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This page contains a single entry from the blog posted on January 18, 2010 3:34 PM. The previous post in this blog was Is Phil Knight leaving Oregon?. The next post in this blog is Why I'm breaking up with you. Many more can be found on the main index page or by looking through the archives.

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Monday, January 18, 2010

The real class war ahead

The United States had 2.3 state and local government employees per 100 citizens in 1946 and has 6.5 state and local government employees per 100 citizens now. In 1947, Hodges writes, 78 percent of the national income went to the private sector, 16 percent to the federal sector, and 6 percent to the state and local government sector. Now 54 percent of the economy is private, 28 percent goes to the feds, and 18 percent goes to state and local governments. The trend lines are ominous.

Bigger government means more government employees. Those employees then become a permanent lobby for continual government growth. The nation may have reached critical mass; the number of government employees at every level may have gotten so high that it is politically impossible to roll back the bureaucracy, rein in the costs, and restore lost freedoms.

People who are supposed to serve the public have become a privileged elite that exploits political power for financial gain and special perks. Because of its political power, this interest group has rigged the game so there are few meaningful checks on its demands. Government employees now receive far higher pay, benefits, and pensions than the vast majority of Americans working in the private sector. Even when they are incompetent or abusive, they can be fired only after a long process and only for the most grievous offenses.

It’s a two-tier system in which the rulers are making steady gains at the expense of the ruled. The predictable results: Higher taxes, eroded public services, unsustainable levels of debt, and massive roadblocks to reforming even the poorest performing agencies and school systems. If this system is left to grow unchecked, we will end up with a pale imitation of the free society envisioned by the Founders.

The whole thing is here. It's sobering reading, even if there were no soccer or streetcar boondoggles on the table. Throw those in, and you can see the freight train at the end of the tunnel.

When Reagan was selling this line 30 years ago, he was mostly full of hot air. Not so now.

Comments (40)

Amen, Jack thank you for posting this. You are certainly correct this is the next battle. Tomorrow in Massachusetts may become the first warning shot if Republican State Senator Scott Brown wins the election for Kennedy’s seat. Even if State Attorney General Martha Coakley squeaks by; the die has been cast and this is going to foster a dramatic change in American politics and the government class.

"When Reagan was selling this line 30 years ago, he was mostly full of hot air."

That wasn't hot air. That was prescience.

At the same time, all of the newsfeeds are full of articles pitching government jobs because of the stability and the lack of age discrimination. Speaking as someone who used to work for the Bureau of Land Management, I can appreciate not having to worry about a 6000-head layoff just because some MBA in upper management let his syphilis do the talking in a major deal. At the same time, a lot of the people gunning for those government jobs look at their time as "running out the clock" to retirement, and there's no way in hell that they're going to allow anything that doesn't protect their job security.

Of course, it's not all horror. I got a lot of humor in discovering that most federal positions are blocked to those who have foreclosed student loans on their records. I can hear the "But that's not FAAAAAAIIIIIIIIR" screams from here.

Rethinking your "yes" vote Jack? What do you think that money is going towards?

I commented to the spousal unit this am about the lack of traffic on the highways this morning, a government holiday.
I am not sure how we would survive the unemployment problem if all those govenment jobs went away in one fell swoop. No doubt a gradual reduction would be best as those folks were absorbed into the private sector.
Of course to be realistic, I do not see that senario happening at any time.

To add to the scary statistics, the government seems to often screw up more things, have more people not believing in its effectiveness. No matter which party we elect, the train keeps right on traveling down the same track.

Rethinking your "yes" vote Jack?

No. They can have half of what they're asking for this time -- as long as I'm not paying any of it.

A vile article written by somebody who read Ayn Rand as an adult without giggling the whole time. Anytime you see someone quote the Orange County Register as an authority you know that you’re in for some biased, overblown tripe.

Having said that, the argument that public employee unions have negotiated deals that are likely to bankrupt us all is entirely true. I love unions but they only work when two sides are fighting. The fact that we don’t have police and firefighters going out on strike all the time but they still have these gold-plaited retirement deals shows that the system is broken. I think we are headed for European levels of taxation (which I’m fine with) but without the guaranteed healthcare and safety net (which I’m not happy about).

I did a quick survey of the in-laws and there seems to be a perfect correlation between how right wing they are and how much they suck at the government trough. The true wingnuts are all policemen, firefighters or husbands of school employees who provided them with health insurance all their lives. Don’t expect analysis or self-awareness to save us.

"has 6.5 state and local government employees per 100 citizens now."

C'mon there are about 340K PERS accounts and Oregon has about 3.5M pop, so right there is 10%. That's not counting the Feds and the PFDR recipients.

C'mon there are about 340K PERS accounts and Oregon has about 3.5M pop, so right there is 10%. That's not counting the Feds and the PFDR recipients."

Hmmm...based on the chart on page 2 of the PERS document here, there are 170,569 active members of the system:

http://tinyurl.com/ygkr7v8

Using a population of 3.5 million, that is more like 4.9%. But as you point out that doesn't include FPDR (and the 6% in the article didn't include federal employees).

In the private sector, union reps are countered by management, which is not only not beholden to employee unions but is adversarial to them by definition. In the public sector, union reps are "countered" by politicians who ARE beholden to them, for their campaign finances. This is a radical and irremedial conflict.

I have read this blog only sporadically since leaving Portland in 2003. I recently returned (to the blog) to see what Jack's position was on Measures 66 & 67. This does seem an irreconcilable conflict -- ostensibly agreeing with this piece and supporting M66/67.

("as long as I'm not paying any of it?" Sigh. That's a whole 'nother post.)

I'm voting yes on 66 and no on 67.

One problem with analysis like this, however, is that is errs in finding all government sector employees in the same category. I used to be in the private sector, have been in state employment recently, and am returning to the private sector next month. My wife is also formerly of the private sector, and now in state employ. Both of us are attorneys, in non-union positions. We are woefully underpaid compared to our private sector equivalents. For example, next month my salary will more than double the instant I enter the private sector, performing exactly the same job functions. Also, neither of us got into state employment during the PERS golden days, and now have a PERS plan that is essentially a 401(k), and generating less retirement income than when I was in corporate work. Finally, I have considerably less job security (being at will) than for instance my secretary who is governed by a bargaining agreement.

So, while I certainly agree that some government positions are over compensated, my experience is that that most commonly applies to the basic skills positions, not the professional positions. For instance, some folks I know in the sciences are also under compensated compared to their private sector counterparts. And as such, the cries of "all the government employees are fat cats," like most generalizations in life, misses addressing the real challenges of the problem in favor of hyperbole.


Ha! That's nothing! Take a look at this link if you really want to be angry. It's Nancy Pelosi's new private jet--a miniature version of Air Force One just for the Speaker of the House. Apparently she couldn't be bothered to refuel somewhere in the Midwest on her way back to California, as that would cut into her four day weekends!

http://rense.com/general89/pelos.htm

Reagan didn't just carp. He initiated legislation to rein in costs and guided it through the Congress on a mostly bi-partisan basis. His moves, long term, have put us hundreds of billions of dollars better off than what would have persisted with the status quo.

During the Reagan administration, pension benefits for newly hired federal employees were reduced by more than 50 percent (transition from CSRS, essentially 2 percent credit for each year of service inflation protected and pay as you go, to FERS, essentially 1 percent for each year of service funded on a current basis partially inflation protected and funded on a current basis).

Also, federal employees and their employing agencies were, under Reagan, first required to contribute to Medicare.

Most every President and Congress since that time has been on the give away gravy train. Most recently, the Obama administration pushed through a bill giving FERS employees service credit for their unused sick leave. Just another little incremental lifetime kick of $15K, $20K or more for the poor, underpaid and underappreciated federal employee. Surely you won't mind passing that debt along to your children and grandchildren.

And Sherwood, anyone who has the patience to actually read one of those Rand volumes cover to cover deserves some kind of respect for sheer tenacity. Personally, I could never get more than a few dozen pages in.

As we get further and further into the Obama admistration we are going to learn, the very hard way, just how right Reagan was on a whole range of issues and strategies, not the least of which was having drinks with leaders of the opposition party instead of Harvard professors and Chicago politicians.

Speaking of war, it's interesting to note that Department of Defense was also created in 1947.

The best info I could find in 5 minutes on Google indicates that the DoD's budget in the late 1940s was around $14 Billion (about $135 Billion in inflation-adjusted 2009). FY2010 proposals for the DoD are around $665 Billion. This does not include all the nuclear stuff that's funded by Energy, nor Veterans Affairs (which is arguably underfunded). Nevertheless, what's that, about a 400% increase?

Add to that national debt servicing, the cost of which increased dramatically during the military-focused Reagan and Bush II administrations (around 10% of total tax revenue the last few years), and we're starting to talk about real money.

But dang those teachers, unions and civil-servants for sucking up our private money and bankrupting our country!

Ted,

As intriguing as the Nancy Pelosi jet story is, it is apparently not true. See FactCheck.org.

The whole thing is here. It's sobering reading, even if there were no soccer or streetcar boondoggles on the table. Throw those in, and you can see the freight train at the end of the tunnel.

Sobering, huh?

How many "drunks" will read it, let alone apprehend it? They think that big bright light in the tunnel is the sunrise of a another day. Another day in their blinkered, unsustainable, self-serving surreality.

Gee, I hope they're ready for the BNSF truth.

BTW, what the hell has got into you lately - you're scarin' me?

The Portland Water Bureau is a prime example of government bloat, 674 employees according to the December 2009 Auditor report. Even in this economy all 674 got raises, no furlough days and the large engineering staff a upward classification. The community received an 18% rate increase.

Years of deferred maintenance remains deferred.Money is spent on projects that have nothing to do with our water system.

Debt is mounting at an unsustainable rate consuming 40% of the PWB budget. $100 million in bonds will be issued every year to support the unnecessary reservoir burial and additional treatment plant projects.

As another blogger said, start a savings account now as you will soon need it just to pay your water bill.

I'm in an odd sort of a position here. I got laid off from a private company in Oregon in January 2009. I got on with a municipality in Texas by May 2010. It was a long trip and not an easy change to make, but down here we do not have state income tax and the city I work for does not have a union (for which I'm grateful - the firm in Portland didn't have a union either). My job with the city is MUCH more secure than my previous job and the way the city down here runs things is MUCH different than the mess that Portland finds itself in.

My bottom line, is that I dislike unions. I am ever thankful to the Lord for being able to snag this job. While it's not as demanding as the job was in the private sector, I can certainly stay with it until I retire (10 to 20 years away).

I don't like the democrat idea of bigger government. But I do like being more secure than what I was in the private sector. Welcome to caught between a rock and a hard place. I also think government workers should not be allowed to form or belong to a union.

Just a view from my window.

I should also add that my position with the city pays more than what I made in the private sector and the benefits are twice what they were in the private sector.

"there are 170,569 active members "

I was wrong, then there are 320K PERS accounts. You do realize retired or not taxpayers are responsible for all of their benefits and pay.

Unless you really think that PERS is selfl-sufficent.

Ayn Rand's ideals were a rejection of her experience in a "prison," and her reaction would be the same as anyone else escaping it, except she put an ideology to it and described its opposite, individual freedom. This is what Americans today are rejecting because they have never experienced what it is like living in a "prison," although Obama is building the cage now under the guise of community interests being more important than self-interest. See Save Pebble Droppers & Prosperity on claysamerica.com.

"has 6.5 state and local government employees per 100 citizens now."

If you just count the percentage of state and local government as a percentage of the people who have jobs in Oregon the number is 16.56 per 100.

For Nov '09 there were 268.4k state and local jobs in Oregon out of total of 1,611.7k jobs.

That comes out to one gov't employee for every five non-gov't workers.

And this doesn't even count the public school teachers. The final number of public employees to private sector workers is probably closing in on 1 public for every 3 private.

http://www.qualityinfo.org/olmisj/CES?action=rs54&areacode=01000000&adjusted=1

As long as we are trying to get government down to the size that enables us to "drown it in the bathtub" we need to get all corporations in there too. Fair is fair.

It's strange more haven't mentioned that the biggest drain on the Federal budget is the defense budget and war debt.

The long term costs of our military will cripple us more than any teachers retirement plan. At least with a retirement plan we get something beneficial.

http://www.warresisters.org/pages/piechart.htm

http://costofwar.com/

RNR,

Two points:

(1) It can be argued that defense spending for the federal government ought to be the biggest "drain" on the budget. Let's remember back to an era where much of the regulation was either self or local government and the federal government managed to keep us safe (so much for that) and monitored interstate commerce.

(2) Where exactly do you think all that defense money goes? To the private sector where they build the tanks and the planes and the bombs. No benefits for the engineers and factory workers? The defense industry, for all its faults, is still largely a U.S.-based industry (Boeing, McDonnell-Douglas, Hughes, etc.) for security purposes and employs many U.S. workers.

The United States had 2.3 state and local government employees per 100 citizens in 1946 and has 6.5 state and local government employees per 100 citizens now.

I'm confused, then.

According to the Census Bureau, there are approximately 4.3 million Federal employees (only 2.8 million full-time), and a total of about 3.8 million State employees.

For a total of about 8 million civilian employees, or about *2.6 government employes per 100 citizens*.

http://www.census.gov/govs/apes/

And even if you want to add in the 2.5-3 million active and reserve military members (which typically aren't counted), you get 10.5-11 million, or about one-half the amount cited in Jack's post.

And I'm unclear where the author came up with the number of "local" government employees, since those numbers aren't available, either in aggregate or by state.

In other words, he would have had to request the numbers from thousands of towns and cities, individually, and each would've had to give up the data.

But putting all the statistical wonkery aside, do municipalities in 1946 require the same amount of administration, maintenance and other supporting services that a 2010 municipality does? For example, the amount of paved road surface in 2010 is likely about 4-5 thousand percent more than in 1946.

And so on. The truest thing that can be said about the Reason article--like most Reason articles--is that it's a polemic based on sketchy, agenda-laden "facts" to make its point.

How about this for a tradeoff:

Let's get a health care system that covers everybody, resulting in more government intervention in the private sector.

And then let's institute a true school choice voucher system, resulting in more privately-run schools.

"Rethinking your "yes" vote Jack?"

"No. They can have half of what they're asking for this time -- as long as I'm not paying any of it."

Jack, you left off a modifier in that statement: "As long as you're not paying any of it DIRECTLY."

I'm not paying any of M66, at all. That's for the rich folks.

The problem is not the government employees per se. It's the proliferation of managers, supervisors, directors, etc.

People supervising other people.
The creation of institutionalized bureaucracies.

And the public money that gets spent to maintain our "empire" around the globe.

It's still the richest country in the world and most of the million/billionaires of the world maintain residences here.

Lets not forget the endless printing press called the Federal Reserve that just keeps putting out the cash.

The problem is more complex than it appears.

I do agree however, that government is a runaway train and needs to be derailed.

"I'm not paying any of M66, at all. That's for the rich folks."

So, Jack, you don't believe that any of those "rich folks" are business owners, paying higher personal income taxes on their pass-through LLC or sub S corp income, and none of them will raise prices to you, or let employees go or move their businesses out of state because of M66?

And, are you sure that when M66 and M67 don't raise the expected revenue that the legislature won't lower the income limits to the point that you become one of those "rich folks?"

Yes, I'm quite sure my position is correct. Please go away -- your coffee at Paula's Bake Shop is getting cold.

Ecohuman, please check out the Bureau of Labor Statistics web site, www.bls.gov.

The latest payroll data release for December reports 22.5 million government jobs (out of total nonfarm jobs of 130.9 million). The 22.5 million breaks down to 2.8 million federal (I've seen claims that the number of contract federal employees is as high as 4.5 million), 5.2 million state and 14.5 millon local. Since payroll employment is based on straight-up reports from establishments, there isn't a whole lot of statistical mumbo jumbo involved (unlike the unemployment report which is a household survey).

See

http://www.bls.gov/news.release/empsit.t14.htm

Ecohuman, please check out the Bureau of Labor Statistics web site, www.bls.gov.

You should read the site you linked to more closely, and compare it to what I linked to.

Hint: look at what's included and excluded. It matches the link I posted.

read the site you linked to more closely

What motivated my response was the following...


And I'm unclear where the author came up with the number of "local" government employees, since those numbers aren't available, either in aggregate or by state

That is not correct -- I had hoped to avoid pointing fingers -- to post a clarification .

To the extent that you doubt BLS, I can say that as a decades-long user of these data, the payroll reports are by far the most stable and reliable real-time economic indicator produced by the federal government.

Also, as someone who reported data to BLS for a number of years, I can affirm that the agency is tenacious; non-reporting or late reporting yields rapid and insistent follow-up.

That is not correct -- I had hoped to avoid pointing fingers -- to post a clarification.

Grady, you misunderstand the figures you're trying to explain. I guarantee it. I don't "doubt the BLS"--you don't understand teh data. But--I'm not going to write a 500-word essay trying to explain it to you, so we'll just have to leave it as it lies, and disagree.

Also, as someone who reported data to BLS for a number of years, I can affirm that the agency is tenacious; non-reporting or late reporting yields rapid and insistent follow-up.

And I know personally how the BLS collects and aggregates data, Grady, but I'll let this one lie, too.

I'm curious how many private jobs in the US have been lost via companies shipping them to second/third world countries?

And, it seems the newly-elected mayor of Seattle is on to the idea that there has been a proliferation of middle-management positions. Those positions increased substantially in the past 10 years, per an article posted earlier. I wonder if that is true throughout governments at all levels?


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Fran Cannon Slayton - When the Whistle Blows
Neil Young - Waging Heavy Peace
Mark Bego - Aretha Franklin, the Queen of Soul (2012 ed.)
Jenny Lawson - Let's Pretend This Never Happened
J.D. Salinger - Franny and Zooey
Charles Dickens - A Christmas Carol
Timothy Egan - The Big Burn
Deborah Eisenberg - Transactions in a Foreign Currency
Kurt Vonnegut Jr. - Slaughterhouse Five
Kathryn Lance - Pandora's Genes
Cheryl Strayed - Wild
Fyodor Dostoyevsky - The Brothers Karamazov
Jack London - The House of Pride, and Other Tales of Hawaii
Jack Walker - The Extraordinary Rendition of Vincent Dellamaria
Colum McCann - Let the Great World Spin
Niccolò Machiavelli - The Prince
Harper Lee - To Kill a Mockingbird
Emma McLaughlin & Nicola Kraus - The Nanny Diaries
Brian Selznick - The Invention of Hugo Cabret
Sharon Creech - Walk Two Moons
Keith Richards - Life
F. Sionil Jose - Dusk
Natalie Babbitt - Tuck Everlasting
Justin Halpern - S#*t My Dad Says
Mark Herrmann - The Curmudgeon's Guide to Practicing Law
Barry Glassner - The Gospel of Food
Phil Stanford - The Peyton-Allan Files
Jesse Katz - The Opposite Field
Evelyn Waugh - Brideshead Revisited
J.K. Rowling - Harry Potter and the Sorcerer's Stone
David Sedaris - Holidays on Ice
Donald Miller - A Million Miles in a Thousand Years
Mitch Albom - Have a Little Faith
C.S. Lewis - The Magician's Nephew
F. Scott Fitzgerald - The Great Gatsby
William Shakespeare - A Midsummer Night's Dream
Ivan Doig - Bucking the Sun
Penda Diakité - I Lost My Tooth in Africa
Grace Lin - The Year of the Rat
Oscar Hijuelos - Mr. Ives' Christmas
Madeline L'Engle - A Wrinkle in Time
Steven Hart - The Last Three Miles
David Sedaris - Me Talk Pretty One Day
Karen Armstrong - The Spiral Staircase
Charles Larson - The Portland Murders
Adrian Wojnarowski - The Miracle of St. Anthony
William H. Colby - Long Goodbye
Steven D. Stark - Meet the Beatles
Phil Stanford - Portland Confidential
Rick Moody - Garden State
Jonathan Schwartz - All in Good Time
David Sedaris - Dress Your Family in Corduroy and Denim
Anthony Holden - Big Deal
Robert J. Spitzer - The Spirit of Leadership
James McManus - Positively Fifth Street
Jeff Noon - Vurt

Road Work

Miles run year to date: 220
At this date last year: 67
Total run in 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269


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