By Mencken’s Ghost

October 1, 2004

A voracious blob is devouring the nation of its self-reliance, common sense, wealth, competitiveness and freedom.  But because it is amorphous and insidious, Americans do not realize how big the blob is and what a threat it is to their standard of living and way of life.

What is the blob, or Blob?  The Blob is government bureaucracy and its bureaucratic offspring in the private-sector.  Yes, something as boring and seemingly innocuous as bureaucracy is indeed a major threat to the future of the nation.

How big is the Blob?  Well, because it is amorphous, its dimensions cannot be determined with accuracy.  However, we can discern some of its features.

For example, we know that there are 21 million government employees at the federal, state and local levels.  We know that there are 1.4 million words in the Internal Revenue Code, over 100,000 pages of Medicare regulations, and 676 pages to the Medicare reform bill recently signed by President Bush – to identify just a tiny fraction of the Blob.

We know from reliable think tanks that the cost of federal and state regulations is $1.6 trillion, or 17.2 percent of national income.  Moreover, we know that Americans have to work until July 11, or 53 percent of the year, to pay the cost of government and the cost of regulations.

We know that the Blob has put American manufacturing at a serious competitive disadvantage in world markets.  A recent report released by the National Association of Manufacturers and the Manufacturers Alliance shows that the United States has higher manufacturing costs than all major competing countries but Germany, largely due to the cost of regulations, lawsuits and health care.  Of course, health care costs are high because the Blob destroyed a consumer market in health insurance 60 years ago.

We know that U.S. manufacturing employment has plummeted to a record low of 12 million workers while government employment has skyrocketed to a record high of almost twice as much.  We know that private-sector union membership also has plummeted while public-sector union membership has skyrocketed to become one of the largest special-interest groups in local and national politics.

We know that many of the fastest-growing and highest-paying occupations in the private sector have been spawned by the Blob to cater to the Blob, including millions of accountants, lawyers, consultants, administrators and lobbyists.

We know that many of the Blob’s de facto agents in the private sector are Republicans.  Because they make a living by catering to the Blob, they have been co-opted politically and no longer support the conservative principle of limited government.

Legislation like the recent Medicare reform bill is manna from heaven to the Blob’s many agents, who will be paid handsomely to interpret the gobbledygook that fills the bill’s 676 pages, including such indecipherable wording as the following:

(a) Exclusion From OPD Fee Schedule – Section 1833(t)(1)(B)(iv) (42 U.S.C. 13951(t)(B)(iv)) is amended by inserting before the period at the end of the following:  “and does not include screening mammography (as defined in section 1861 (jj)) and diagnostic mammography.”

We know that interpreting such gobbledygook is make-work, not real work.  It is work that does nothing to make the nation more competitive and productive.  In fact, it makes the nation less competitive and productive, for it has shifted some of the best and brightest Americans from producing goods and services of value to untangling red tape.

We know that about 25 million Americans are employed either directly by the Blob as government workers or indirectly as private-sector agents.  Assuming an average pay and benefits package of $40,000 per worker, the Blob’s payroll totals $1 trillion, a staggering number that excludes the cost of office space, office equipment, travel expenses and other overhead necessary to support all of the Blob’s employees and agents.

We also know that the Blob consumes something more valuable than money, time and talent.  It consumes America’s entrepreneurial spirit, self-reliance, freedom and common sense.  We cannot measure the loss of these things, but we have plenty of examples to show that the loss is huge.

We are stuck in a vicious cycle.  The more bureaucratic that the nation becomes, the more important that make-work becomes.  The more important that make-work becomes, the more important that people who do the make-work become.  The more important that people who do the make-work become, the more that government and industry are run by lawyers, accountants and bureaucrats.  And the more that people in such professions run government and industry, the more bureaucratic that government and industry become.

Can the Blob’s growth be stopped?  No, it’s too late.  Too many influential people get their power, wealth and status from catering to the Blob.

What’s the answer, then?  There are two answers:  First, start investing your money in countries with smaller blobs; and second, make sure that your kids become bureaucrats instead of doing real work for a living.

________________

“Mencken’s Ghost” is the nom de plume of an Arizona writer who can be reached at ghost@menckensghost.com.

By Mencken’s Ghost

April 8, 2011

Within a 10-day period recently, I had my 10-year-old Nissan Maxima repaired and had both a colonoscopy and hernia surgery. No, my head wasn’t found, but, clearly, anyone who would endure two medical procedures and a car repair within 10 days has his head somewhere other than on his neck. 

Because I’m on a group medical plan, I didn’t know or care beforehand what the medical procedures would cost.  However, I knew and cared what the car repairs would cost, because car repairs are paid out of my own pocket and not the pocket of a third party.  In fact, the repair garage provided an estimate of the car repair costs before proceeding, but the hospital, proctologist, and surgeon did not provide an estimate of their charges.

What the typical American family pays in medical insurance premiums per year is difficult to know with certainty.  The numbers are squishy, corrupted by political agendas, and difficult for individuals to calculate, because, for those who have employer-provided insurance, the cost is split by varying percentages between the employer and themselves.  But the most common number thrown about by the mainstream press is $12,000 per year for family coverage.

By comparison, the cost of owning one car is estimated at $9,000 per year.  This includes the amortized cost of purchasing the car, the cost of car insurance, and the cost of gas and repairs.  Since the average American household owns 2.28 cars, the average household spends $20,520 per year on cars (2.28 x $9,000), not counting the cost of roads and highways.

So why don’t we hear about a car-care crisis in America?  It would take a book to fully answer the question, including chapters on how Americans are steeped in canards, fallacies and economic ignorance in K-12 school and college.  The short answer is that Americans have been led to believe that medical care should be free because it is an invented right.  A more cynical answer is that most Americans are spoiled brats who think they have a right to drive status symbols while sticking other people with the cost of their medical care.  If you doubt that, then go to a senior center and listen to the seniors complain about evil Republicans wanting to cut Medicare while their Buicks and Escalades depreciate in the parking lot. 

A cynic might also say that Karl Marx was wrong:  Religion isn’t the opiate of the masses.  Cars are.

Fortunately, I’m not a cynic and won’t be attacked for what the cynics say.

It’s instructive to compare the cost of repairing my car with the cost of my medical treatments.  Let’s start with the medical cost.

Statements sent by the medical insurance company after the medical treatments show that the medical care was billed and paid as follows:

Colonoscopy:  The physician and hospital billed the insurance company $3,235.  The insurance company paid them $967. 

Hernia surgery:  The billed amount was $11,745, and the paid amount was $3,632.

Why the big difference between the billed and paid amount?  I don’t know but suspect that it’s some kind of game played between medical care providers and insurance companies.  It also should be noted that the amounts might not be totally accurate, because medical billing is so convoluted that it is beyond a layman’s understanding.

Was $967 for a colonoscopy and $3,632 for hernia surgery competitive pricing and good value for the money?  The question can’t be answered, because there isn’t a free market in medical care or medical insurance. The market was killed 69 years ago by the government, when its wartime wage and price controls resulted in companies providing medical insurance to employees, thus triggering the dysfunctional third-party payment system in which most consumers of medical care don’t pay the cost directly out of their own pocket.  In economics jargon, consumers are price insensitive in medical care.  The system is further distorted by medical providers having to pick up the cost of uncompensated care for the uninsured, including for illegal immigrants, whose costs are shifted to those with insurance.  

Still, the cost of the medical treatment looks like a good deal when compared to the cost of repairing my car.   The car repair bill was $2,719 for the following:

Diagnosis and reset of computer codes

Replacement of CV boot

Replacement of two rear O2 sensors

Wheel alignment

Tire rotation

Replacement of six coil assemblies

Replacement of spark plugs and spark plug wires

“Free coffee” in the waiting room

“Free” shuttle service

“Free” car wash

So, to recap:

Colonoscopy = $967

Hernia operation = $3,632

Car repairs = $2,719

The auto repairs were done by a high school graduate who attended a year of so of technical school to learn auto repair.  The medical procedures were done by medical specialists with eight years of college plus a couple of years of specialized training.  Moreover, the colonoscopy and surgery were done in a hospital that has considerably more expensive technology than a repair garage, as well as more highly-trained employees, more complexity, and higher overhead expenses.

The colonoscopy required a proctologist to knock me out with anesthesia, run a camera up five feet of my colon, and use his expertise to read the results and determine if I had cancer or pre-cancerous polyps.  For this he was paid a paltry $197.60.  The hernia surgery required an anesthesiologist to knock me out and a surgeon to cut me open in an area just north of my manhood, insert mesh between my intestines and skin, and then close up the wound.  Nurses and other highly-skilled personnel assisted the specialists.   

If the proctologist, surgeon or anesthesiologist had screwed up, I could have ended up dead, seriously injured or in excruciating pain.  If the auto mechanic had screwed up, I would have been inconvenienced

Amazingly, Americans think that medical care is too expensive.  A colonoscopy would show that they have their head up their ass.

____________

“Mencken’s Ghost” is the nom de plume of an Arizona writer who can be reached at ghost@menckensghost.com.

 By Mencken’s Ghost

February 18, 2009

The Treasury Department has written an obituary of the United States. You’ve probably not heard anything about it, because the mainstream media has been too busy covering the political game in Washington to read the obituary and thus understand that it’s all over for the nation, except for the burial of the rotting, maggot-infected body politic.

The obituary is the 2008 Financial Report of the United States Government, published by the Treasury Department, with a cover letter from former Treasury Secretary/Chief Undertaker Harry Paulson. The report is 206 pages long, which is 204 pages longer than the attention span of the typical journalist, 205 pages longer than the attention span of members of Congress, and 205.5 pages longer than the attention span of readers of USA Today.

This commentary summarizes what the obituary says, but if you want to read the entire depressing document, it can be found at:

http://www.fms.treas.gov/fr/08frusg/08frusg.pdf

Keep in mind that the obituary was written before President Obama’s stimulus bill and Treasury Secretary Geithner’s proposed TARP II. Because the nation is financially deceased, both of these spending schemes rely on grave robbing for their funding.

For a product of a government bureaucracy, the obituary contains some strong language. It uses words like “not sustainable” to describe federal fiscal policy and says that current and projected budget deficits and debt will eventually lead to “renewed financial and economic insecurity.” It also warns that without significant changes, the government will be unable to manage a future financial crisis like the one today.

Wouldn’t you think that such a dire warning would be front-page news? Hello, are you still with me, or are you moving your lips as you struggle with the third-grade prose of USA Today?

Sobering charts are scattered throughout the obituary. For example, Chart 2 on page 2 shows that government debt held by the public will be 650 percent of GDP by 2080. For comparison, it was “only” 109 percent during World War II, when the last record was set.

Have you seen this chart on the front page of your hometown newspaper? Oh, that’s right: Instead of the chart, you saw a photo of President Obama’s last town hall meeting, where the president made wine out of water, distributed manna from heaven, and healed lepers.

Even more sobering than Chart 2 is the federal government’s balance sheet, which is shown on page 10 of the obituary. It lists assets of $1.9 trillion, liabilities of $12.1 trillion, and the difference between the two of a negative $10.2 trillion. The bonds of a corporation with such an unhealthy balance sheet would be rated as junk bonds.

Then there is the footnote to the balance sheet in fine print. It says that the unfunded liability of $49 trillion for Social Security and Medicare is not counted as a liability on the balance sheet.

An addendum to the obituary is titled, “Management’s Discussion and Analysis.” Table 1 on page 3 shows changes in the federal government’s cost of operations from 2007 to 2008. In that one year — buckle your seatbelt and assume the crash position — liabilities for “postemployment” benefits (i.e., retirement benefits) for veterans and civil servants increased from $90 billion to $550 billion, an increase of over 600 percent. Did your employer increase retiree benefits by 600 percent? Heck, even General Motors hasn’t been that irresponsible.

Exhibit 2 is an exhibit of irony. It graphically shows how consumer banks, investment banks, and Fannie Mae and Freddie Mac had securitized mortgages and caused the mortgage meltdown. It’s an exhibit of irony because Harry Paulson had headed an investment bank before becoming Treasury Secretary. Of course, almost all of the former and current heads of the Treasury and the Federal Reserve, other than a few academics, have been members of the same exclusive banking club, rotating between the private sector and the government. No conflict of interest there.

Exhibit 3 on page 13 will make you pull your hair out and rend your clothes. It tries to explain the government’s financial statements and how the administration’s statements differ from the Treasury’s. No doubt, Enron designed the statements. To save your hair and clothes, let me give you the bottom line: The net operating cost of the federal government increased 266.3 percent from 2007 to 2008.

Eager-beaver reporters and editors from the mainstream media have certainly reported this figure. Right?

Treasury management then proceeds to lie about the performance of federal managers, claiming that considerable progress has been made by the managers of federal agencies in producing reliable financial reports. Then a letter from the General Accounting Office says otherwise. To quote:

“The material weaknesses discussed in our [audit] report continued to (1) hamper the federal government’s ability to reliably report a significant portion of its assets, liabilities, costs and other related information; (2) affect the federal government’s ability to reliably measure the full cost as well as the financial and nonfinancial performance of certain programs and activities; (3) impair the federal government’s ability to adequately safeguard significant assets and properly record various transactions; and (4) hinder the federal government from having reliable financial information to operate in an efficient and effective manner.”

Translation: The government cooks the books.

Yet the Obama administration can tell you precisely how many jobs will be produced by the stimulus bill.

Oh, get this: The Federal Reserve isn’t audited because it is considered a private entity. Even more shocking, the most public institution of all, Congress, isn’t audited, either.

On page 151 you can find doublespeak that makes the newspeak in George Orwell’s 1984 seem like straight talk. There you’ll find a definition of “Unexpended Budget Balances.” Before reading it, sit on your hands so you don’t pull your hair and rend your clothes. Okay, here it is: “Unexpended budget balances consist of the unobligated and obligated, but unliquidated, budget balances.”

Got it? If you do, please explain it to me.

Page 151 also has a table showing the gross unfairness and lack of social justice of the tax code. For example, those earning between $30,000 and $50,000 pay $2,043, on average, in federal income taxes, or a whopping 6.1 percent of their adjusted gross income. Those earning $200,000 or more pay $133,380, on average, or a measly 22.4 percent of their adjusted gross income. Clearly, the fat cats aren’t paying their fair share. (I’m practicing to be a Marxist so I can get a job in the administration. How am I doing?)

I’m going to stop here, because after reading the 206-page obituary, I’m now completely bald and naked from pulling my hair and rending my clothes.

Maybe I’ll see you at the nation’s funeral. I’ll be the bald, naked guy weeping over the demise of a once great country. No doubt, because of its titillation value, my photo will be published on the front page of your hometown newspaper. However, in keeping with media tradition, an intelligent explanation of the tragedy that caused my nakedness and weeping will not be provided.
______________

”Mencken’s Ghost” is the nom de plume of an Arizona writer who can be reached at ghost@menckensghost.com.