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Tuesday, September 07, 2010

When The Problem IS Unit Cohesion...

The problem is really those who perceive a problem.

See Shrinkwrapped's recent post on Cynthia Tucker's column.

We have 24% unemployment among the young and 16% black unemployment. Needless to say, the average American wants to curb immigration until we have cut our unemployment rate. Needless to say, blacks and recent Hispanic immigrants are among the most desirous of such a policy. We have very strong hostility among the more educated portions of the populace (IT, engineering) to outsourcing and H1B immigration for the same reason.

And Cynthia Tucker writes a ridiculous column claiming that people are worried about skin color? Hah.

If you look at polling, the policy of bailing out bankers gets almost the same percentage of rejection among Democrats as Republicans. On many of the major issues of the day, there is little statistical difference among the adherents of different parties. And by nearly identical percentages, Democrats and Republicans want term limits in Congress. Democrats and Republicans are furious about the GM deal and the perception that the UAW was given special treatment. Most Americans perceive that government actions to deal with the recession did more to help those on top of the heap than those most affected. There is growing hostility to public sector unions which have negotiated themselves overwhelmingly sweet deals. When government employment becomes a way of shielding oneself from the common experience, you can expect most Americans to be angry at this All-American dacha class.

So what we are really seeing is a very strong social pushback against those groups and interests who seem to be trying to negotiate special deals, and a backlash against a government which is widely perceived to be corrupt and in the business of dealing out bennies to those who pay them the most. The reason why it is perceived to be corrupt is because it is corrupt.

This backlash began during the GOP-dominated Congress of 2005, and the impetus was the horribly bad behavior of Congress in the wake of Katrina. The average citizen was concerned THEN about the deficit and wanted takebacks in other government handouts to pay for the Katrina aid (which was widely supported). Congress made it clear then that it had no intention of behaving in a civilized manner.

Since the Dem-dominated Congress of 2006 and since is behaving just as badly, Americans are pissed.

It is no accident that Congress almost paid T. Boone Pickens to corner a huge percentage of Texas water rights. The AGW type stuff has turned into a corporate pinata. Americans have noticed this.

Americans have also noticed that governments from the bottom up have turned into a giant special-dealing scheme.

Here is the data for government compensation versus all private sector compensation, normalized:

The BEA data is here. The picture becomes increasingly grim when you learn that unfunded retirement benefits are going to cost at least 2 Trillion more, maybe over 3 Trillion, and that there is a widespread but quiet effort to have the federal government take over these obligations.

It should be obvious that this is not sustainable. It should also be obvious that there will be increasing efforts to rouse the wrath of citizens against private industry as a way of hiding the public sector's sweet deal.

The picture becomes even clearer when you look at wage and salary accruals. From 2000 to 2009 government wages and salaries increased slightly over 50%. Private sector wages and salaries increased 26%. This is obviously unsustainable. Government expenditures really have gotten to the point at which they are crushing the economy.

The issue becomes even more remarkable when you break it down by worker. According to BLS, in August of 2009 there were 20,665 thousand government workers and about 119,400 private sector workers. Now we go back to BEA's 2009 compensation figures for government/private:
Gov: 1,173,571 / 20,665 = 56.8K
Priv: 5,113,359 / 119,400 = 42.8K

We cannot fix our imbalances by just cutting Social Security again. We are going to have to take a broader approach.

Businesses have a lot to gain if our fiscal imbalances are corrected, but currently businesses from small to large doubt the willingness of government to correct those imbalances, so the willingness to pay more in taxes and keep investing in the US is lacking. This, of course, increases the public/private imbalance.

We have come to the end of being able to stagger along by giving groups special benefits, and the broad public has realized that. Whatever political group adopts a platform that stresses equalizing the needed cuts will win the political debate and the political reins. However, to date no such movement has occurred in either party, which I suppose accounts for the rise of the Independent faction among the citizenry.



Comments:
Thank you MoM. I have been dealing with the county bureaucracy lately. The smug satisfaction of many who work there is apparent. I notice it mostly among the younger clerks,the ones who perform the jobs requiring initiative and skill and the older workers almost all seem to have some sense. Was it Twain who said Congress was america's only exclusive criminal class?
 
Tom,

Yes...

"It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress."

- Pudd'nhead Wilson's New Calendar
 
It is my observation that the political class in D.C., both dems and repubs, believe that their job is to coddle special interest groups. They seem to believe that as long as they can be seen as awarding benefits to these groups, they can keep getting reelected.

That is why they don't quite get the TEA Party. Here is a group that cannot be bought off with a new program, earmark, tax break, or bribe. They do not get that the TEA Partyers want LESS from government. Less government, less government spending, less nanny statism, and less regulation. The only thing the TEA Party wants more of is national defense - fight the Islamic radicals harder and secure our borders.

The air in D.C. is filled with a strange gas emanating from K Street called Lobbyosis. It is from there that the pols get their ideas that they can buy people off using the taxpayers' own money. Hopefully this election in Novemeber will bring enough fresh blood to town that the K Street influence will be diminished.
 
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