How to spot a zombie

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 usually are unarmed. It’s the armed parasites that pose a risk to your life as well as your money.

Still, there plenty of zombies in the private sector, and the semi-private sector. 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 our chief researcher, EB Tucker, the USPS is basically a zombie jobs programme.

It employs 627,000 people, and loses about $12,760 per worker per year: “It’s basically the same as putting them all on SS disability payments but we can still mail people something if we want to, and 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 always 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 Post Office, the answer appears to be ‘no’.

The fees collected in postage and other revenues do not fully support the employees. USPS runs at a loss, which 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 – living at the expense of others. In the private sector, zombie companies usually run out of money and 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.

Zombies collect 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 $312m 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. And 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.

Jon Mitchell, writing in Foreign Policy Journal:

“…corporations 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 flexible dollar and EZ money policies to support programmes 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.


  • Critic Al Rick

    As I see things Zombies are included amongst Parasites (rich, poor and intermediate). Whereas the Zombies are largely in the Public Sector, the non-Zombie Parasites are largely in the CeS(pit) (Cartel, etc Sector aka QPS – Quasi Public Sector aka Quasi Private Sector).

    It is, at the end of the day, the TPS (Truly Private Sector) which is the Parasites’ Host.

    I hope I’m not around to witness ‘the Day of Reckoning’…

  • Angry Man

    By these definitions most of the major banks in the UK are zombies.

    Don’t believe me – see what would happen to the share prices if the UK government started to make serious inroads to recover the £800+ billion taxpayers have pumped into supporting the banking system.

    Hate to see an article that supports the “Public bad, Private bad” stereotype. Many many private companies are badly run and depend on public money for support

MoneyWeek magazine

Latest issue:

Magazine cover
Cleaning up

Profiting from the fight against pollution

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues

Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.

29 May 1660: Charles II restored to the throne  

While Charles II was formally proclaimed King by parliament in April, he only reached London on this day in 1660.

The Kids' Portfolio: the four best funds to buy for your children

Investing for your children's long-term future is an excellent idea. But what should you buy? The Kids' Portfolio is a simple collection of four funds intended to be tucked away for 20 to 40 years.