Wise Government Bureaucrats helping us create value.
Update: More good news from Glenn Reynolds. “Without major reforms, entitlement spending will consume all federal tax revenues by 2052.”
We did it for the children!
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Farked47 comments to Farked |
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As a sucker on the GS tit, I’ll remain silent on this one (although I’m shocked but not surprised at the numbers) but would like to say that besides Lex, fark.com may be my most frequent website check. Ignore the commentary (it’s painfully leftist) but do check out the Photoshop contests. Good for a chuckle
Odd thing about this chart — you’ll notice back in the 40’s there were roughly half as many government workers as producers, call it a difference of 7 million. The disparity between their numbers remains roughly the same throughout the years, not in proportion but in total numbers. It’s as if, for every job our economy adds, government needs another worker as well (maybe to keep tabs on that new job?). One would have thought, in the 60’s as computers started taking over the raw number-crunching at Treasury and IRS and NSA, there would have been a blip, a drop in the government numbers or a rise in the productive numbers with a flatter government curve.
It would be interesting to see another line for the total employed outside of government. That would show the goods-producing vs the service-producing, which I’m betting has risen dramatically. Otherwise, there’s only 40M people with jobs left, and there’s just no way in hell 20M of us can support the remaining 280M of our population.
– Max
The problem has been the explosive growth of government.
Fifty years ago, half the Federal budget went to the Defense Department. More in wartime. If we held to that 50% rule today, the total Federal budget would be approximately $1.5 trillion…and we would have a surplus of around a trillion dollars for this year alone.
But the government grew…and grew…and grew. Fill this form. Pay that fee. Wait in line.
Let’s take a concrete example. As a society, we have decided that No Child Shall Go To School Hungry. A noble goal.
Therefore, the taxpayer pays for Little Johnny Poorboy to have a School Lunch program (which provides breakfast as well). And Aid to Families With Dependent Children. And Food Stamps. And Women, Infants, and Children support, too.
No wonder Johnny Poorboy is overweight – the kid has four bureaucracies trying to shove food down his gullet!
Personally, I think that Little Johnny can get by with three lunches…and I know full well that he can get by with ONE bureaucracy to feed those lunches to him.
If it were up to me, I would replace the entire upper management of the Federal bureaucracy with DOD personnel. DOD managers, whether military or Civil Service, know how to manage to a budget. Welfare agencies never have to.
Mike wrote: “…half the Federal budget went to the Defense Department. More in wartime. If we held to that 50% rule today,…”
Think of what we’d have – 600 ship Navy? No problem! Sorry, guys, we have to go on another long 3 month extended deployment. Yes, I know, it’s only been 24 months since the last one….. But they did revamp the mess decks to look like the dining room at the Fairmont, and installed a swimming pool on the 2nd deck….
George V.
Government employees, not meaning the military and some other categories that I have not thought of, should not be allowed to vote. Same thinking as Congress should not be allowed to set their own salaries and benefits.
I would not go that far…but I DO think that George Meany (a union leader) gave President Kennedy good advice.
Civil servants should NEVER be allowed to unionize. There are no outside economic pressures to counterbalance things.
The title of the article is somewhat misleading – “How The Government Payroll Replaced Goods-Producing Jobs” The government was not as implied, an active participant. The goods-producing jobs declined not because of government increases. They declined because our industry leaders logically but detrimentally determined they could produce more goods far cheaper with foreign cheap (slave or child ) labor, and produced without any of our environmental or other controls.
The better news would be to graph our service industry payroll increases, relative to government payroll.
Nevertheless, there is indeed a big problem here. I forget the author, but my old econ. professor often quoted, “Bureaucracy tends to propagate itself.” While true in all organizations, government provides the most fertile ground, as is painfully evident.
Two quibbles, flit.
1. Foreign labor isn’t automatically slave or child labor. Sometimes, it is just cheaper. You have impugned a lot of companies that gave workers overseas a chance to get a real job and improve their lives.
2. The goods-producing jobs declined not because of government increases.
And why did these companies decide to relocate production overseas? It didn’t help that they had to pay a lot of taxes to pay for all the government employees..
Fliterman, you left out another tidbit on the production sector (and I myself alluded to it but also failed to bring it to the logical conclusion). Labor can be replaced by tooling, machines, robots, etc… Unskilled labor is the first to be replaced. Skilled labor isn’t so easily replaced, but welders and machinists used to be skilled labor paid very good wages, now they’re replaced by welding machines and machining centers and a bit of software guided by a $17.50/hr fresh graduate from any engineering college can program those machines.
Supply and demand have met the cost curve.
The foreign manufacturing areas typically supply cheaper labor. Which, labor of the unskilled kind a la the Henry Ford assembly line “bolt this wheel on for 8 hours a day” version will naturally move to the lowest cost area. The skilled labor positions, the welders and machinists and such, they seem to have been replaced by machines in most areas where mass production is the goal so a machine can justify the inflexibility vs. the reliability they bring to the table.
So far everything obeys standard economic models. Until we get to the service sector.
If I can train somebody to answer the phone and change your cable TV account here, I can probably do so in India for a lower price. If I can train somebody to call you and conduct a survey here I can probably do that in India too. I can even automate the process through an IVR program that does voice recognition and keypress recognition. These are entirely unskilled jobs, something anybody capable of speaking and filling out a form can do.
So, why do we still have these service-sector jobs in the US? Why, indeed, if programmers and sysadmins and telephony engineers can VPN in from home to the office from a block away while on-call could we not place those jobs in India? They only need connectivity, and the speed of light being what it is the difference in response from Boston or Bangalore is fairly immaterial.
I don’t have an exact answer for this, I’m just thinking there’s a factor that’s not being considered beyond price that the manufacturing and service sectors want that can only be found here.
– Max
What’s supposed to happen when there’s more and more free trade is more and more specialization in what each country is comparatively good at. Countries with a lot of cheap labor (China, India, etc.) will naturally have a comparative advantage in simple manufacturing. Advanced economies like America (and Japan, Europe, etc.) are supposed to have comparative advantages in things like semiconductor design, aircraft manufacture, biotechnology, etc. The only problem is that this advanced comparative advantage is practically only going to start to emanate from better education in the advanced countries, primarily in the sciences and engineering. But Americans recently have decided to forego the sweat and frustration of getting an engineering or hard science degree for the hedonistic sex and four day weekend binge drinking parties of modern “liberal arts” majors. (At least, that was my personal experience of things at UCLA when I was getting my BS and MS in Aero-Engineering, where about 10% were getting hard science degrees.) Before the Navy I briefly worked for the aerospace industry. They were BEGGING for engineers from the American colleges. But not enough Americans were getting engineering degrees, so they hired more and more engineers out of Korea, China and India. Eventually some of those engineers went back to their home countries (seeing opportunities) and became professors or set up small engineering companies there, to the point that a lot of companies in the aerospace sector here are now practically forced to go to India even for the creme-de-la-creme work advanced countries should be doing, design and analysis.
Bottom line, Indians and Chinese go to college to learn engineering. Americans go to college to have libertine “fun.” Don’t be surprised when our good engineering and high tech jobs which we had the infrastructure advantages to not only keep but nurture, but instead chose to tax and regulate and culturally shunned, start leaving in droves too. The trickle that I fear turns into a flood has already started.
Which gets back to another one of my broken recrods: Limit non-GI bill federal financial aid for college ONLY to science, engineering and pre-med majors. If America wants to maintain an advanced economy we MUST have skilled labor. Almost everyone I went to college with was there on some form of government loans. And almost everyone was majoring in underwater basketweaving as a cover for taking a four year (or more likely five or six with intentional major changes and intentional sandbagging factored in) unsupervised summer camp delaying of reality. And culturally Mom and Pop didn’t seem too interested. Either it wasn’t their money, or kids are supposed to learn for themselves (parental guidance is a GOOD thing for the love of Jesus!), or kids are supposed to be free to do what they want, or whatever.
John Derbyshire hates the very idea of government parasitizing the productive folks, but has said that he might recommend his kids try for government jobs, they being the ones which will pay more than real jobs.
Jerry Pournelle said something about getting a cushy .gov job, saving money, and retiring early, using the bucks gained thereby to start a business and be a free man for the last part of one’s life. I betcha they close _that_ loophole right soon, now.
We are rapidly approaching the old Soviet model of economics. Basically, it went: We pretend to work, and they pretend to pay us.
Jesus wept.
Weep for The Republic. (a Pournelle quote)
Despair is a sin. (another Pournelle quote)
I’m serious about my proposal (although politically think it has no chance.) Government employees are supposed to only be employed at taxpayer expense in order to serve the citizen. Government employees should not have the right to unionize and propagate themselves for the sake of propagating themselves the way private sector employees have.
Agreed. They take the King’s shilling, and they play by the King’s rules.
Good salary, no chance to vote or hold an elected office while employed.
Are you ready for disenfranchisement to apply to the troops? Remember, it wasn’t extended to troops until fairly recently, (IIRC, Texas didn’t let soldiers vote until the 30s).
Soldiers get to vote, period — they have skin in the game and must answer to a military chain of command that’s directed by the government. Hence they’re a step removed from the direct consequences of their vote.
When DMV employees have to expect being shot at as a condition of employment I might consider allowing them to vote. Until then, they’ve no skin in the game, only a compensation via confiscation from others.
And how did Texas not let troops vote until the 30’s unless they were Texas National Guard? Federal troops would have rights to vote independent of state statute.
Remember, also, there’s nothing in the Constitution about a right to vote in a Federal election. Congress can pass law and we’re pretty much stuck with it in that regard, but for now it’s up to the 50 states. Those states are harder to disenfranchise than a few soldiers.
– Max
Troops have always been allowed to vote, both commissioned and enlisted. It used to be a point of honor for officers not to vote, so as to avoid conflict of interest. The first time Dwight David Eisenhower ever voted, was for himself, for President.
Voting is one thing and I’m on the fence about that. I’m convinced about unionization on the other hand. Can the troops unionize now? If so I haven’t seen it (not that I’d be for it.) SEIU shows that bureaucrats who get paid far more and who don’t risk their lives can . . . and with vunderbahr results for a government FOR the people.
Would you think those depicted by the red line are going to be collecting pensions when they retire? This is a gift that keeps on giving scenario. Farked is correct!
Many of those “blue line” jobs aren’t going to slaves, Flit. Our Silicon Valley is exporting thousands of engineering and manufacturing jobs to well paid folks in, of all places, Singapore.
Our high tech companies seek relief from the taxes it takes to support those on the “red line,” and other special folks that walked across the border into California. The noble social experiment has failed.
I appreciate a number of honest comments to my position, and I do agree with many. But to rebut a few:
Replacing labor with robots makes productivity sense. But unfortunately, robots do not buy houses, raise families, and buy cars. Without a market, our economy fails.
Taxes are indeed a factor of manufacturers moving abroad. But the other savings for the bean counters are legion and trump tax evasion.
While some might argue we are moving in the direction of Soviet economics, while perhaps true, it is like jumping up a foot or two toward the moon. In other words, ridiculous.
Government employees are indeed employed at taxpayer expense, and do have a duty to serve the taxpayer to the best of their ability. But when those employees are abused, when their learned recommendations are ignored, when they are short changed in work rules and benefits because of management incompetence, then a union becomes a necessity to balance the scale.
Pensions are mostly a thing of the past in the private sector. Indeed many workers who have worked for a lifetime earning a pension, finally retire to see that promised benefit suddenly erased by bankruptcy. But pensions do remain for most gov’t employees – fire fighters, police, and the military. I believe that is right. Do you?
Fliter, you noted that “Replacing labor with robots makes productivity sense. But unfortunately, robots do not buy houses, raise families, and buy cars. Without a market, our economy fails.” We have markets, else we wouldn’t be buying robots to make widgets to sell to those markets. It’s no longer like Henry Ford offering greater wages to his unskilled labor on the assembly line banking for the greater sales his workers would create buying cars from him. Today it’s selling disposable diapers made by machine to two-income parents who have no time to wash cloth diapers so while the diaper service suffers the dry cleaning shop owned by Vietnamese immigrants prospers. They, in turn, buy dry cleaning supplies from China and dry cleaning machines from Italy and somewhere down the line there’s an Italian washing diapers who wouldn’t have been employed before. Or we just buy stuff at Wal Mart made in China.
You know, global economy. What can you do for what price I consider worth spending the money on.
You lastly noted, “But pensions do remain for most gov’t employees – fire fighters, police, and the military. I believe that is right. Do you?”
Pensions are part of their employment contract, and should be honored. I believe that is right. If you’re the president of Fannie Mae or Freddie Mac and need another $400 billion (http://www.bloomberg.com/apps/news?pid=20601087&sid=a2Z5GnTAPcuo) to cover losses is it right that you should get $6M in pay for, I dunno, maybe not losing $500 billion? Seems these CEO’s could earn more in the private sector so a mere $6M/year is a step down and I’m sure they’re doing it out of sheer self-sacrifice and, you know, (http://www.breitbart.com/article.php?id=D9CPR7QG0&show_article=1) patriotism.
But if we’re going to gripe about the money being paid, then much like the joke about the expensive whore haven’t we already agreed upon the services to be rendered?
Kind of deflates that mountain of morality we were standing upon with respect to contracts.
— Max
Hey Flit
For those poor management abused government employees: If you can’t stand the heat get out of the kitchen. Serving your country is a duty, and you get paid with money taken by force from those who do produce value for carrying out that duty. Enlisted don’t get the chance to unionize against officers.
Getting taxpayer money is a privilege for a duty, pure and simple. Troops get squat and put up with far worse conditions. Why should cushy bureaucrats (who Michael Medved -I know I’m a knuckle dragging radical right winger- recently did a piece on and revealed they make on average TWICE what the private sector employee makes on average) not only get paid ridiculously high, get unheard of medical benefits, get pensions that would make any private sector employee weep with envy, AND get the right to unionize to get the politicians (The Obama-SEIU link is the strongest operative factor in national politics right now with Andy Stern the number 1 visitor to the White House) to keep them fat and happy at the public trough while they produce nothing of value?
No unions for government employees.
“But when those employees are abused, when their learned recommendations are ignored, when they are short changed in work rules and benefits because of management incompetence, then a union becomes a necessity to balance the scale.”
Flit – sounds like yer running for local union boss. Ever try to fire a government worker? Ever try to “suggest/require” increasing productivity from a gov worker? hell, it’s easier to have a snowball fight with the devil. Since the government is Constitutionally separated from “religion” why are the post office and IRS closed on Christmas and Easter? Make ‘em work. Why do they get paid holidays? Make ‘em work.
Government is the capital of the land of calculated inefficiency.
I’d like to see an example of where unionized employees of the government are “having their inputs listened to to make things better, etc.”. Unions are about creating a cash flow- for the union, period. Such cahs gets used for a lot of things most having nothing to do with the employees.
To follow Flit’s line of logic, we would have people back working in the fields harvesting grain with a scyth. The US auto companies are the model for what happens when you don’t continuously drive productivity in a competitive world. It took fifty years for them to die, sucked dead to a large extent by the unions, as they frittered away, year by year, the huge advantages they had accrued up to their zenith in the 1950s.
The US is still the largest manufacturing nation in the world, larger than China. We make things that are not particularly labor intensive and require complex knowledge. Capital equipment mostly – airplanes, medical equipment, industrial equipment, etc. We do it with fewer and fewer people per unit of output every year. And that’s why we can still do it competitively. It’s the exact same story as agriculture. The issue is not that we don’t employ enough people in ag or manufacturing, it’s making sure we invest in developing the next wave of job creation.
Finally, anyone who thinks that non-US jobs are driven by child or slave labor is simply ignorant of the facts or conditions in US-owned companies abroad. Believe me, go abroad and find out that the masses would all love to work in a US-owned company.
Flatlander
It’s only with a hint of irony (not humor) that many people point out the GM is now a medical insurance plan with a small (money losing) auto-manufacturing front company attached. Thank the UAW. Interesting too how the Government is there to protect them when cold reality has intruded on their socialist dream in the marketplace. Wonder how much longer Government can wish the danger away while plugging their eyes and singing “LALALALA” at the top of their lungs than the union bosses and spineless managers were able to. (But since the government can use guns to collect money from everyone in the country, sadly it could be a lot longer . . .)
GM is now an insurance company that happens to have a minor division that makes and sells cars. Contrast with 60 years ago when Kaiser was a shipbuilder and car manufacturer who had a minor division of health clinics operating at a loss at each of the factories. Kaiser’s idea was a healthy workforce was a productive workforce, and placing the doctor at the job site made it more likely the employee would see the doc during breaks or prior to shift and would reduce the time it took for the worker to receive services.
Today I have to take three hours off of work to get a cholesterol test. 20 minutes driving to the doctor’s office, 20 minutes checking in and getting that all-important insurance information delivered, another 30 minutes filling out forms, an hour or so of perusing a 1997 issue of Readers Digest or Sports Illustrated, finally into the exam room where I can read Good Parenting magazine for 30 minutes until the nurse or orderly comes by. Blood is drawn, I cool my heels with a Bass Fishing Monthly for another 30 minutes until the doctor arrives and asks if I’ve any questions about the process so he can say he actually saw me. Having no questions, I’m out the door (and he’s submitted his office visit fee) and back at the office 30 minutes later having had to stop for a burger along the way because I missed my lunch hour in this whole fiasco.
Kaiser had the right idea. I wonder how many people simply don’t see a doctor regularly rather than lose the vacation or sick time that it takes to do the whole transit-wait-read-wait-brief_appearance-transit boogie?
– Max
Mike Rowe (Dirty Jobs) on work. Interesting insights from a man who makes his money observing those who do the really hard tasks in our society.
Don’t not listen to the entire thing (20 min), even if his path to his understanding is an offbeat track.
Flight Lead is a native Michigander — I have a mixed marriage, I’m afraid. From time to time, I will rag on the UAW pensions, and the lunacy of their members to expect their pensions to be paid despite the financial health of those obligated to pay said pensions.
She calmly replies, “And how is that different from the financial health of the entity obligated to pay YOUR pension? Think you are any more deserving than those UAW members are?”
Don’t really have a good answer to that one. Devolves into one of those “yes, dear” moments.
Worthy of a long post, however, all the UAW members did was pay dues, get paid far more than they were worth by any reasonable measure, enjoy great benefits and make excuses about their corrupt leadership (local & national). The UAW members I knew were quite happy to live in their mini-Socialist bubble.
How much physical risk could a UAW member have? None.
How much physical risk could a military member have? Everything.
How many times did a UAW member have to move their family during the course of their career? None.
How many times did a military member have to move their family during the course of their career? For many, if not most, a lot (too damn much IMO).
From a native Michigander
You certainly can justify military pensions, based on those hardships, for many. But just look at your average 5,000 folks on a CV. Outside the aircrew, and the flight deck crew, how much physical risk is there? IF physical risk is the justifier, then how do you justify a 20 year pension for a yeoman? Do you justify benefits for all, based on the risk of some?
The move item is the same thing — certainly, people get moves they don’t want, at times they don’t want. But how many of them are to advance one’s career? And for those, how is that different than the guy advancing up the career ladder at Sun Microsystems?
And to open a real can of worms, if risk and diplacement are the justifiers, then how do you justify the expectation that CSRS retirements get paid?
The CV can still get hit by a missile or torpedo in an open shooting war and that yeomen will be just at risk of dying as the plane captain on deck every day in that scenario. Just being in the military you’re basically signing up for the fact that you CAN be asked to knowingly go into a position where death is a possibility even if not a probability, in a way that a bureaucrat at the Dept. of Education isn’t. The Marine rifleman certainly faces more frequent and dire danger than the CV yeomen, but the principle is the same for both of them and different for non military government employees (firefighters and police exempt, they too face danger beyond a normal level and should be entitled to pensions.)
Along these lines consider Dentists, for example, who , although Navy, are put ashore in high combat zones with Marines and put in great danger. Under normal routines Navy Dentists are shore based in rear areas or assigned ship-board. However the crap-shoot that is “needs of the service” may see them put on the front lines supporting Marines at the front-lines.
In Vietnam I ran across a Navy Dentist who had been a helluva tennis player at Lake Forest College, Ill just outside Chicago. I had remembered him from when he played against my father’s teams when I was in HS. He was stationed at Dong Ha up near the DMZ with units that were in heavy fighting. He was in shock. “I don’t think I’m going to make it out of my tour alive,” he told me. We came under motar attack the night before we came down here (we were both TDY in Saigon for, of all things, an inter-service tennis tournament. Yes, I know….Salvadore Dali time…) and the guys in the fox-hole next to me took a direct hit.” “Cheer up, I told him,” thinking he was near the end of his tour as was I, “another month or so and we’ll be out of here.” “You dont understand, ” he replied, “I’m just beginning my tour, this is only my second month!” (The Marine tour was 13 mos.)
To this day I don’t know whether he lived or died….
Dentists in the Public Health Service or Community Health Clinics face no such
possibilities….Let alone Dentists in pvt practice.
Prowler, I don’t consider myself an expert in the risks to be found aboard a carrier, but I can tell you that in the engineering spaces a burst pipe can lop off an arm or leg from a few feet away. Live steam has the grand habit of condensing to form visible steam several feet from where the high-pressure leak is at, and in enclosed spaces all you hear is a sound not unlike a jet engine in an echo chamber.
Then there’s the dangers of fire. You could be the division barber and still roast if a mishap happens.
Electricians get to work on 5vdc circuits with enough current behind them to weld your spine if you touch an energized circuit.
Only takes a bit of a tug on the wildcat hauling the anchor chain aboard to rip it out of the deck and try pulling it and you out the porthole.
Underway replenishment involves shot lines which are, you know, weighted ropes shot at you by somebody else with a rifle aimed in your general direction.
300 gallon vats of steamed broccoli can feed an armada, or cause 3rd degree burns over 90% of your body with a pipe rupture. The poor guy baking the bread in that galley probably never knew what hit him.
Let’s not even talk about what happens when the ship is hit.
Kind of like an Army dentist, common duties may not involve combat but nobody bothered to tell that to the enemy, and the enemy has the maddening habit of attacking locations rather than jobs. That’s why we operate as a team, because we’re all at risk and we all back each other up. From the sailors in the galley on the USS Cole who never expected to fight an attacking boat, to that yeoman tasked solely with projecting powerpoint slides on a screen inside the Pentagon September 11th and had to fight a jet aircraft and the damage it caused, when you agree to wear the uniform of a warfighter you also agree to the same risks and obligations as those carrying the rifles.
– Max
I think this is reflective of a lot of upheaval as we transition yet again in how our workforce is made up. I heard the other day how the manufacturing GDP in this country would, if taken by itself, still be larger than most if not all other country’s GDPs in total. The Manufacturing GDP is over $4 trillion and Japan’s GDP (2nd largest economy) is in the same ballpark.
Of course manufacturing employment is way down since productivity (enhanced by machines, etc) is way up. Not all the jobs went to China a lot of them just went away just as all the cotton pickers of old got replaced by machines, etc. So, like most things, its not so simple. Now unionizing workers to protect those jobs might keep some employed for awhile just as railroad unions kept firemen employed long after there wasn’t any fire to man on a locomotive but, in a global economy, such tactics run head on into the fact you will compete with other countries who don’t adopt such progressive (might I mean regressive) ideas.
The knee-jerk reaction of progressives is to blame big business which, while an easy target, ignores their reality. It is just as idiotic to defend big business as they have no motivation to pick winners and losers from a national policy perspective as they increasingly live in a global marketplace and are motivated quite well via tax and regulatory policies to do the short term gain thing (gotta meet those quarterly numbers lest the true power in the world on Wall Street and elsewhere come down hard on you).
So, if we want to protect our economy we have to find a way to create jobs for our people. That requires investment and education neither of which the government (which is highly unionized in this area at least) has prove worth a damn at. And so as producers produce with less people required government evolves into an ever more inefficient blob that can’t balance its books, defend its borders, or win its wars (since it can’t even seem to declare one properly after all). I might add it can’t seem to avoid getting taken to the cleaners in a trade deal either.
So how exactly do we expect this beautiful monument to our collective stupidity – our government – to solve these problems? Oh yeah – let’s try the increasingly looking more like the Soviet economic model – you know the one China can’t run away from fast enough and worked so well for the good old USSR.
OldT6
One of my favorite John Adams quotes is this:
“I must study politics and war, that our sons may have liberty to study mathematics and philosophy. Our sons ought to study mathematics and philosophy, geography, natural history and naval architecture, navigation, commerce and agriculture in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry and porcelain.”
It seems to sum up a pretty good progression of how societies can grow. At the base is the study of politics and war to keep liberty safe from both foreign (war) and domestic (politics) threats. Once you have that base (and have kept it!) you can study practical engineering and science to get prosperous and provide for material needs and wants. Once you have security and prosperity you can work on art, things that make society beautiful and enjoyable to live in.
Although a good guide I admit it’s vague and theoretical, and that trying to apply it in the real world is always brings up unexpected problems. You only need so many people in an economy to serve in government and the military (and economically speaking the less the better, although widespread military service of a few years for the young can socially serve to give more people common experience). Very few people have the natural talent or inclination to be artists and architects (and, it’s off topic but modern culture has f’ed those all away. Jackson Pollack and Le Corbusier have taken any concept of excellence, beauty and using art to answer human longings for something higher out of the picture and turned modern art and architecture into an ugly cesspool that most humans can’t actually connect to. I would have had them dragged out and shot, but that’s just me.) Some more but still overall few people have the intelligence and drive to be scientists, engineers, doctors, inventors, etc. So you have a good swath of “average Joes” out there that you need to have employment for. The era of mass production provided that, and although we often hear about the drudgery of factory jobs at least factory workers could look at the dozens of cars produced that day and go home knowing they physically contributed to them. But with the automation you point out today’s service based economy doesn’t provide Blockbuster check-out clerks that same satisfaction that they did something tangible and a recent survey found that job satisfaction in America is at an all time low. (Or at least 20 year low which was how long the survey had been in existence.)
So, with automation coming in, what does an economy do to provide the social benefit of high employment in somewhat satisfying jobs? I’m too dumb to answer that question and don’t really need to, I’m putting my faith in the free market and more engineers and scientist who can develop things that American average joes can produce (due to a more diverse product base, think of the Howe and Howe brothers employing a dozen or so guys as an example, but something that can be applied anywhere from micro-manufacturing, to home improvement, to beauty salons for the ladies, etc.) But it’s an interesting problem if you ask me and will be fascinating to see what happens.
One other comment on the “service economy”. Who exactly are they and what are they producing? I liken most to what I call the “parasite” economy in that they live off the fruits of others. How many accountants do you need to do the taxes of, say farmers and manufacturers, if there are less and less of them? Ditto lawyers (well they have invented their own way to generate work – having their clients sue each other). I’m a tiny manufacturer – I get BOMBARDED of late from consultants galore all trying to tell me how to run my business all for fees mind you several times what I can afford to pay myself. Now I submit two possibilities – a)I am so stupid I can’t possibly figure out how to run my business in a manner that I could earn what they think they are worth or b) they are simply looking for another productive tit on which to suck.
The guy who services my car creates value. They guy who wants to ride my coattails drains it. The rest of the service economy is delivering pizza for minimum wage. Hard to see how we sustain a middle class on that model.
OldT6, I’d submit that the service economy is they guy who services and changes the oil in your car, maybe your IT guy who tells you once a week that your computer problem lies behind the keyboard, and oh that splendid wife of yours who perhaps prepares meals and thus saves you the time of microwaving a can of Dinty Moore.
They produce nothing in this regard, they’re not producers in the classical economic sense. But they save you time and effort that you can devote to producing things. That’s the whole division of labor thing, you do what you do best and I’ll do the same and we’ll probably trade services at some point when we’ve a need.
I’m in IT, I make the 1’s and 0’s line up and go where they’re supposed to, keep those computers running, etc.. I don’t produce a darned thing. I allow others who do produce spend more of their time producing rather than doing my job.
– Max
Hat tip to Maxdamage for getting me thinking:
An interesting chart for what it is trying to show. What I find even more interesting is that if you consider that there are about 300 million residents of this country, they are being supported by only 17 million of their number. Roughly 6% of the country supports the remaining 94%. What I also find interesting is that since the great depression, for every goods producing job that was created a government job was also created, until about 1972, when apparently real jobs went flat while government continued to expand. If I also want to trend past 1999, it appears that Y2K was really the end of civilization as some had predicted.
A huge part of our personal spend outside of housing and transportation goes into services.
If you look at how much we all spend on “stuff” as opposed to “services”, you would ask yourself why anybody would want to be in manufacturing, when there is so much more spend growth on everything else:
medical and pharma, education, cable-internet-phone-media, entertainment, travel, government – all growing like weeds.
Making stuff and selling it is way too damn hard
In the 50s I was a big Sci-Fi fan. I used to read numerous stories about futeristic societies in which all work was done by robots. Even as a 5th grader with no real-world experience and no education in economics or finance, I would sit back, pause, and wonder to myself about who would provide the money. How would people purchase things as mundane as candy bars from vending machines? Where would the money come from if no-one was working–if robots were doing everything? And who would decide how much everyone got?
According to Thomas we’re 94% of the way to my Sci-fi worlds of yore where no one works. And I still haven’t come up with an answer to the questions I asked myself as a 5th-grader…
Because, while the obvious answer to our present condition is that increasingly it is the STATE that decides who gets what and how much, what happens to us when, as Dame Thatcher so unerringly put it: “the Socialists run out of other people’s money?”
I’m thinkin’ Zimbabwae…
Come on, cut the moderation crap! Its too early in the am to be aggravated.
The bigger issue isn’t whether or not there is a justification for anyone’s right to a lifetime annuity but rather where should those annuiants be in the line for payment? FL’s point is that I shouldn’t expect the UAW members to be any further back in the line for theirs, than I (and based on the heat, many here) think I should be for mine from Uncle Sugar.
All the blame assigning, and semi-tortured justification doesn’t change one inescapable conclusion: just like the UAW member, I had an agreement to work so many years in return for something, and just like them, my guarrantor is upside down.
Just wait – the time is coming for means-testing of military pensions. The trial balloon of higher Tricare For Life premiums for retired officers is just the first, and won’t be the last as the fiscal house continues to crumble.
A most interesting thread.
From what I gather based on the comments above, the decline in people actually having a job that creates things goes away as China, India, etal, can do it cheaper. There seems to be little concern about this. Then why would anyone be shocked at the number of public employees actually increasing? Where else can people find work? I’m not 100% sold on the free market magically providing good jobs in other industries when even IT is outsourcing. As others have noted above, and elsewhere, the free market as it is currently set up in this country seems to only benefit the few who are connected, have the means, etc.
I am in no way advocating anything like nationalising industries, etc. That will not work in the long run. But I do see a place for gov’t incentives to retrain workers, retool factories, and most likely retool the entire domestic economy. It’s an overused phrase but this recession is truly different this time. I don’t think a total hands’off, gov’t just should step back and left people suffer, etc, approach advocated by many will work. I also don’t think the massive bailouts using taxpayer cash will work either. Is there another way?
I guess my question is – okay, what will these people do for a job? Not everyone can be an engineer, doctor, etc. I like the idea of gov’t loans for only certain areas of study that may actually increase innovation, design new products, new treatments, etc. I guess my question there though isn’t that a case of the gov’t choosing a winner? Why not let the free market decide which types of education are more valuable? It seems to be doing that already with law degrees, psychology, MBA’s, accountants, etc. I’m not sold on the idea that more engineers and scientists will solve the problems, either, as so many companies are moving R&D work offshore as well. So what’s left? We’ll all become barbers and give each other haircuts?
I forget which poster mentioned trade polices above. I think it’s past time to stop what I have seen as totally one-sided policies that have moved so much work offshore while other countries are free to export to us with no restrictions. The only people I can see gaining from such a policy is, again, the few with the means and commections to exploit the policies. Usually this means large coporations.
I’m not a Nader fan by any means. He did have a good observation on corporations. Originally when a company was incorporated, said company would have to go to Congress every 10 years to justify still having to be incorporated. I would have no problem with that being enforced now. Hopefully I am remembering this correctly!
So anyway, there’s my ramblings. I see a lot of interesting comments in this thread. I am very disturbed at what Mr. Scott mentions above in regards to the idea of means-testing military pensions. There’s one idea that needs to be terminated with prejudice.
regards,
Phalanx08
Phalanx,
I agree this is a pretty interesting thread. I am one that puts my faith mostly in the free market, but also proposed government financial aid to engineering and science degrees only, which is admittedly an indirect form on intervention. This was based on my experience in industry, where offshoring R&D efforts was sometimes driven by cost, but often driven by a lack of engineers here (where the company would, for many reasons, prefer to do the work and was willing to pay a certain premium for it) and they were forced to go abroad to find them.
Now, government re-tooling of industry from the blinkered ivory towers of Washington by a few hundred or thousand poli-sci, politically appointed bureaucrats who will face no reward or consequence for success or failure is almost certainly bound to pick worse winners than the distributed, in the trenches decisions of tens to hundreds of thousands of engineers and managers personally vested in coming to the best solution for themselves. That’s one reason why I support the free market. But you are right, this doesn’t necessarily mean we’ll come out on top, and very well could mean we start losing jobs and much of our economy. Which gets to the second reason why I generally support the free market, although it’s not a warm fuzzy. In the free market you get what you deserve, and its thus morally superior in my little universe. If American college students are going to college to party, drink and f&%k (which they are) without much thought to actually getting a job skill, while Chinese and Indian students are going to some of the best engineering colleges on the planet and studying their butts off (which they are), well, it doesn’t take much to see the writing on the wall there does it? What grates me though is that most of the American students wasting their time and pissing away their (and the nation’s collective) future, are also wasting YOUR money since they’re on federal financial aid anyway. So I’ll break with my principals to support federal financial aid for science and engineering only.
Ideally too, as India and China catch up with us making rubber dog toys and hub caps (using exaggeration to make a point more clear) this should free us up to make new products, like personal jets or 3D home entertainment systems. Who in the 1890’s ever imagined massive swaths of people making cars vice the few craftsmen at the time who made the horse drawn buggies. Who in the 1920’s ever imagined people making TV’s? In the 1960’s who predicted how many people the computer and then internet industries would employ? I think our best bet (and most unsettling and un-comforting) is waiting for something we haven’t thought of yet to come along. Scientists and engineers tend to be better at making those things a reality than psych majors.
But it does get to an interesting philosophical question: At what point is enough materialism enough? For the Amish it was apparently the year 1600. But it might be natural to see more people moving away from mass production to things more in line with my John Adams quote: more artists (even if they suck), more chefs (with prosperity why not eat out more and live life to the fullest?), more landscape designers, more beauticians, more clothing designers, etc. (A completely ‘nother topic but materialism no matter how far it goes without a moral base will be unsatisfying, but built on that moral base the more can be merrier IMO.)
Last, although I certainly prefer the free market I try not to hang myself with my ideologies. Taken from a game theory perspective some US government intervention may become necessary when other foreign government do so much intervention themselves. (And like almost all game theory results, this leads to a race to the bottom with the lowest total production.) A historical example which may be apt but which I know very little about is the experience of the Dutch in the 1600’s or so. Under the United Provinces the Dutch were the most free-market oriented free trading economy in the world and became greatly wealthy as a result. However, the English finally picked up on this, and through a little free market reform in their domestic economy, and a lot of British naval intervention to forcibly take and monopolize international trade, in a very un-free market manner, became far more powerful than the Dutch, maybe got a little richer, and the Dutch just got pretty much hosed. Possibly something similar can be happening to us right now, and some, preferably minimal, government intervention may be necessary just to play defense. My college aid proposal is made in that vein.