Money And Politics, New York Edition

A big election is only a month away.  Here in New York, the Governor, Comptroller, Attorney General, and the entire state legislature are up for election.  Needless to say, nothing of what I consider important is getting any mention whatsoever.  

The big issues, without question (not in any particular order) are (1) way overspending on K-12 education, almost double the national average per pupil, for far worse results, (2) way overspending on Medicaid, again almost double the national average per beneficiary, with no measurable benefits in life expectancy or any other metric, (3) unsustainable pension promises, and (4) thoroughly incompetent housing meddling leading to artificial shortages and a huge population trapped in "poverty" despite living in housing that costs the taxpayers a multiple per year per beneficiary of what is said to be the poverty level.

We are the highest taxed jurisdiction in the country, and everybody seems to believe that it's because we provide lots of services that other places don't.  Actually not.  Instead, we spend far more money to provide the same services, but of worse quality.  You would think that that would be a gigantic issue in the upcoming election. 

I'm not meaning to be too critical of the Republican candidate for Governor, who is Rob Astorino.  He is a serious and hard-working guy, and doing his best in a tough situation.  But his message is getting completely drowned out in a campaign where the other side has an unbelievable money advantage, highly illustrative of the powers of incumbency in our state where an activist government meddles in everything.

The State Board of Elections publishes information on the fundraising and spending of the two campaigns.  The two reports for the Astorino campaign indicate that he has raised a total of under $5 million for the campaign -- and this is a rather large state.  Currently he has $1.2 million cash on hand going into the last month of the campaign.   Cuomo has raised at least $43.6 million.  Cuomo's list of major donors contains one after another of the large government employee unions and unions (like health care workers) whose jobs are government-funded:  Patrolmens Benevolent Association, Sergeants Benevolent Association, Emergency Medical Services Local 2507, Service Employees International Union, Uniformed Fire Fighters Association, Transit Workers Local 100, etc., etc., etc.  Funny, but I can't find a single union contribution (even private sector) to Astorino down to contributions of as little as $2000.

But that piece of the money advantage is only the beginning.  In a serious contrast from anything I recall from past elections, Cuomo has been completely shameless in spending vast sums of taxpayer money right in the middle of the election cycle to promote his signature programs, and thus to keep himself in the public eye.  According to Capital New York here New York State has spent no less than $161 million during Cuomo's term promoting "business and tourism," large amounts of that prominently featuring the Governor's signature programs with which he has gone to great lengths to be sure his name is associated.

Exhibit A of this vast taxpayer spending in support of Cuomo is something called Start UP NY.  The program is classic New York crony capitalism.  The idea is that if you move a business to New York you can get a ten year exemption from all state taxes.  This has been Cuomo's signature economic development initiative, and he has invested gobs of his time associating his name with it.  For example, here is a video of Cuomo speaking at Cornell University to kick off the Start UP NY initiative.  According to the Capital New York article, no less than $28 million of taxpayer money has been spent on the Start UP NY advertising campaign, recently averaging $5 million per month.  This represents almost as much as Cuomo has spent on his re-election campaign during this period, and a multiple of almost 6 times the total that Astorino has raised.  These taxpayer-funded ads flood the airways every evening, shamelessly promoting the Governor's signature project in the midst of the election contest.  So good luck with your $1.2 million, Rob.

To those who continue the campaign to "get money out of politics" (New York Times? Larry Lessig?  Harry Reid?) I ask, what is your plan to deal with the problem of incumbents causing the government to spend vast amounts of taxpayer money in support of the incumbents and of the ongoing growth of the government?  When you drive all other money out of politics, that will be all that is left, with nothing to counterbalance it.

What's the chance that Cuomo's Start UP NY initiative will have any measurable positive impact on the distressed economy of upstate New York?  I would say about zero.  The various sorts of crony-capitalist initiatives that governments have made to bring business to distressed areas have a history of total and abject failure.  Here is a roundup on the subject by Steve Malanga in the City Journal back in 2005.  From urban renewal to urban development action grants to urban development corporations and in every major city across the country, government initiatives to promote business have uniformly made the situation worse.  By contrast, when New York City's government started focusing on controlling crime and (somewhat) controlling spending and taxes, we suddenly got a massive economic revival in the formerly depressed parts of Brooklyn and Queens, Harlem and the Bronx, almost entirely with private capital.

But Start UP NY is not really about economic revival.  It's about getting lots of taxpayer-funded support for Cuomo's re-election.  Oh, and to the extent that any companies actually move into these tax-free zones, they will be totally dependent on the government program to continue their existence when their tax exemption runs out.  That will be a great source of political contributions!

The best news I can find on the money-in-politics front in New York is that at least one group of players has figured out the game.  According to an article in Chalk Beat back in January, supporters of charter schools had contributed at least $800,000 to the Cuomo re-election even by that date, far outstripping his contributions from the teachers unions.  Actually guys, that was rather strategic! 

Obamacare Review

Time to check in again on Obamacare.  We all know that this grand piece of social engineering is supposedly the cure for the "crisis of the uninsured."  The provisions have mostly fully taken effect as of the beginning of this year, most particularly the so-called "individual mandate."  That'll teach those recalcitrants who won't buy what the government wants them to buy!    So I guess pretty much everyone now is insured, right?  Well, let's see if we can find the answer to that question.

There turn out to be multiple sources giving not-completely-consistent information.  For background, according to figures from the Census Bureau here,  in 2000 at the end of the Clinton administration the rate of uninsured in the United States was 13.7% and the number of uninsured was 38.4 million; and at the end of the Bush administration in 2008 the rate of uninsured was 15.4% and the number of uninsured was 46.3 million.  The latest information from multiple sources is as follows:

• The Census Bureau has just issued a report this month (September) titled "Health Insurance Coverage in the United States: 2013."  That's right, it only goes up to the end of last year.   According to a "Highlights" section on page 2, the rate of uninsured in 2013 was 13.4% and the number of uninsured was 42.0 million.  Does that represent some progress that can be attributed to Obamacare?  Oh wait, they changed their methodology from previous surveys, and now the question asks only whether you lacked health insurance for the entire year, as opposed to the old methodology, where the question was whether you lacked health insurance for any part of the year.  Why do I have the strong sense that that change is an intentional scam to drive down the number in the "uninsured" category to make Obamacare look good?  And yet that number has still only gone down marginally, at least by the end of 2013.   And how much of the change would have happened anyway in a (slowly) improving economy?
• Gallup has been doing surveys on a quarterly basis.  As I noted in a previous post, because the Census data is so untimely and of inconsistent methodology, HHS itself has been relying on numbers from Gallup.  In July Gallup released the results of a poll covering 2Q 2014, and reported that the rate of uninsured was 13.4%, constituting just over 42 million people, representing a decline from a 17.1% rate at the end of 2013.
• Transamerica Center for Health Studies has come out in September with a report titled "One Year In: Americans Respond to the Affordable Care Act."   This report gives the percent uninsured as of July 2014 as 15%, which would be about 47.2 million people.  To be fair, their methodology showed the percent uninsured at the end of 2013 as 22%, while Gallup had 17.1% and Census had only 13.4%.  But they don't tell you enough about the methodology to reconcile the discrepancies.  They do attribute almost all of the decline in uninsured to a rise of five percentage points in "public insured," i.e. Medicaid.

Forgive me, but I am completely underwhelmed by these numbers.  Back in the Bush administration, I listened to a constant drumbeat of activists asserting that the numbers of uninsured in the United States represented a desperate crisis.  Among hundreds of examples, who can forget the Institute of Medicine report from 2009, in the run-up to the passage of Obamacare, titled "America's Uninsured Crisis: Consequences for Health and Health Care"?  That report from the supposedly neutral IOM contained the following over-the-top rhetoric:

The growing number of uninsured Americans--totaling 45.7 million as of 2007--is taking a toll on the nation's health. One in five adults under age 65 and nearly one in ten children are uninsured. Uninsured individuals experience much more risk to their health than insured individuals. In its 2009 report America's Uninsured Crisis: Consequences for Health and Health Care, the Institute of Medicine points to a chasm between the health care needs of people without health insurance and access to effective health care services. This gap results in needless illness, suffering, and even death.

"Needless illness, suffering, and even death."  We must pass a law mandating that everyone is required to buy health insurance!!!  Well, we passed the law, and if you believe the Transamerica numbers, the number without health insurance today is about 47.2 million, which is up from the 45.7 million cited in the IOM study for 2007.   For this the government took over one-sixth of the economy?  For this we concede to the government the right to tell us what treatments we can and can't have?  For this we accept new layers of complexity in our taxes.  For this, we give the government access to all of our health records?

Oh, and then there's the cost.   For that we turn to Lahnee Chen of Bloomberg News on September 26, summarizing a report from Bloomberg Government on September 24.

The study found that federal spending on Obamacare and related legislation has far exceeded anyone’s estimates (or imaginations). To date, the report concludes that the health-care law has cost taxpayers $73 billion. And that number doesn’t include projected spending on the law’s Medicaid expansion, which if included would bring costs to more than $90 billion. The study’s estimate is even higher than the Congressional Budget Office’s “high” cost projection for the law -- $71.2 billion by the end of 2014.

But wait, that's only spending to date.  How does it look going forward?

This is only the tip of the iceberg when it comes to spending on the coverage provisions of the Affordable Care Act. The Bloomberg study reveals that only about 20 percent of the $73.5 billion that has been spent on the health-care law thus far can be attributed to the law’s premium subsidies. CBO has estimated that the subsidies are expected to cost more than $650 billion through 2019, with the Medicaid expansion accounting for a minimum of $350 billion in additional spending.

In other words, over $100 billion per year in additional spending, and all to achieve maybe a handful of percentage points of reduction in the rate of uninsured.  That would be about $10,000 per year per person newly insured, or $40,000 for each family of four newly insured.  Nobody has a Cadillac health plan that expensive.  And mind you, it's not that these people weren't previously getting treated when they got sick.

Well, Obamacare has achieved one thing.  And that is that somehow the "crisis of the uninsured" seems to have gone away.  In 2009 45.7 million uninsured was somehow a desperate crisis, but in 2014 47.2 million uninsured somehow is no longer a crisis at all.  At least I can't find anyone saying it is.  Certainly not IOM.  The only difference I can see is that meanwhile the bureaucracy got an extra hundred billion or so of annual taxpayer money to play with.

Poverty: It's Worse Than You Think

No, I'm not talking about actual poverty in that title.  I'm talking about the poverty scam, by which the government creates fake numbers to deceive the public into believing that a large percentage of the population lives in a state of physical suffering and deprivation despite a trillion dollars a year of government anti-poverty spending.

Last week, along with my excellent summer research assistant, I interviewed a Census Bureau official to get some more detail on the methodology by which the government's "poverty" numbers are compiled.  The official who agreed to be interviewed was the Chief of the Poverty Statistics Branch.    This is the person in charge of preparing the "poverty" portion of the government's reports on income and poverty, for example this one covering 2013.  I won't name names here, but the name can be found easily with a little Googling.

Throughout the government reports -- that 2013 report linked above being a good example -- they refer to the thing they are measuring as "economic well-being."  But the more you learn about what they do, the more you realize that, at least in the bottom rungs, these reports have little or nothing to do with economic well-being.  They have only to do with one concept, "cash income," a completely artificial construct of their creation that has been designed so that government spending can never cause the poverty rate to go down.  The whole game is systematically to exclude so many things that the poverty rate will remain high no matter what resources the people may have available to support themselves.

Thus, we verified that in calculating "poverty," they systematically exclude all government in-kind benefits, from housing to food stamps to Medicaid to energy assistance.  And they systematically exclude negative tax payments, like the EITC.  And they systematically exclude capital gains.  And they systematically exclude scholarships.  And loan proceeds.  And support from family members.  But those things were already obvious.  Not so obvious were these things:

• They have no idea whether they are capturing much or any of the vast amounts of off-the-books and illegal income in this country.  They take whatever answer a person gives as to his or her household income, without any sort of follow up or double check.  Various estimates put the size of the U.S. underground economy in the range of $2 trillion,  or about 12% of the economy.   Here is such an estimate from a University of Wisconsin study in 2011.  If even a small fraction of that amount goes to the population reporting itself "in poverty," it would hugely swing the numbers.  I can't imagine that any but a very small fraction of the underground economy is counted by the Census in its measure of "poverty."
• They make no effort of any kind to take existing assets into account.  In the surveys that determine "poverty" status, they don't even so much as ask about savings or home equity or business ownership.

We were referred to a recent report, issued January 2014, titled "Dynamics of Economic Well-Being:  Poverty, 2009-2011."  This report contains some information that emphasizes once again that the thing they are calling "poverty" has little or nothing to do with your conception of "poverty."

The "Dynamics" report comes out of a survey called the Survey of Income and Program Participation, which is a different survey from the American Community Survey and Current Population Survey that are the usual basis for the government claims as to "poverty."  Unlike the ACS and CPS that just take people's answers to questions on a one-time basis, the SIPP seeks to track a sample of some 25,000 people over a multi-year period.  Here are their first two "highlight" conclusions:

• Over the 36-month period from January 2009 to December 2011, 31.6 percent of the U.S. population was in poverty for at least 2 months, an increase from 27.1 percent over the period of 2005 to 2007.
• The percentage of people in poverty all 36 months from 2009 to 2011 was 3.5 percent, an increase from 3.0 percent over the period of 2005 to 2007.

Read that and you realize that what they're talking about has to be something completely different from what you think about as poverty.  Sure some people live paycheck to paycheck and get laid off from their job and are in a real spot.  But the large majority with brief periods of no paycheck have resources to fall back on, in many cases substantial resources.  31.6% of the population is a huge number that can't possibly have any real relationship to actual hardship.  Are they really counting actors between movies as "in poverty" for two months?  College kids with non-paying summer jobs?  Does the interval between your last paycheck from work and your first social security check count as "poverty" even if you have a million dollars in the bank?  These numbers cannot make sense unless the answers to those questions, and a lot more similar ones, are yes.

And along the same lines, please check out William Benson Huber's op-ed in today's New York Post, finally casting some light on the food insecurity scam.   Huber points to the endless "public service" ads by an organization called Feeding America claiming that one in five American children don't have enough to eat.  As previously pointed out many times on this blog (for example, here), such numbers come from the thoroughly fraudulent Department of Agriculture "food insecurity" surveys, that have nothing to do with hunger or even food deprivation.  As Huber points out, the actual number of American families that have any member miss even one meal during a year is only one out of one thousand.  So what is Feeding America up to with its endless ads?

Well, the motive here isn’t remotely altruistic. Forbes magazine lists Feeding America as the fourth-largest nonprofit in America.  And, as Paul Roderick Gregory notes in a Forbes column, the group’s “CEO earns over a half million dollars.  Its corporate sponsors represent America’s largest agribusiness companies, food processors and retailers (Conagra, Food Lion, General Mills, Kelloggs, Kroger, Pepsico and Walmart).”  If you make or sell food, you want to inculcate brand loyalty at the youngest age possible. And to get the public thinking we’re still not spending enough on food — never mind that 35 percent of poor kids are obese.

Yes, it's far, far worse than you think.

New York, The Home Of Crazy Housing Policy

In the private sector, when you fail you go out of business; but in the public sector failure is the springboard to argue that the taxpayers aren't giving you enough money and to try to get more.  New York housing policy provides some extreme examples of this phenomenon.  We're now about four generations into trying to cure a housing "crisis" through government actions that include rent regulations, extensive public housing, subsidies through a dizzying variety of different programs, onerous housing codes and inspection systems, and on and on.  And somehow the remaining "market" housing turns out to be the most expensive in the country.  Nobody seems able to look outward at places like Houston or Phoenix or Las Vegas with little to none of such programs, lots of construction, and much lower free market prices, as well as far better housing options for the low-income population.

Our new City Comptroller Scott Stringer looks to be trying to make a name for himself in this double-down-on-failure game.  Back in April he came out with a big report titled The Growing Gap: New York City's Housing Affordability Challenge.  It seems that that one didn't get the play he was hoping for, so he has just come out with another one, largely rehashing the first, titled  How New York Lives: An Analysis Of The City's Housing Maintenance Conditions.   Cutting to the heart of these reports, the big news is that the public and rent-regulated housing in New York City are in far worse condition than the free-market rentals and the owner-occupied housing.  Now there's a shocker!  And not only that, it's getting worse.  Consider these finding as to the low income public housing units under the jurisdiction of the New York City Housing Authority (home to about 500,000 people, or about one-seventeenth of the population):

• In 2002, 60 percent of public housing apartments had at least one deficiency.  By 2011, 79
percent of public housing apartments had at least one deficiency.

• Water leaks, a key element of a recent tenant-filed federal lawsuit, also rose substantially.  In 2002, water leaks were observed in approximately one-fifth of NYCHA apartments. By 2011 that percentage was nearly one-third.

• The number of units with broken or missing windows increased 945 percent from 2005 to 2011.

• From 2005 to 2011, rodent observations increased 12 percentage points, with over 36 percent of NYCHA apartments experiencing this condition in 2011.

• From 2008 to 2011, heating equipment breakdowns increased by 72.8 percent and units with broken plaster and peeling paint increased by 111 percent.

Well, there's nothing like socialized housing to improve the lives of the people!  The September report lacks an explicit plea for the big bucks, but consider this from the April report:

In recent City Council testimony delivered by Chairwoman Shola Olatoye it was noted that
NYCHA needs approximately $18 billion dollars to bring all of their developments to a state of good repair.

Eighteen billion?  No problem, we can get that by, say, shutting down the school system for an entire year.  Since I don't foresee that happening, what I do foresee is continued decline for the properties of the NYCHA.  The chance that government functionaries will ever adequately maintain the properties is about zero, and it really doesn't matter how much money they have to do the job.  If you can do the job adequately on your current budget, what's the argument for getting a bigger budget?  And without a bigger budget, how are you going to be able to hire yourself five assistants and a chauffeur?  The whole idea is to fail, and without a doubt they will fail and continue to fail.

Of course there is a way to get the current public housing stock maintained at no cost to the taxpayers.  That is to give  the projects to the current residents.  As owners, I predict that the residents will magically maintain their properties without cost to the taxpayers, just like the other housing owners do, in order to enhance their property values and make money on sale.  Oh, and by the way, we will have created several hundred billion dollars of housing value out of thin air -- value that today is suppressed by the lack of private ownership of the properties.  And we will also have removed hundreds of thousands of people from poverty.  More on that in future posts.

But anyway, in the category of housing policy craziness, we have an even crazier one out this week.   Something called the Fiscal Policy Institute has proposed a new property tax to apply only to residential properties of market value higher than $5 million and only when the property is not the "primary residence" of the owner.  FPI estimates that there are 1556 such units in the City.  Its proposed tax would be on a sliding scale, where property value between $5 and 6 million would get 0.5% of full fair market value per year additional tax, up to 4% additional tax on value above $25 million for the unit.  FPI, which assumes that all of these people are too dumb to take evasive action, calculates that the tax will raise $665 million per year, of which 83%, or $551 million will be paid by just 445 people at the rate of $1.2 million average per year each.

This idea arises out of the noticeable building boom going on in Manhattan of super high end condos, many selling for $5 million and up, of which, according to FPI, approximately half are purchased by non-City residents as part-time pieds-a-terre.   OK, but do we really believe that this handful of people is going to fork over an average of $1 million or so each per year for the privilege of owning this part-time pad?  The reason that New York has been attracting this market in the first place is precisely that its property taxes are moderate compared to the international competition.  At this level of gouging, why won't those Russian oligarchs go to Rio or Hong Kong?  And nobody seems to counting for anything the salaries of the construction workers and salespeople and the like that will go away when the building boom gets killed off.  It's not clear to me at all that this tax will even be a net positive in revenue when all is taken into account.

But needless to say, the City Council and State Legislature are panting with excitement with this opportunity to "get" these non-voting rich people.  Already, a resolution has been presented in the City Council, and a bill in the Legislature.  And who, you may ask, are the legislators presenting these items?  Why, none other than my own representatives, City Councilman Corey Johnson and State Senator Brad Hoylman.   Of course, these are the guys from the wealthiest districts in town, Greenwich Village and Chelsea.  Proving once again my proposition that the people who are most consumed with jealousy for the top one percent are in fact percents 97 and 98.

Obama Becoming A Laughingstock On Climate Change

After our big climate march here over the weekend, our President came to New York yesterday, supposedly to deal with other world leaders to solve the "climate crisis" and save the planet.   The New York Times tells the story today in a big front page article headlined "Obama Presses Chinese to Move to Curb Warming."

President Obama, emboldened by his use of executive powers to fight climate change at home, challenged China on Tuesday to make the same effort to reduce its greenhouse-gas emissions and join a worldwide campaign to curb global warming.  Declaring that the United States and China — the world’s two largest economies and largest polluters — bear a “special responsibility to lead,” Mr. Obama said, “That’s what big nations have to do.”

Could this whole thing have been more embarrassing?  President Xi of China (number one emitter of so-called "greenhouse gases") did not show up.  Neither did new Prime Minister Modi of India (number 3 emitter).   Same for Putin of Russia (number 4 emitter); Putin is a climate skeptic (this guy is no dummy, unlike others mentioned in this post).   Merkel of Germany (number 6 emitter and first in the EU)?  Absent.  (Here is a list from Wikipedia of total and per capita emissions by country.)

In countries with smaller populations but high per capita emissions, we have Australia, the champion of per capita emissions.  Its Prime Minister, Tony Abbott, did not attend.  Neither did Stephen Harper of Canada, number 3 in per capita emissions after Australia and the U.S.  Oh, Australia just repealed its carbon tax.  And Canada?  They are madly developing their tar sands reserves, and planning to ship the oil by pipeline to the Pacific for export to Asia, since Obama will not approve the Keystone pipeline.

Of leaders of the top emitters besides Obama, only Prime Minister Shinzo Abe of Japan (number 5) attended.  He said that Japan "is considering making an appropriate contribution" to a so-called Green Climate Fund.  That's powerful Shinzo!  Definitely don't try to pin him down on any specific amounts.  Also, he discreetly declined to mention that Japan shut down all 48 of its nuclear reactors after the 2011 earthquake and replaced all of that power with hydrocarbons.  Currently, they have set no timetable for restarting the nukes.

It seems that the New York Times style manual prescribes that despite the ridiculousness of the situation, it must be treated in the Grey Lady with the utmost seriousness.  The article by Mark Landler and Coral Davenport doesn't show even a touch of humor.  For example, they have extensive quotes from a guy named Zhang Gaoli, the Chinese flunky sent to stand in for Xi.  In one such quote, Zhang says that "his country would try to reach a peak level of carbon emissions 'as early as possible.'"  Don't crack a smile!  Do you realize how that came out, Zhang?  The guy may need to do some work on understanding the nuances of the English language.

Any reasonable press coverage would treat this as the huge embarrassment that it is, but we don't have that kind of press.  And even if the only sarcasm that Obama must endure is from the Manhattan Contrarian, why would he do even that?  Well, the answer is simple:  This is not really about getting international agreements to save the planet.  It's about raising money to keep the Democratic Party in power in Washington for another election cycle.

Don't believe me?  You won't find this in the Times, but according to an article today in the Guardian,

After a day of set-piece speeches by leaders including Barack Obama that yielded little in the way of new commitments, world leaders were supposed to meet over dinner to discuss climate change, and engage in “soft diplomacy” to iron out differences ahead of crunch negotiations on a new global climate agreement.

And who didn't show up for that one?  Barack Obama.  He was "a few blocks away [from the dinner] at a party in the Waldorf-Astoria."   Raising money, of course.

Still Getting Economic Policy 180 Degrees Wrong

In economic policy, there is one big question, which is, to improve the economy, should the government spend more or should it spend less?  Obviously these two things are the opposite of each other, and both can't be right.  If one is right, the other is wrong, and indeed destructive.

To decide the right answer, we can look out into the real world for evidence of what works.  And there we find the absolute champion of fiscal discipline, where government spending is well less than 20% of GDP, namely Singapore.   Singapore has averaged 5.28% annual growth of GDP since 2007 (a period that includes the financial crisis) and has unemployment of around 2%.   There is an abundance of jobs for young people.

At the other end of the scale, where government controls absolutely everything, we have Cuba and North Korea.  The people starve.  And of course there's the blow-out spending champion, claiming to "help" its people with every kind of handout and the most massive government housing program ever attempted -- Venezuela! How's that going?  Well, it seems that Venezuela has $5,3 billion of bond payments due in October, and it can't pay both those and also for its imports of food and consumer goods.  So as it saves up money to pay the bondholders, everything is disappearing from the stores.  There is a "massive default on the country's import chain."  From Bloomberg News on September 8:

With foreign reserves at an 11-year low and arrears to importers growing, Venezuelans are struggling to find everything from basic medicines to toilet paper. And prices are surging on the goods that they can buy, saddling the country with the world’s highest inflation rate.  The nation’s bonds are sinking as President Nicolas Maduro fails to stem the crisis, extending declines today.

And in Europe, where government spending hovers around or even above 50% of GDP for almost all countries, the economies languish.  OK, Switzerland does very well; but its government spending is well below that of all its neighbors, at about 34% of GDP.    Really, this is not all that complicated.

Enter the UN, OECD and World Bank.  These are the grand know-it-alls purporting to tell the governments of the world what to do.   The three have just come out with a big joint Report prepared for something called the "G20 Labour and Employment Ministerial Meeting" that took place in Melbourne, Australia on September 10-11.  And what solution do these grand know-it-alls propose for the world's economic woes?  You guessed it -- higher government spending. 

OK, their recommendations are couched in nearly impenetrable doublespeak.  Try this:

In conclusion, the current situation calls for strong and well-designed employment, labour and social protection policies to address both cyclical and structural challenges, applied in conjunction with supportive macroeconomic policy mixes. The effectiveness of such policies would greatly increase if actions are taken collectively at the G20 level in a coordinated manner.

The "supportive macroeconomic policy mix" thing is their code for more government spending.  And then, pay particular attention to that last phrase, which demands that "actions [be] taken collectively at the G20 level in a coordinated manner."  Translation:  none of you are allowed to cut spending and prove us wrong by outperforming the rest of us.

The New York Times jumped right in on September 20 to parrot the line of the international organizations.

The report is clear that when consumption and investment wane, government is supposed to make up the shortfall to revitalize the economy.

Well again, the options are increasing government spending and cutting government spending.  Both can't be right.  In one direction lies Singapore and Switzerland, and in the other Venezuela, Cuba and North Korea.  Turns out that all of the UN, OECD, World Bank and New York Times favor the direction of Venezuela, Cuba and North Korea.  No surprises there.  But how could such seemingly authoritative people be so completely and utterly wrong on something so important and so obvious?  Got me.