into subprime mortgages, with great trepidation, only in 2005 and 2006,” the companies were both clear before then that they were involved in subprime. Since fact-checking doesn’t seem to be very important with Joe, you can start with my analysis.

The disagreements between Nocera and AEI’s Peter Wallison focus on the GSEs’ mandated housing goals. This is unfortunate and, even more importantly, besides the point. While I find the evidence that the housing goals helped to increase GSE credit risk convincing, I would be the first to say that such evidence is far from conclusive. But so what. Being leveraged over 200-to‑1, as was the GSE guarantee business, is a recipe for disaster regardless of credit quality. As even Democrat Phil Angelides admits in today’s WSJ, Fannie and Freddie “had a flawed business model in which profits were privatized and losses socialized.” That’s the real problem. If Nocera wants to argue that Fannie Mae was no worse than Bear Stearns, then I can live with that as long as we also apply the fate of Bear to Fannie. 

One has to give Nocera some credit. By painting the narrative as Fannie vs. Wall Street, when instead they were close partners, he has helped to preserve the current GSE model. By focusing on “the role of government” in housing, he moves the debate away from the reckless immoral behavior of Fannie and Freddie. He can claim this is about social policy and paint himself as a caring progressive, despite the massive regressive theft that Fannie and Freddie have actually been.

While I agree that having a better picture of the role of the GSE housing goals would be helpful, such an analysis should not delay the obvious: the hybrid GSE model is a failure. Let’s either have them be part of the government or truly be private (and suffer the fate of private failures). Whether Fannie and Freddie rank in one’s top 5 or top 20 causes of the crisis, they should have been ended a long time ago.

I’ve written before about whether California is the Greece of America, in part because of crazy policies such as overpaid bureaucrats and expensive forms of political correctness,

And we all know that California has one of the nation’s greediest governments, imposing confiscatory tax rates on a shrinking pool of productive citizens.

So it is hardly surprising that the Golden State is falling behind, losing jobs and investment to more sensible states such as Texas.

But not everybody is learning the right lessons from California’s fiscal and economic mess.

There’s a group of crazies who want to increase the top tax rate by five percentage points, an increase of about 50 percent. And they have made Kim Kardashian the poster child for their proposed ballot initiative.

I’m relatively clueless about popular culture, but even I’m aware that there is a group of people know as the Kardashian sisters. I don’t know who they are or what they do, but I gather they are famous in sort of the same way Paris Hilton was briefly famous.

And they have cashed in on their popularity, which may not reflect well on the tastes of the American people, but it’s not my job to tell other people how to spend their money.

But not everybody share this live-and-let-live attitude, which is why the pro-tax crowd in California produced this video.

I suppose I could criticize the petty dishonesty of the proponents, since they deliberately blurred of the difference between “tax rates” and “taxes paid.”

Or I could expose their economic illiteracy by pointing out that higher tax rates would accelerate the emigration of investors, entrepreneurs, small business owners, and other rich taxpayers to zero-tax states such as Nevada.

But I won’t do those things. Instead, like the Nevada Realtors Association and Arizona Business Relocation Department, I’m going to support this ballot initiative.

Not because I overdid the rum and eggnog at Christmas, but because it’s good to have negative role models, whether they are countries like Greece, cities such as Detroit, or states like California.

So here’s my challenge to the looters and moochers of the Golden State. Don’t just boost the top tax rate by five-percentage points. That’s not nearly enough. Go for a 20 percent top tax rate. Or 25 percent. After all, think of all the special interests that could use the money more than Ms. Kardashian.

And if somebody tells you that she will move to South Beach or Las Vegas, or that the other rich people will move to Texas, Wyoming, or Tennessee, just ignore them. Remember, it’s good intentions that count.

In closing, I apologize to the dwindling crowd of productive people in California. It’s rather unfortunate that you’re part of this statist experiment. But you know what they say about eggs and omelets.

By the way, here’s some humor about the Golden State, including a joke about the bloated bureaucracy and a comparison with Texas.

Roger Pilon has been doing good, quick work on New Gingrich’s pronouncements on the role of the judiciary in interpreting the Constitution. (Roger read Newt’s 54-page “white paper” so you don’t have to!)

I have nothing to add to that assessment of the former House Speaker’s legally questionable and politically unwise views. Instead, I want to share a snippet from this lighter take by Mark Steinberg:

The Supreme Court today held that the United States Congress is unconstitutional and must vacate the Capitol no later than January 1, 2012.

The 8–1 vote followed closely on the heels of statements by Newt Gingrich, now leading the race for the GOP presidential nomination, that as president he would ignore decisions by the courts if he was having “a really bad day”; that Congress should have the power to subpoena and impeach federal judges whose jibs the legislators found un-seaworthy; and that the judiciary is “a twig on the governmental tree that the president and Congress can prune and burn in the backyard.”

The piece reads like something from The Onion.

Funny, when I heard that Gingrich was discoursing on the law, I thought he’d be proposing the appointment of sentient robots to be our judicial overlords…

Happy Holidays, everyone!

Many, if not most, of the stated goals of the Democratic Party have universal appeal in the United States. Foremost among those would be reducing poverty and ensuring that every child has access to a high-quality education.

The problem with the Democratic Party today is that its leadership seems not to understand the kinds of policies that will achieve those goals. Instead of finding out what works and implementing it, they simply call for new government programs on the assumption that those programs will work (or, if you’re jaded, on the assumption that doing so will get them re-elected).

It wasn’t always like that. There was a time when one of the most prominent Democrats in the nation was so deeply committed to these goals that he was willing to advocate the policies that would achieve them—special interests be damned.

Scott Walter has a little of that story at Philanthropy Daily.

To plagiarize Instapundit: more like this, please.

The annual unveiling of its “Lie of the Year” award garners PolitiFact more attention than anything else. Hopefully, it will garner so much attention that people will recognize this award, which is supposed to improve political discourse, instead degrades it.

PolitiFact’s past three Lies of the Year have been about health care. Not one of them was a lie.

A lie is when a speaker says something that he knows or believes to be false, for the purpose of deceiving others. None of these supposed Lies of the Year even met the threshold test of being false. The first two—“death panels” and “ObamaCare is a government takeover”—were actually, demonstrably true.

The third and latest Lie of the Year—that “Republicans voted to end Medicare”—is arguably true: its veracity depends on what your definition of “Medicare” is. To seniors, Medicare means “the government helps me pay for health care.” The House Republicans’ budget (a.k.a., the Ryan plan) would not end such federal assistance, and would arguably improve access to quality health care. To the Left, “Medicare” means the particular way the federal government helps seniors access health care: a single-payer system. The Ryan plan would end that single-payer system. My leftist friends are right and PolitiFact is wrong: from a certain and valid perspective, this claim is true.

Moreover, even if these three statements were false, the speakers believed them to be true. Therefore, they cannot be lies. Every single Lie of the Year award has gotten that basic fact wrong.

In the process, this award degrades political discourse by implicitly launching—an encouraging others to launch—ad hominem assaults on people who hold legitimate differences of opinion. PolitiFact should find a better way to attract readers.

I have been writing about the flaws in PolitiFact’s business model for some time:

• Just Call Me Liar of the Year
• Why I’m Boycotting PolitiFact
• PolitiFact Just Asked Me to Be a Source, Again. I Declined, Again.
• PolitiFact Just Called, Again. I Declined to Help, Again.

I’m glad to see my friends on the Left have taken notice, though I regret the way it happened.

Earlier this year, the Cato Institute published this paper, which describes the self-flagellating nature of the U.S. antidumping law. Nearly 80 percent of all U.S. antidumping measures imposed between 2000 and 2009 (130 of 164 measures) restrict imports of intermediate goods—inputs required by U.S. producers for their own production processes.

Antidumping duties on magnesium, polyvinyl chloride, and hot-rolled steel, for example, enable petitioning U.S. companies that often dominate domestic supply of raw materials to foreclose alternative sources and then thrust higher prices on their U.S. customers. But those customers—U.S. producers of auto parts, paint, and appliances—who consume the now-restricted raw materials to produce higher value-added goods and who might otherwise create jobs, are instead made less profitable and less competitive, burdening the broader economy.

But here’s the kicker. The statute itself forbids the administering authorities from considering the economic impact of antidumping restrictions on those firms or on the economy at large. The well-being of the petitioning industry is all that matters and the collateral damage to downstream industries and the overall economy is to be ignored.

Now, the high-profile antidumping and countervailing duty cases recently initiated against solar panels from China are shining some fresh light on this outrage. A group called the Coalition for Affordable Solar Energy (CASE), which represents the portion of the U.S. solar industry that is downstream of the solar panel producers (the producers’ customers), is asking the cases be dropped or settled. CASE, representing 145 member companies that employ over 14,000 workers in solar project development, logistics, construction, and installation, argues:

The severe tariffs [being sought] would have a very damaging effect on the solar industry in the United States and would fundamentally undermine many years of effort by all of us who care about the future of solar power …

In simple dollar terms, [the] petition threatens the planned installation of solar electric power systems in the amount of $11 billion in 2012 and the potential installation of $60 billion currently in the total pipeline …

By asking government to interfere and artificially increase the price (equivalent to putting on a high tax) will only hinder the deployment, cost thousands of jobs … and further negatively impact an already shaky economy.

There is no good reason for arguments like these—and the facts supporting them—to be ignored in trade remedies cases. Several other major countries that have antidumping and countervailing duty laws on their books employ a so-called public interest provision that directs the authorities to deny duties when the likely costs are demonstrated to exceed any benefits to the petitioning industry. (See page 18 for an elaboration.)

It is difficult to fathom how an administration that begs U.S. businesses to invest and hire would not be pushing hard for this particular reform. After all, the administration acknowledges the importance of ensuring downstream producers have access to imported inputs. The Office of the U.S. Trade Representative has argued this point in its complaint against Chinese export restrictions at the World Trade Organization. And the president himself described how the competitiveness of U.S. firms is hurt by restrictions on imported inputs when he signed into law the Manufacturer’s Enhancement Act last year.

But then again, incongruities in this administration’s economic policies seem to be the rule, not the exception. In the solar panel case, the president has offered his rhetorical support (at least) to the petitioners, even though their success would drive up the cost of already-too-expensive solar power, reducing demand for an energy source the president has been advocating and subsidizing with the incentive of 30 percent tax credits.

I suppose the White House has determined that the cost of import duties—to consumers up front and to taxpayers through the a much higher tax credit—is worth the benefit of having a Chinese scapegoat to take the heat off the president for Solyndra’s failure.