Armed Zombies

A regular reader writes in. The bone he picks concerns our definition of zombie:

Your definition of ZOMBIE is WRONG.

A ZOMBIE lives on the back of someone else and is not productive (he consumes more than he produces).

This is true in PRIVATE and PUBLIC BUSINESS.

Zombies in the private sector are the most dangerous.

Most dangerous?

Probably not. There are plenty of zombies in the private sector. But they are usually unarmed. It’s the armed zombies that pose a risk to your life as well as your money.

Zombie Jobs Program

Still, there are plenty of zombies in the private sector…and the semi-private sector. From the Wall Street Journal:

US Postal Service Posts $1.96 Billion Loss in Third Quarter

The agency boosted revenue by 2% to $16.5 billion in the period ending June 30. The improvement was due mainly to growth in its package-delivery business, which saw revenue rise 6.6% to $3.19 billion as postal customers increased their online spending. The service’s operating expenses rose 9.2% to $18.42 billion, as compensation and transportation costs grew.

According to E.B. Tucker, the US Postal Service is a zombie jobs program.

It employs 627,000 people…and loses about $12,760 per worker per year. Says E.B.:

It’s basically the same as putting them all on Social Security Disability payments but we can still mail people something if we want to (if we buy the stamp!).

A zombie is not necessarily idle. Or lazy. An honest letter carrier, for example, is a decent fellow who earns his money.

So what makes him a zombie?

You can’t always tell a zombie by looking at him; he doesn’t have greenish skin, hollow eyes and blood dripping from his chin. Often, he walks among us…wears a suit to work…speaks politely…and could pass for a productive member of society.

You can only tell he’s a zombie by looking at what he lives on. Is it a profit-making business? Is he providing a product or service that people would be willing to pay for?

In the case of the USPS, the answer is ‘no’. The fees collected in postage and other revenues do not fully support the employees. The USPS runs at a loss. This must be covered by productive taxpayers.

A company that runs at a persistent loss is one that consumes — in time and material — more than it produces. It is a zombie enterprise — living at the expense of others.

When private-sector zombie enterprises run out of money they usually go out of business. That’s why most zombies tend to be on the government payroll. The government can take money by force…or just print it. So it is able to support zombies for much longer.


Zombie do-gooders

Zombies gather in low-lying areas. There they hide for entire careers without being detected, their output never marked to market. Nobody knows what they are worth.

That is why you find so many in charity organisations. After Hurricane Sandy, for example, the American Red Cross raised $312 million to aid victims.

What happened to the money?

The organisation’s million-dollar-a-year director won’t say. According to ProPublica, she’s hired an expensive law firm to fight a request for information, claiming that the use of funds is a ‘trade secret’.

Did donors get their money’s worth from the aid they gave to the Red Cross? Or did the money go to support zombies?

Our guess is that it went to zombies.

First, because bureaucracy always expands to fill the money available to it. Second, because charitable work attracts zombies on both ends — the givers and the takers.

Even if the zombies at the Red Cross didn’t keep the money for themselves, it probably went to other zombies in the private sector. You can see this process at work in the following example.

From Jon Mitchell, writing in Foreign Policy Journal:

[C]orporations and special interest groups have permeated even the most well-intended of US [foreign aid] policies.

And now we can connect the thigh bone to the knee bone.

The feds use their elastic dollar and EZ money policies to support programs that should be cut back — such as foreign aid.

Zombies working for the US government give the money to zombies working for foreign governments. (Our friend Doug Casey describes foreign aid as ‘poor people in rich countries giving money to rich people in poor countries.’)

Cronies in the private sector make sure strings get attached to the aid package. Money to El Salvador, for example, was withheld until the country agreed to buy genetically modified seeds from Monsanto.

Zombies, zombies…everywhere.


Bill Bonner
For Markets and Money


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Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.

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