This page has been archived and commenting is disabled.
Snow Day Gridlock
From The Daily Capitalist
I read where the government claims that because Washington D.C. was practically shut down by Snowmageddon we taxpayers were losing $100 million per day from lost productivity of federal employees. Then in an unrelated matter I see where Evan Bayh announced he will not run for re-election as senator from Indiana because the lack of bipartisanship between Democrats and Republicans resulted in legislative gridlock ("the peoples' work is not getting done").
The thought that our bureaucracy was shut down for almost 4 days actually was kind of promising. Nothing getting done in my view is a good thing. It's easy to be snide about this, and I am sure it caused problems for those waiting for their check to arrive, but the thought of 230,000 D.C. employees not working could arguably result in more productivity in the private sector if these bureaucrats were thwarted from their regulatory duties.
Doug Bandow at the Cato Institute ridicules the idea that we taxpayers were set behind $300 million because of loss of federal employee "productivity" during the snow seige.
Using the term "productivity" in the same sentence as "federal government" is a dubious exercise. No doubt, in the sense of performing a task efficiently, the Feds can be productive. Just watch how quickly and completely the IRS attempts to clean out the average taxpayer. That explains the joke about Washington's preferred tax form of just two lines: "How much do you earn? Send it in."
But government efficiency doesn't mean productivity in a larger sense. That is, does government activity yield a better life for Americans? On net, the answer is no. The only problem with Snowmaggedon is that it has not affected the 85 percent of federal employees who work outside of the D.C. area.
About two million people, excluding the postal service and armed forces, work for the federal government. Most are engaged in counterproductive activity.
This is the first definition of the positive benefits of gridlock.
The ability of the Republicans to filibuster Democrat legislation and the prospect of a resurgent Republican presence in Congress after November is another definition: legislative gridlock.
You may not agree with my take on the benefits of government, but as an investor you should cheer. This report from Money Morning says:
What [our research] demonstrates is that the stock market’s highest performance (a 9.6% growth per annum) occurs when there’s the most political turmoil - in short, a Democratic president and a Republican Congress.
That suggests a finding that’s so surprising we weren’t sure we believed our eyes either: The Dow Jones Industrial Average Index logs its biggest net gains with a donkey in the White House and elephants traversing the halls of the U.S. Capitol Building.
Another interesting conclusion suggested by our own research, and that of other firms such as Ned Davis, is that in stark contrast to what most investors believe to be true – that Republicans are better for the markets – is that the blue-chip-dominated Dow tends to rise nearly twice as fast during Democratic presidencies (7.2%) as it does during Republican ones (3.8%).
The great equalizer, if there is one, appears to be inflation, which rapidly eats away the higher returns to bring them within a few basis points of each other over time.
People assume that a presidential administration and Congress with matching political affiliations is the best way to get things done, but in reality, the checks and balances of a mismatched pair helps to ensure that governmental agendas don’t go to extremes. Thus, somewhat surprisingly, political gridlock is actually a reality that puts investors at ease and permits the financial markets to operate efficiently.
I think this conclusion is accurate. Other studies (Financial Analysts Journal (Sept/Oct 2006)) suggest that small firms do better when there is political harmony. But the FAJ study doesn't match up with the above conclusion because they didn't specify which party held the White House and which held Congress. Money Morning says there is a correlation with a Democrat president and a Republican Congress.
One could say that if the Republicans take Congress and the result is gridlock, the stock market will do well. For business people it means less uncertainty and that means you can plan ahead without worrying about new legislation that may affect you.
Let it snow.
»
- advertisements -
This time it's different. As everyone realizes that this growth has been all a mirage, we'll be faced with a crisis where gov't will need to act fast and because of this gridlock, it won't.
Only when the world was falling apart (circa 2008) would politicians come together but by this point, it might be too late.
I must point to China in this case. While they might have gone about the long term solution incorrectly (we'll soon find out) they are the only major economy that is growing at a robust rate. I think a large reason why is because the gov't acted quickly and sh%t got done. Stimulus was administered by banks per orders from the gov't among other things.
We are still trying to pass financial reform legislation after all the shit that happened for christ sake! Political deadlock will not work here as the cancer will continue to grow and the doctors won't be in agreement over what medicine to use until it is too late.
and may i ask, who elected the 545 blokes?
I think you could have included Evan Bayh's goodbye speech. He said a lot in a few words. Basically said congress is corrupt IMO.
100 million a day? Cheap at twice the price. I say we set up a couple guys in a studio with fake snow, broadcasting how the whole of D.C. is buried, no cars able to function, all the catering shut down, etc... for about the next six months. Feed it out to cable news, and keep the congresscritters out of Washington until after the next election. Then we can fire the whole lot of the corrupt buggers, and send 'em all home.
How can they attribute any 'productivity' to Federal workers? (Except the Military ... and they are busy in warmer climes)
I'll second your comments re DC Federal workers. In the 1980s there were occasional snow storms that shut down DC. Only the "essential workers" (not me as one of the secrective alphabet soupers) were needed...
On the other hand, my alphabet soup agency pals & coworkers were happy with the afternoon off...
Who is essential in DC nowadays...? Looks like to me a LOT OF DOUGH could be saved by lopping off troublesome US .gov workers.
A treatise on who controls what:
545 PEOPLE
By Charlie Reese
Politicians are the only people in the world who create problems and then campaign against them.
Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?
Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?
You and I don't propose a federal budget. The president does.
You and I don't have the Constitutional authority to vote on appropriations. The House of Representatives does.
You and I don't write the tax code, Congress does.
You and I don't set fiscal policy, Congress does.
You and I don't control monetary policy, the Federal Reserve Bank does.
One hundred senators, 435 congressmen, one president, and nine Supreme Court justices equates to 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.
I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.
I excluded all the special interests and lobbyists for a sound reason.. They have no legal authority. They have no ability to coerce a senator, a congressman, or a president to do one cotton-picking thing. I don't care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator's responsibility to determine how he votes.
Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.
What separates a politician from a normal human being is an excessive amount of gall.. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits.. The president can only propose a budget. He cannot force the Congress to accept it.
The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? Nancy Pelosi. She is the leader of the majority party. She and fellow House members, not the president, can approve any budget they want. If the president vetoes it, they can pass it over his veto if they agree to.
It seems inconceivable to me that a nation of 300 million can not replace 545 people who stand convicted -- by present facts -- of incompetence and irresponsibility. I can't think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.
If the tax code is unfair, it's because they want it unfair.
If the budget is in the red, it's because they want it in the red ..
If the Army &Marines are in IRAQ , it's because they want them in IRAQ
If they do not receive social security but are on an elite retirement plan not available to the people, it's because they want it that way.
There are no insoluble government problems..
Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like "the economy," "inflation," or "politics" that prevent them from doing what they take an oath to do.
Those 545 people, and they alone, are responsible.
They, and they alone, have the power.
They, and they alone, should be held accountable by the people who are their bosses.
Provided the voters have the gumption to manage their own employees.
We should vote all of them out of office and clean up their mess!
Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.
Let it snow, let it snow, let it snow. Here in Calif., the state budget is coming in another avalanche of debt...but the bureaucrats in Sacramento still managed to spend $30 million on new office furniture for themselves. We need to....them all.
30 Mil on office furniture and with the multiplier effect ... that is real productivity. If the Feds follow suit, we can produce a boom in office furniture and wouldn't need another stimulus ... someone call the GSA
The dollar rally I warned of since last year has only just started.
USD daily and weekly charts remain bullish.
Vice versa for the EURO and DOW/SP00.
http://www.zerohedge.com/forum/market-outlook-0
Several wags – myself included – have said the invention of air conditioning and its installation in the Capitol and the rest of Washington did more to hurt democracy than any other single factor. Wisely, Washington was constructed from a drained mosquito infested swamp.
Brilliant!
Washington DC closed- 100 million down the drain per day
Washington DC open- 1 billion down the drain per day
Boys and girls looks like we finally figured out how to cut that budget deficit
can i get an amen?
Unbelievable.
Here we are in historic instability, the very foundations of capitalism crumbling, and here you drongos are stuck railing against the 'evil of beaurocracy'.
Ahem, it was the absolute LACK of regulatory oversight that caused this mess. Sure, some beaurocracy is idiotic and counterproductive.
But NO oversight? - dudes, we gave the oligarchy enough rope, it hanged itself. and the economy. and the Government. And us.
Return to the debate when you have eschewed your cartoon cariacatures and have developed a more sophisticated take on the role of responsible government
Don't ignore the elephant in the living room. The Federal Reserve enabled all the bets and creation of all these worthless devices. They were the cause. Without them, the moral hazard wouldn't have existed under real capitalism where money's price is set by the market.
There are miles of regulation. Doesn't do any good if no one knows what they are and no one enforces it.
We've had socialism, cronyism, fascism, crony capitalism, corporatism, marxism, but we haven't had capitalism since maybe the early 1800s.
hey Squid-puppets.. there's no shortage of clowns overseeing. Just not enough clowns doing the job they're paid to do.
In other words, you're dead wrong, and your take is as silly as a cartoon cariacature.
Uh, oversight? We have boatloads of oversight - not enough ENFORCEMENT. Thanks for playin'.
Federal workers don't need a snowstorm in order to not
show up for work
http://coburn.senate.gov/public/index.cfm?FuseAction=LatestNews.PressRel...
20 million man hours of lost "work" from federal employees
who simply do not show up for work.
I know, I am a federal worker and see this everyday.
I was stupid enough to report this and I was completely
ignored. If only more citizens knew.....
Pardon my but how can you lose $100 million a day in productivity when they produce nothing? This is akin to saying that locking up bank robbers prevents them from productively robbing banks! Though maybe not the best analogy since we know that the best bank robbers run the banks and of course are not locked up.
Best thing that could happen to this country is for Washington to shut down, at least it limits their ability to do additional damage.
In a Nation with a dozen or more welfare-type variations, the government employment model is the most insidious of all. It is the backdoor system that keeps hordes of numbnuts off the unemployment roles. Most of them spend their time rackin' and stackin' the rest of us.
And worst of all for the private sector taxpayer, they've organized themselves into unions at State and local levels......hammering out the sweetest of GM-type pension and healthcare deals. How the fuk did we let THAT happen....??
Losing $100 million per day on lost productivity...??
All we lost was 4 days worth of their bullshit.
A dear departed uncle who grew up during the depression held to the view that government employment was simply welfare for educated people. An apt description I'd say.
Hmm. No shit. That makes perfect sense. "rackin' and stackin' the rest of us". Bastards with microscopes and time like a hog.
Lost productivity? How that possible when they were never productive to begin with?
“What to do:
1. Allow the Financial Dictatorship where Wall Street Banksters Owns Congress? http://bartspace12.blogspot.com/2010/02/deficits-unpaid-banks-fed-move.html
2. A State trying to serve its Communities' Needs on Main Street while maximizing productivity and employment?
Is this a Difficult Decision? If you are a Bankster you want #1! If you are everybody eles you want #2!”
“Yes and they are using REAL LOANS - NOT FAKE FRAUDULENT PAPER that is "SURE to FAIL!" so Massive Casino Bets can be ” PAID to CR00KS!
"The Stimulose has saved 2 million jobs that otherwise would have been lost" - BHO
How many Fed workers are there again, excluding the military and P.O?
Saved 0 private sector jobs,per AP, but probably saved a few thousand worthless but highly paid bureaucrats.
The stats about dem vs rep presidents are BS--they only go back to 1948. If you take them back to say 1880 results look a lot different. Wilson was a total disaster economically, for example, while Harding and Coolidge were exceptionally good.
Meanwhile government debt getting slaughtered. Another hiccup for 7/10/30 yrs today..
Good article.
I have an Aunt who is very well connected with Chicago politics. She told me a different take re Bayh, in that he is preparing for a run for president in 2012 or later. As a "moderate", you know, someone who thinks of the American people first and hates overly-partisan politics.
As I said early in 2010:
"It's going to be a difficult year, I'll need a lot to drink."
So far so good!