Unemployed? Blame Public Employees

I have a hypothesis about the “New Normal” economy we face. Most, if not all, of the unemployment crisis can be blamed on Public Employees. A bold statement to some…. but on paper it looks suspiciously valid.

Essentially, upper and middle taxpayers have always paid the tab for government. But historically we have paid civil servants less money. And the amount they are now overpaid is very near how much our unemployed have lost in wages.

Public employees are stealing from the poor and lower classes. Republicans need to make this message clear as day. Why they don’t astounds me. Is Chris Christie the only politician with elephant balls? You too, Paul Ryan, stop screaming you are being picked on, and stand for something IMMEDIATE with teeth. Win my plan, and then we can win yours.

If we commit immediately to significant productivity gains in the Federal, State, and Local Government, we could have ZERO UNEMPLOYMENT. With the easily achieved gains ($369,462,330,189) I describe here routinely, we could pay each of the 15 MILLION unemployed $24,600 per year to go out in their backyards, dig holes, and fill them up. Do the math.

These, of course, would just be Obamajobs. So imagine how much more could be achieved if, instead, we put the savings to good use — say cutting corporate taxes to zero, further reducing prices, and allowing consumers to have more to spend elsewhere – creating real jobs, the right way.

But that’s not specific enough proof, instead let’s look the real lost wages of the unemployed and see how close that amount is to what we overpay for government . To do this, I pulled data from the Center for Labor Studies. First, I sorted the number of jobless in each decile of 15M unemployed, and then established how many hires would be needed to achieve Full Employment (4%) in every single decile. Then I multiplied each group by their median lost wages.


Overpaid: $369 BILLION. Lost Wages: $306 BILLION.

Holy Shit, huh? Turns out this stuff isn’t complicated. Pay public employees too much money, and you don’t have enough cash left over to run the economy at full capacity.

And guess what? When we have Full Employment, we won’t need $800B in stimulus either. Say it with me… Obamajobs are not real jobs.

The deeper explanation that our economy is the fault of Public Employees goes like this:

1. Reagan (bless his soul) made one giant unforced error. Starting in 1980, he allowed public employees to start earning more than private sector employees. If only he’d fought the communists here like he fought the Ruskies (sigh, one can only dream).

Historical Compensation Levels

2. Starting in the early 90’s,the Internet and technology brought massive productivity gains to private enterprise that resulted in jaw-dropping cool stuff and dramatically lower prices…. so even though wages stayed the same for some, the lifestyle improvement of all people over the last 20 years has been outstanding. A $50 broadband connection and a $400 computer basically silences any complaint that someone doesn’t have the tools they need to succeed.

3. Government has not made these productivity gains, and on top of it, their wages have increased.

If however, we got started in the late 90’s, when it became obvious to anyone with three functioning brain cells that computers could replace humans and lower costs, we wouldn’t have seen a short-term crash in the technology markets. By 2000, we could have cut $200B from public compensation. Taxpayers could have kept $150B of that and spent $50B with technology and service companies as government jobs were automated, outsourced, and privatized. Same services, lower costs. Not less government. More productive government.

Now watch this: If GOV2.0 happened back then, there was no tech crash, and Greenspan wouldn’t have destroyed his place in history by creating an easy money housing bubble–which has now roped tens of millions of suckers into making huge mortgage payments on “investments” they will never get back.

It is a pretty compelling alternative universe.

And this story shows exactly what Republicans must place at Bush’s feet: No matter what else positive happened during his eight years, he was a Harvard MBA in the middle a giant era of modernization. And his not fighting tooth and nail against the explosion of public employee compensation was unconscionable – look what it has brought us to!

On the bright side, even in 2011 when we finally make these cuts, when $100B in new revenue is annually floating to technology and service companies instead of $400B being stolen by Public Employees, we won’t worry about what kind of future jobs we need to create – we have a logically valid way to create the new jobs now.