Tuesday, September 14, 2010

Whom Do You Trust?

Lately we have been hearing how awful government is. Not governments like Iran or North Korea, not Communists or military dictatorships, but our own government. I find this ironic, since I am now teaching a course about the 1960s, when people who criticized our government were told, “Love it or leave it.” Now the defenders of government are told they are un-American. It’s so confusing when political groups change their slogans into the opposite, and act like nothing has happened.

Those who want government to go away, or at least get a lot smaller, seem to have two ideas about how to shrink government: cut out the “waste” and let private companies take over many of its functions. Their assumption is that the private sector can do these jobs better and cheaper. Is that true?

Where is the waste in government spending? One place that many people focus on is how much government employees get paid and other perks of their jobs. Here in Illinois, the cost of the Governor’s mansion in Springfield has become a campaign issue, since that house is rarely used. The pensions that government employees earn are condemned, because paying them decades into the future might require even higher taxes.

Why would anyone believe that private companies would save us money on salaries? No government official, including the President, receives even the average salary of the bankers on Wall Street, the executives of the oil companies, or the directors of any of the large corporations who dominate our economy. The new CEO of GM will make $9 million. No big deal, because that is less than the average pay of CEO’s in the corporations in the S&P 500. Then there are the private jets, meetings at Caribbean resorts, company cars, and country club memberships that are standard fare for corporate leaders. Why are the salaries of government employees excessive, but not those of corporate employees? Would “big government” critics be satisfied when public services are in the hands of multimillionaires?

Okay, if government services were privatized, we would certainly pay top executives much more than we are paying now. How about lower level employees? As a nation, we could save millions, maybe billions, if we transformed well compensated fire fighters, police officers, teachers, and thousands of other government employees into private wage earners. The consequences are the minimum-wage fire fighter coming to put out a fire at your house; your children in the hands of minimum-wage teachers; the minimum-wage clerk in a government office responding to your problem. Public services would be delivered by Wal-Mart-style “associates”, not quite full-time employees with no benefits.

The savings would be enormous, because there are around 20 million government employees. Imagine the reduction in tax rates if we converted those all middle-class salaries with good health-care benefits to minimum-wage salaries with minimal benefits. Of course, the national economy would suffer, as housing, consumer goods, construction, and air travel would decline, because so many families with money to spend would be converted into low-income families just scraping by. Millions of jobs would be lost as our economy came to resemble a third-world nation, with a small number of wealthy people and a tiny middle class. But think of the tax benefits!

Here’s the clincher: there would be so much less corruption! All those worries about government dishonesty would be banished, as we turn over everything to the private sector, which has earned a reputation, especially recently, as paragons of economic virtue. It would be like replacing that corrupt, inefficient, and dishonorable waste of your tax dollars, the US Army, with the honest and capable work of Xe Services, formerly Blackwater Worldwide. BP could oversee oil exploration, Morgan Stanley would run the Federal Reserve, and the former executives of Enron, now thankfully available for public service, could create a national energy policy.

Although I can’t imagine that anything could go wrong with this plan, just in case, we could rely on Fox News to organize government communications and keep us well informed.

Steve Hochstadt

Jacksonville, IL

Published in the Jacksonville Journal-Courier, September 14, 2010

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