Honey, They Shrunk the Private Sector
There’s a reason why Americans who don’t happen to work for the government or directly benefit from its largesse are not sensing an economic recovery. For them, it’s mostly not happening. ADP’s January employment report showing 22,000 private-sector jobs lost, the last available jobs-related information available when this column was written, only confirms that feeling.
A look at what has happened to the nation’s inflation-adjusted gross domestic product (GDP), the value of all goods and services produced in the economy, during the last six quarters is sadly instructive. Comparing the fourth quarter of 2009 with the second quarter of 2008, we see that:
- Even after six months of “recovery,” the economy as a whole has shrunk by almost 2%.
- Uncle Sam’s level of annualized consumption and “investment” has grown by 8.5%.
- Despite the incessant pleadings of poverty by most state and local governments, their consumption and “investment” have hardly changed.
- What remains, i.e., the private sector, is 3% smaller.
The private-sector shrink is really about one percentage point higher than indicated, because the above data treats General Motors and Chrysler as if the government and a meddling Congress aren’t in control of them. This of course is nonsense.
Meanwhile, the past year and a half has been a great period to be a federal government employee. While the private sector has shed almost 6.4 million jobs on a seasonally adjusted basis during that time, federal non-postal employment has leaped by over 150,000, a stunning increase of over 7.5%. Two-thirds of the increase occurred during the first eleven full months of the Obama administration, even though the severity of the recession was drop-dead obvious well before he took office. Even higher federal employment is on the horizon.
The burgeoning ranks of federal employees are in an enviable situation compared to their private-sector counterparts — or perhaps I should say, “underlings.” In December, USA Today reported that:
- The average federal worker’s annual pay is over $71,200, compared to just over $40,300 in the private sector.
- Almost one in five federal workers makes $100,000 a year or more — “and that’s before overtime pay and bonuses are counted.” It’s also before considering a far better than average benefits package.
- In late 2007, “the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.”
- Effective in January, despite a virtually zero-inflation environment and while pay and jobs were still being slashed in the private sector, a typical federal worker saw his or her pay increase by over 3%.
There is little doubt that whether or not the economy ever returns to something resembling normalcy again, the government’s influence on our daily lives, absent a historic pushback, will be demonstrably larger.
November, 2010 is when the obama neutering is complete. Both houses will have extensive Republican gains. And no, it will NOT be a return to the Bush years of idiotic spending.
Get ready to tighten your belts and grow veggies in the yard…
Good 1 term President, LMAO
President John F. Kennedy in 1962 signed the disastrous into law the bill that allowed government workers the right to unionize nationwide. Yes, this madness began only 48 years ago. It has resulted in unbelievable grief to government entities throughout our country. Many of them will ultimately be forced into bankruptcy. This law must be reversed—if we are to save ourselves. Of course, this will not be easily accomplished. As matter of fact, it will probably cause serious family disagreements. Those employed in the government sector will most assuredly continue to lie to themselves. They will not want to face reality.
When I watch the POR show on parade on various media outlets, my first inclination is to change channels as fast as I can. However, it is important for us to keep up with the lies perpetrated by this three ring circus, led by the ringmaster, Barack Obama. As entertaining as it is, watching the careful balancing act of reality vs illusion, especially the illusion of competent government put forth by Democrats and a couple of Republicans, it is at the same time discouraging to realize that the circus is not just for entertainment, they are actually introducing bills and passing them.
They live in a world of clowns and oddities and truly believe everyone else occupies it too. Reality is hidden behind a mask of greasepaint and curly wigs, while continuing to try to stuff 59 Democrat senators into an ever shrinking little vehicle that has reached its capacity to carry them any further. The name of the vehicle is well known – The “Cap & Trade, Stimulus, Health Care Overhaul, and Card Check” SUV.
The clowns forget that the American people are starting to read the fine print on the price sticker on the window and are starting to balk at the asking price. The clowns forget the simple fact that, hey, we are out of money and cannot afford the damn thing. They forget that when the warranty expires in November, we will buy another vehicle. One that hopefully will limit the number of occupants and prohibit clowns from getting a free ride.
There is little doubt that whether or not the economy ever returns to something resembling normalcy again, the government’s influence on our daily lives, absent a historic pushback, will be demonstrably larger…government has become bigger, bolder, and more intrusive, while a worried private sector has contracted. Is there any good reason to believe that this has not been part of the plan all along?
No.
Jobs saved or created (whatever) as a function of the Porkulus are largely bureaucratic, government jobs, inflating the size of government in constantly upping the number of small-minded, small-thinking micromanagers. When your mind is as microscopic as the P-O-R hive mind, it’s impossible to respect and understand what the unfettered, free human being can achieve. Those who would “pole vault” over the wishes of the American people, à la Pelosi, on healthcare and everything else under the sun are likely jealous of achievers.
It’s difficult to not see a nefarious purpose, an intentional agenda, in the growing of the government bureaucracy to the exclusion of productive human activity where people actually do things, produce things.
@4. tanstaafl: – It’s difficult to not see a nefarious purpose, an intentional agenda, in the growing of the government bureaucracy …
Yes, it is difficult, especially if you look at the aftermath of similar efforts in the past.
David Thomson: I agree wholeheartedly. I would support a law, better yet a Constitution Amendment, that prohibits the federal government from ever negotiating or contracting with any union.
The problem is there is nobody on the other side of the table. It’s just the union negotiating with the politicians they bought with campaign contributions. Nobody in the room is representing the taxpayers.
The SouthWest, particularly Texas, has a great
new business opportunity; Providing assistance
to those relocating from, or taking refuge from,
the states which will be going bankrupt soon.
As a bonus, none of those people will be voting
for a Big Government, Tax-and-Spend cnadidate.
Growing the government bureaucracies, unionizing the bureaucracies, and politicizing the unions sounds like a sure fire way to lock votes and nudge the unemployment figures, while gaining a greater control of the private sector. Government agencies account for 50% of the health care costs, so tipping the entire insurance cost to the rest of the nation is another artful dodge at covering their inefficiencys and stealth taxing. Accountability becomes a hold-your-nose campaign theme, which we want to believe.
The Two Americas bi-polar theme grows louder than lawyers in love:
The government is broken, we need more government.
The debt is growing, we need to raise the deficit limits.
Special interests are corrupting the system, bring in the lobbyists.
The banks and big business need to be punished, we need more jobs.
Illegal immigration is breaking the country, push for amnesty.
The people are rejecting our ideas, increase the advertising budget.
The stimulus did not work, increase the stimulus.
If you run into a wall at 50 mph and you don’t go through, try 70.
“But the key to understanding what has transpired is accepting the truth about when it really began”
Until people stop playing politics with simple economic history, the solution will never be presented; Instituting the Petro Dollar / petro currency in 1971 and 1973, as support for the US dollar is what placed the USA on a suicidal path it cannot avoid.
Within a few years the US economy will be completely hollowed out and collapse the US Dollar. When that occurs the Chinese Yuan and Euro will replace the USDollar as currency of choice, and USA will be relegated to the pages of History.
The USA rose quickly, and is falling even faster. Its not too late, but the discipline to prevent what will happen is not available with the citizen any longer.
It is far easier to play the political game.
Never has one administration has such miniscule results and spent so much money to get them.
In fact we actually have, after all the money was spent, increased unemployment over the term of the spending.
It’s amusing to see the look on liberals faces when you get to corner them with this. They will sputter about Bush, Bush, and Bush..but if you can force them to be honest. and ask them what they would have done if they were president, only the self described socialists would answer that they would so something like Obama is doing
Everything the administration has done since taking office is exactly opposite of what needs to be done to bring about an economic recovery. I’m starting to believe their actual intentions are to make things worse.
Why is it when we want wars in 2002 that complaining about spendinding was considered un patriotic. And now that we have to save our poor and the working folks that spending money is bad/\/?#
Anyone of you rich kids got an answer for that?
Im listening…..America is listening….
Hi, just wanted to ask if anyone has seen a significant dip in the bonuses being paid to the CEO’s of the Fortune 500? I haven’t. That being the case
why do you all fall into the trap of assuming that it is better to be non-unionized? Why is it okay for the CEO’s (and other’s in the top 1% of the earnings pile.) to have 90% of the wealth while the rest of us need to be content with the other 10% being distributed to us? I would think the question to ask would be why can’t we all be unionized and share the wealth and the jobs out fairly to all? Instead of saying that the current administration is doing something wrong by employing people when there are fewer private sector jobs. Oh, and one more thing, do federal employees by there very nature not do any work?
Obama wants the Federal Government to grow even larger while the private sector shrinks; he wants to be a dictator. However, I do agree with Jimbo Ellis (#1) that November 2010 will neuter Obama, but I believe he may even quit since his rigid Leftist ideology will not allow him to work with Republicans. He will join his fellow washed-up Corruptocrats down the toilet bowl.
#13
> Hi, just wanted to ask if anyone has seen a significant dip in the bonuses
> being paid to the CEO’s of the Fortune 500? I haven’t.
My company (electrical generation, transmission, distribution) has. Executive pay frozen last year. All bonus cut in half at all levels, no exceptions. 3 years ago CEO gave half of his pay and bonus to charity. The execs aren’t hurting — but they are not all rooting hogs either.
Poor Citizen: I keep trying to convince you to research first, type second.
http://www.cato-at-liberty.org/2010/02/01/five-decades-of-federal-spending/
Mr. Blumer has a point. Rather than blocking light and converting it to waste heat, it’s better to employ diffuse material to eliminate point-source light. People prefer onmidirectional light. One need not shade the offending rays, but instead reorient them.
Alex: No one “instituted Petro dollars”. Even if they did, what you say does not logically follow. You are on some loony hobbyhorse here.
This is all a result of the general assault on capitalism and productive capital by the Democrats these lase 60 years.
Do away with this and we will be fine.
Radically limit government size and power, de-unionize, lower taxes, radically cut back regulation and re-think “Globalism” and we will be just fine.
Wholeheartedly agree that we need to eliminate public employee unions. These vampires have already sucked California dry, but Comrade Obama thinks the California model is something to be emulated. He seems naïve, but make no mistake he knows what he is doing.
Wealth is not distributed, it is earned and accumulated. In fact, wealth and income are two very different things. You can make $100,000/year and be deeply in debt, meaning your income would be in the top ~10% of income, but have negative wealth, placing you at the bottom of the wealth spectrum.
And yet Obama speaks of “public service” as though it were comprised of long hours of hard, thankless work with little financial reward. In fact, he would have tax payers relieve “public servants” of their education loan obligations so heavy is their burden. Is the move to bigger, bolder, more intrusive and more expensive government intentional and deliberate? Oh, you bet.
“the past year and a half has been a great period to be a federal government employee. While the private sector has shed almost 6.4 million jobs on a seasonally adjusted basis during that time, federal non-postal employment has leaped by over 150,000″
For this to make real sense, in addition to excluding postal workers, it would also have to exclude the many thousands now being hired for the census. Can someone supply that adjusted figure?
The Marxist Rot…House of Kennedy 1962
SEIU, AFSCME, NEA, AFL-CIO, Change to Win
Take down the Soviet unions and the country will flourish again.
Great link:
The Grandfather Economic Report
http://mwhodges.home.att.net/piechart.htm
“7 decades ago, when many of today’s senior citizens were children, just 12% of the economic pie was dependent upon GOVERNMENT…Restated, 12% of national income was consumed by government spending back then. This left 88% of the pie to the productive PRIVATE sector. At that time the private sector was 7.3 times larger than the government share. America WAS 88% FREE and 12% socialistic.”
“NOW, look at the (chart) for today. The government sector doubled its share again – from 22% of the economic pie in 1947 to 45% of the economy today, shrinking the private sector share (chart) of the economy an extra 21 points – - caused by even more expanded socialistic spending (not intended by our nation’s founders), at rates many times faster than growth of the general economy. Now the productive private sector (having lost 28 points) is not much bigger than the government-controlled share of the economy; a long fall from its prior position of being from 5 to 7.3 times larger than government. American has become 45% socialistic, leaving only 55% FREE, a tremendous move from the first chart of 12% socialistic and 88% free.”
The only way we will be able to shrink the federal beast is to get a lot of middle class jobs in the private sector. Given the lust that so many companies to outsource, right size and arbitrage wages down by any means possible I can’t see that happening.
Also the effects of new technology has been job destruction rather than job creation. If you doubt me, check on the condition of the video store, newspaper, EMI records or even the clerk at Home Depot (replaced by automated self checkout) . I suspect for every job created in the tech industry (that hasn’t been outsourced to India) five will have been destroyed.
Unless we find some way to reverse that trend and pushes wages up we odds are you will pay 75% tax and work for the government sooner than later.
Pay well or be socialized
25. While automation tends to cut jobs, it also tends to increase wages for those that remain. It does the country no good for companies to pay high wages only to have them put out of business because their prices shoot up. What we need to do is eliminate regulations so businesses can get back to business.
“Why is it when we want wars in 2002 that complaining about spendinding was considered un patriotic. And now that we have to save our poor and the working folks that spending money is bad/\/?#
Anyone of you rich kids got an answer for that?
Im listening…..America is listening….”
Are you serious? Do you really think doling out $100K+ sinecures in the Transportation Department to a bunch of political hacks has anything to do with trying to “save our poor and the working folks”? If you really do think this, I want some of what you are smoking, becuase it must be really good s&%t!
There is a tremendous difference between the Federal government doing that which it is required to do (e.g., defense and fighting wars) and doing what it was never intended to do (e.g., welfare, handing out taxpayer money, excessive staffing and excessive pay of that staffing).
The only problem with liberalism is that sooner or later you run out of other people’s money to spend. Defending our country is a necessary function of our Federal government; dishing out handouts is not.
This morning I heard that with the Federal government issuing a snow day in DC about 230,000 government workers have the day off today.
My goodness! How are the rest of us going to survive the day without the crucial work and productivity of these 1/4 million people adding to the economy. Wait a minute…..