Overpaid in D.C.

So how about those overpaid government workers? We should probably just can the whole unionized lot of them and contract out their jobs to the lean-n-mean private sector. That'd save the taxpayers some serious dough, wouldn't it?

Maybe not. There's a reason that federal contractors are called Beltway Bandits, after all. The Project on Government Oversight took a look at how much private contracting really costs once you look at actual billing rates, and the private sector didn't come out looking too good: 

The result of POGO’s analysis was shocking. In 94 percent (33 of the 35) of the occupational series POGO analyzed, the average annual contractor billing rate was much more than the average annual full compensation for federal employees: on average, contractors may be billing the government approximately 1.83 times what the government pays federal employees to perform similar work. When the average annual contractor billing rates were compared with the average annual full compensation paid to private sector employees in the open market, POGO found that in all occupational classifications studied, the contractor billing rates were, on average, more than twice the costs incurred by private sector employers for the same services.

The most egregious example of an outsourced occupational classification that resulted in excessive costs rather than cost savings is claims assistance and examining—administrative support positions that involve examining, reviewing, developing, adjusting, reconsidering, or recommending authorization of claims by or against the federal government. To provide these services, on average, federal employees are fully compensated at $57,292 per year, private sector employees are fully compensated at $75,637 per year, and the average annual contractor billing rate is $276,598 per year.

$276,000 per year! Nice work if you can get it. Federal labor unions might be tough bargainers, but they're pikers compared to the suits on mahogany row. Those are the guys who really know how to work the system. If you're on the lookout for overpaid chair warmers with cushy jobs, that's your first stop.

Last night Michele Bachmann charged that a campaign contribution from Merck was responsible for Rick Perry's decision to mandate HPV vaccines for girls. Perry said he was offended at the thought that he could be bought for so little, and I figured he was basically right. "It's vanishingly unlikely that Merck's five grand played any real role in Perry's decision," I wrote.

But wait! I didn't have the whole story. It turns out it was more like $30,000

And wait again! Over the past five years, it turns out that Merck gave over $350,000 to the Republican Governors Association, a period in which Perry was heavily involved with the group, and the RGA in turn gave $4 million to Rick Perry.

And wait some more! Merck's lobbyist on the vaccine issue was Mike Toomey, Perry's former chief of staff. Toomey recently co-founded a super PAC that plans to raise over $50 million for Perry's campaign.

So that's that. Now we know what it takes to get in the door and persuade Perry to do something that violates his most deeply held principles and enrages his most zealous supporters. Five grand is indeed far too little. But 30 grand plus 350 grand plus some arm twisting from a pal with deep pockets apparently does the trick. That makes Perry a pretty expensive date. On the other hand, if it were something that didn't violate his most deeply held principles, I imagine his price would go down.
 

Remember all those polls that showed (a) people disliked Obamacare, but (b) liked most of the actual provisions of Obamacare? Greg Sargent points out that we're seeing evidence of the same dynamic today. A couple of recent polls show that people (a) dislike Obama's handling of the economy, but (b) like most his actual proposals for fixing it:

All this suggests disapproval of Obama on the economy may be more a referendum on the actual state of the economy and the overall failure of government to fix it, and less a referendum on Obama’s current suggested policies. It also suggests that as President, Obama will continue to bear the brunt of public disapproval even if Republicans block job-creation ideas that the public thinks would help ease unemployment.

If you want to understand why Obama and his advisers are taking the American Jobs Act to the people, this is why. Despite public skepticism about the Recovery Act, they believe the individual ideas in his new jobs package have public support. Short of getting some of them passed, the only way to break the current dynamic — in which the GOP reaps political dividends from blocking policies Americans say they approve of — is to drive home to Americans who is preventing them from passing.

I don't think there's much question that this is right. People who aren't pure partisans really do vote mostly based on the state of the economy, and they don't seem to care much why the economy is bad. When times are tough, they throw the bums out. It doesn't much matter if the bums have been trying hard.

But is it possible to overcome this dynamic if you barnstorm the country making it clear that your opposition has been working day and night to keep the economy in a ditch? The historical evidence doesn't provide much hope on that score, but then again, I'm not sure an incumbent in recent memory has really tried very hard to make something like this stick. Certainly Obama hasn't given it much of a go yet. But there's still time before next November.

The Census Bureau released its latest report on poverty today, and it unsurprisingly tells us that incomes are down and poverty is up. However, there's much gnashing of teeth in the blogosphere over the fact that Census figures account only for cash income, not for various government transfers and benefits. See Tim Worstall here, for example.

So how much poverty is there after you account for food stamps and Section 8 housing and Medicaid benefits? Good question! And the Census Bureau is going to tell you. But not until next month:

Alternative/Experimental Poverty Measures

Families and individuals also derive economic well-being from noncash benefits, such as food and housing subsidies, and their disposable income is determined by both taxes paid and tax credits received. The official poverty thresholds developed more than 40 years ago do not take into account rising standards of living or such issues as child care expenses, other work related expenses, variations in medical costs across population groups, or geographic differences in the cost of living. Poverty estimates using the new Supplemental Poverty Measure, for which the Census Bureau expects to publish preliminary estimates in October 2011, will address many of these concerns.

It's worth noting that the new measure includes things that reduce poverty (mostly government welfare programs) and things that increase it (high medical inflation and rising child care expenses). So it's not clear how much the measured poverty rate will change on net. I guess we'll know next month. As a sneak peek, though, here's a table showing the official poverty rate compared to a variety of alternative measures from last year's report. (The alternatives come from the National Academy of Sciences, on which the new measure will be based.) Generally speaking, the differences aren't huge, and they all show poverty increasing, at least over the past decade. So I wouldn't expect any gigantic surprises when the official report that accounts for everything finally comes out next month.

From Rick Perry, after Michele Bachmann suggested that a campaign contribution might have affected his decision to mandate HPV vaccines for girls:

If you're saying that I can be bought for $5,000, I'm offended.

Duly noted, sir. So how much does it take?

Jokes aside, what's interesting here isn't Bachmann's allegation per se. It's vanishingly unlikely that Merck's five grand played any real role in Perry's decision. What's interesting is the weird, two-faced nature of the more general crony capitalism charge. On the one hand, you have one version (the HPV mandate was a payoff to Merck) that's ridiculous and unfair, but might actually hurt Perry anyway because the tea party crowd is riled up about the HPV vaccine and therefore open to the idea that there was something fishy about it.

On the other hand, you have the quite plausible and heavily documented fact that Perry has doled out a ton of favors to people who have been campaign contributors over the years. But so far, at least, this version of the crony capitalism charge hasn't hurt him because.....I dunno. I guess tea partiers don't really care about their politicians cozying up with rich industrialists job creators.

But! It's possible that the first version, unfair as it is, could make conservative voters more receptive to the second, more serious version. After all, no one has really tried to seriously tar Perry with the crony capitalism brush yet. It's a little tricky, I think, since every politician takes lots of campaign contributions and does favors in return. So any mud flung at Perry could easily end up boomeranging. But if Perry keeps riding high in the polls, the rest of the field is eventually going to get nervous enough to give this a try. Bachmann opened the door last night, and I'd be surprised if others didn't join her in walking through it pretty soon.

Crunch Time in Europe

What is Europe's problem? Well, Greece, of course. But no! Greece is actually kinda small. It's really Spain! That's serious business. But no no no. It's actually Italy that's in trouble! That's even worse! Contagion is nigh!

So what's next on the hit parade? What's bigger than Italy? Felix Salmon provides the play-by-play:

It’s looking increasingly as though the proximate cause of the next big global crisis is going to be a liquidity crunch at French banks, rather than a European sovereign default....BNP Paribas started July trading at €55 per share; it’s now at €27, and there’s no bottom in sight. And that’s making lenders very nervous, according to Nicolas Lecaussin:

“We can no longer borrow dollars. U.S. money-market funds are not lending to us anymore,” a bank executive for BNP Paribas, who declines to be named, told me last week. “Since we don’t have access to dollars anymore, we’re creating a market in euros. This is a first. . . . we hope it will work, otherwise the downward spiral will be hell.”

....The market has good reason to be worried about the French banks. They own $57 billion in Greek sovereign and private debt — more than all German and British banks combined. And they have well over half a trillion euros in Spanish and Italian debt, most of which is trading at a substantial discount to par, if it trades at all.

As a result, the only way for the French banks to be able to project a credible degree of solvency is for the Eurozone to inject a huge amount of money somewhere. Either it goes into the countries the French banks have lent to, and will then be used to pay back the French banks what they’re owed, or else it just goes into the French banks directly — the TARP solution. But if the EFSF isn’t beefed up and deployed very soon, we could see some extremely big French banks either collapse or get nationalized in very short order. And nobody wants to see where the chain reaction from that would lead.

Hang on tight. The next few weeks could well be make or break time for Europe. And for the rest of us.

From the Mailbag

My Virginia readership must have had a mind meld this morning. Here's Virginia friend #1:

Subj: Lord help us

Is it just me or does it seem like there is not one leader in the Democratic Party who has Obama's back? Every day is like watching eleven members of the Republican team beat the crap out of a one-man Obama "team." Why aren't our leading Democrats out there every day slugging it out on Obama's behalf?

The optics alone feed the growing idea that the Republicans are the much stronger Party and we really just ought to go ahead and put them in charge of everything in 2012. What the hell is going on?

And here's Virginia friend #2:

Subj: Any Democrats wanna speak out?

Anyone, anyone (other than the President), anyone? Republicans putting party before country, Republicans standing in the way of recovery, Republicans' same old tricks, no ideas on the right for economy, no need for quick action, say Republicans, as country falls back into recession? Anyone? Jesus, anything other than a grab bag of purely Republican quotes about how socialist the bill is?

Can someone say something? Do Democrats even support the bill?

http://firstread.msnbc.msn.com/_news/2011/09/13/7741748-obama-agenda-gop-balks-at-447b-bill

Or are we back to the Days of Pique I remember from pre-Lewinsky Clinton where Democrats would let the president hang in the breeze due to some slight disagreement with him?

Nobody's obliged to back up the president out of party loyalty if they have a genuine disagreement with him. But my Viriginia crew is right: Obama's jobs bill really ought to be something the party can rally behind. Even if you think it's too small, you can still support it. But the Democratic response has been pretty tepid. They must really be looking forward to a Rick Perry presidency or something.

So what happens if we tighten our belts and cut back on spending, as Republicans unanimously want us to do? A new IMF study estimates the effect of a cutback equal to 1% of GDP, which amounts to about $150 billion in the U.S. According to both the GOP leadership and its crew of presidential candidates, this would be peanuts, a mere down payment on serious budget cutting.

And maybe so. Unfortunately, as the chart below shows, a cutback of that size would lead to lower incomes and dramatically higher unemployment. But wait! There's more! The IMF study says the effect is twice as big as the one in Chart 2 when central banks can't cut interest rates. And guess what? The Fed already has interest rates at zero. They can't cut them any further.

In other words, the GOP's version of belt-tightening would probably jack up unemployment rates by nearly a full point. Welcome to Rick Perry's America. (Via Brad Plumer.)

Michael Shear in the New York Times this morning:

Presidential candidates have three options when they are presented with past positions or actions that become political liabilities once they are facing voters. They can back down and apologize. They can stand their ground, consequences be damned. Or they can find a way to do both, usually by recalibrating their positions and tweaking history.

Gov. Rick Perry of Texas did all three Monday night.

Technically, I suppose this is true. Perry has indeed admitted he made a mistake when he issued an executive order requiring young girls to get an HPV vaccine. He's admitted it over and over and over because the tea party crowd is on the warpath over this. Besides, he reversed gears on that years ago. There's really no downside to fessing up.

But that's an outlier. The thing that stands out about Perry's candidacy so far is that this is really the only issue he's reversed course on. Contra Shear, he didn't back down on Social Security last night at all. It's true that he didn't repeat his Ponzi scheme nonsense, but he didn't come anywhere near to disowning it. And Shear doesn't even touch on the most obnoxious example of Perry's (quite obvious) decision to never to back down from anything: his doubling down on the charge that printing more money would make Ben Bernanke "almost treasonous":

Blitzer: You stand by those remarks, Governor?

Perry: I said that if you are allowing the Federal Reserve to be used for political purposes that it would be almost treasonous. I think that is a very clear statement of fact.

Crowd: [Loud cheers, clapping.]

Put this together with Perry's loud insistence that he stands by every last word in his book, Fed Up!, and it's obvious that he's decided one thing: Republican voters might or might not agree with everything you say, but they'll crucify anyone who ever admits either a mistake or even a moment's doubt. They want the mindless self-confidence that comes from deep in the gut, and Perry's going to give it to them, come hell or high water. That's the takeaway from last night's debate.

Tonight's Freak Show

Sorry for the radio silence about tonight's debate, but I'm still in a state of shock. This was a full-on freak show. No blog description can do it justice, I'm afraid. It was just two continuous hours of stupid prepackaged zingers, chuckleheaded ignorance, and reactionary one-upsmanship for the benefit of the adoring tea party audience. Even Jon Huntsman decided that full-bore idiocy was his only chance to make an impression. Mitt Romney tried gallantly to stay just barely on the right side of sanity, but it's not clear that it helped him any. The CNN pundits seemed much more impressed with Rick Perry's virile "presence."

Jesus, what a depressing experience. Europe is about to implode, there's a pretty good chance that this could be enough to tip our economy back into recession too, and one of those clowns on the stage tonight might end up being president when it happens. Lord help us.