Continuing Madness of Centralized Economics

Member Group : Reflections

The holiday message from the D.C. politicians to millions of unemployed workers is that they’ll be kicked off the rolls for jobless benefits by Christmas. As they say, have yourself a merry little Christmas!

Holidays are tough enough for people who are struggling in situations that don’t exactly match up with Norman Rockwell’s picture perfect image of the idealized family sitting around the perfect dining room table looking appreciatively at the all-time perfect Christmas turkey (I always thought that Norman Rockwell, as talented and nice as he was, was inadvertently responsible for more suicides than Jim Jones. Who can live up?), without the politicians adding to the holiday blues by letting long-term jobless benefits lapse during what is a deep and continuing economic downturn that is already the longest recession since the Great Depression of the 1930s.

Nationally, with the Bureau of Labor Statistics reporting that there are 500 unemployed workers for every 100 job openings, the Labor Department estimates that just short of 2 million jobless workers will lose their unemployment benefits by Christmas.

The maddening thing in all this is that it is the politicians of both parties who have directly created this recession, the joblessness, and the nation’s debt and deficits with their anti-growth, anti-business, big-spending, big-government agenda of ever-expanding levels of taxation, litigation, mandates, regulation, fraud and waste.

And now, instead of post-haste enacting a pro-growth, pro-business agenda that could cut unemployment, instead of cutting their own excessive paychecks and benefits, instead of reducing their swollen numbers in the legislatures and downsizing the unwarranted size of their staffs, this same political establishment that played a key role in creating this recession and the record-breaking levels of red ink is now telling the nation’s long-term jobless worker to move into his mother’s basements or take a high dive off a nearby bridge.

This isn’t the way for new members of Congress to keep the voters they just won over to their side after Obama’s first two years of flops and mismanagement.

The first and immediate step for the Washington politicians of all stripes should be to clear away the anti-growth, anti-jobs mess that they’ve created, rather than furthering weakening the victims of their inept policies.

In other federal news, President Obama proposed a two-year freeze on federal pay, except in the military. That might sound good, except for the fact that the average wage of federal civilian workers last year was $81,258, according to the U.S. Bureau of Economic Analysis, or over $30,000 higher than the average private-sector wage last year of $50,462.

Include benefits and pensions and the gap between average compensation in the federal and private sectors jumps to $62,000, i.e., $123,049 versus $61,051, respectively, in the federal and private sectors.

Additionally, on top of government jobs being more secure and generally less arduous, the gap between government and private pays is increasingly growing, with the number of federal salaries above $150,000, for instance, doubling between late 2007 and mid-2009 while the private sector was simultaneously cutting jobs, reducing benefits and freezing paychecks.

Obama’s proposed freeze, in short, simply preserves the waste and inequities.

More locally here in Pittsburgh, the unionized teachers in the suburb of Bethel Park are back at school by government decree and no longer wearing the AFT blue T-shirts that became a standard part of their picketing attire for the past five weeks. I didn’t see one of those union T-shirts that included the oft-quoted statement from Albert Shanker, President of the American Federation of Teachers (AFT) from 1974 to 1997: "When school children start paying union dues, that’s when I’ll start representing the interests of school children."

Shanker got it wrong, completely. The kids, via their parents, pick up the entire tab for the teachers’ salaries, the teachers’ dues, the millions for the building where the teachers work, plus the tab for all the heat, light and chalk in the building.

Ralph R. Reiland is an associate professor of economics at Robert Morris University in Pittsburgh.
Ralph R. Reiland
Phone: 412-527-2199
E-mail: [email protected]