The most pervasive myth of the welfare state is the altruism of the public sector. In this mythology, the private sector is run by a bunch of greedy businessmen who get rich by making money off people's misery. While the public sector is run by altruists who want nothing except to help those left behind by the private sector. Capitalists meet the Anti-Capitalists.
For the private sector to succeed, it needs a prosperous customer base. The public sector doesn't. It just needs a collective 'Them' to pay the bills. The public sector makes its money from failure. Human suffering creates more demand for its services. The more people are out of work, can't pay their bills and need help-- the more the public sector grows.
The PayDay loan industry and Fannie Mae both preyed on minorities and the poor. But the latter's business model was completely unsustainable and its greed was completely irresponsible. Yet all this was concealed under the veneer of altruism.
The public sector altruism myth is just that, a myth. It's a destructive myth because of the basic conflict between its inner and outer goals.
The outer goal of a car company might be to sell more cars. Its inner goal is to sell enough cars that it can hire more workers and its executives can go to the Bahamas next month. There's no major conflict between these two goals. Not unless everyone there decides to make bad cars and misrepresent them, and then use the money to expand the assembly line and go to the Bahamas anyway. There are businesses that work that way, but they don't have much of a future. Sell people bad cars and you'll lose customers. And then the only way you can stay in business is if the public sector begins subsidizing your company. A bad company is either a rolling scam that depends on luring in gullible new customers or a public sector charity case.
The outer goal of a welfare program might be to help its clients. But its inner goal is to get more funding so as to add jobs and so whoever is at the top can go to the Bahamas next month for a conference on global poverty. If a client stops needing its services, then the program loses funding. The welfare state needs more 'clients' signing up for more services so that they can get more funding. The best clients are the neediest. A client who is upwardly mobile is a bad risk, because losing their name on the rolls means a net loss for the program which endangers its funding. People in a state of failure make the best clients. Welfare programs maintain outer goals of helping their clients be more independent, these conflict with their inner goals, which is to maintain their client lists.
The myth of public sector altruism rarely takes stock of the conflict between inner and outer goals. Even when teachers' and nurses' unions hold angry protests over benefits during an economic depression, this conflict rarely gets addressed. The myth that they are public servants who want nothing more than what's best for their charges lives on. But like everyone else they are human beings. Their interests are their own. Some are idealistic enough to make sacrifices or to want what is best for the people under their care, even when it's to their own detriment. But this is not the case for the majority in any field. Moments of heroism aside.
The public sector's inner goal is to bring in more funding and create more jobs. Not out of any altruistic impulse, but because it expands the power and wealth of its own administrators and bosses, whether in an agency or a union. A bigger agency has more sway in funding battles. Its incestuous relationships with unions and clients means that it is better positioned to demand more money and hold off any cuts. The agencies and unions boast their own private armies which bring in money. The money is given by politicians in exchange for support and used as currency to expand the ranks of that army. The army is there to support the politicians during elections. And to combat any attempts to cut the money coming into its coffers.
The Public Sector has become an army of occupation. The battles in Wisconsin, the crisis in California and the ObamaCare clashes with SEIU goons are a wake up call to what that army really is. It's not armed, but it doesn't need to be. It's the vanguard of an alternative economy that depends on extracting as much public money as possible. And that alternative economy is in a basic conflict with the people paying for it. When the economy is good, the army can skim off the cream without anyone noticing. But in a bad economy, a conflict explodes over limited resources.
The Postal Service doesn't exist to deliver mail. 80 percent of its budget goes to the salaries and benefits of its 500,000+ union members. It is a union employment plan subsidized by the public through a stream of pension and benefits bailouts. Its business model is based on delivering junk mail. Not on providing useful public services. The Postal Service does not exist so you can buy stamps and mail letters. It exists so some of the country's largest unions can retire at 55.
Public schools don't exist to teach kids, they exist to create jobs for teacher's unions, positions for administrators, contractors for school construction programs, and a thousand ways to get federal, state and local funding. That's why we spend more money on education than most of the world, with less to show for it. The spending is not pupil driven. The children are mostly irrelevant except as mannequins for new educational gimmicks.
Keeping students below average turns them into a 'profit center' for new solutions. If we actually had a successful education system, a huge chunk of the consultants and other feeder fish would be out of business. The educational bureaucracy does not profit from teaching kids. It profits from kids who are not learning. Who need special education, more programs and a crisis mode of new approaches. "Are our kids learning?" No?" "That's because we aren't spending enough money." "Why do we pay our schoolteachers less than NBA players?" "Why does the military get more money than the educational bureaucracy?"
It's all the same down the line. Hospitals don't add nurses to treat patients. They add nurses because union regulations require them to. Mortgages are approved that can't be paid off, because that way the agency can boast how many new minority home buyers it has created. And when foreclosure comes, then another agency takes over providing for them. Job training is given for jobs that don't exist. Then job creation programs for those jobs are funded-- and still the jobs don't exist. And then the cycle begins all over again. Nothing in this cynical trillion dollar farce has anything to do with helping people. If any people get helped, it's an unintentional side effect of a system that exists to feed on human misery..
The public sector thrives on anxiety. It feeds on failure. The public sector is in freefall, but the private sector is adding jobs like crazy.
The crazy quilt marriage of political machines, radical unions and liberal sociologists has created an unstoppable monster intent on devouring everything. Some inside the beast understand that this is the goal. They want private enterprise to vanish and the state to be the provider of all services. Most however don't realize this. They have just been taught to protect their privileges.
The public sector is ruthlessly competitive in its own way. Not on merit, but on position. Maintaining your position in the system is crucial. Doing your job well is absolutely meaningless. In some cases it's even dangerous. Staying in line is what counts. Having the right background and the right opinions. Inertia through seniority is the biggest signifier of success. And inter-departmental and inter-agency rivalries are routine. It's a Darwinian economic ecosystem and everyone is trying to grab funding for your programs. Exploiting a crisis, knowing the right political buzzwords and being able to summon a mob of clients or union members to agitate for your program are the keys to success.
Such a system does not encourage the long view. Nothing exists except your program, your crisis and your department. The ability to recite "Without funding for ____________ we all are doomed" on cue is the only thing that matters. Your real assets are your benefits. To protect them, you have to protect your programs. And lash out at anything that threatens funding for them, whether it's charter schools or the taxpayers running out of money. Reform is dangerous. Protect the status quo at all costs. Violent tunnel vision is the only kind the system breeds. The few visionaries are left wing radicals who think that everything would work if only they had complete control of the economy. And to make that happen, they have to destroy the conventional economy first.
Here's where we are now. Trapped funding the ever-expanding fiefdoms of the public sector, its office warrens, its ghettos and housing projects, its consultations and studies and research projects, its tidal flood of gimmicks and appropriations.
All the money being spent vanishes into the recesses of those fiefdoms. It doesn't remotely provide value per dollar spent, because most of that dollar doesn't go to providing services. It goes to the vast infrastructure of employees, office buildings, consultants and overseers of the entire mess. The services are a side project of a vast bureaucracy which is concerned with its own power and prestige.
The welfare state can't solve any of the problems that those liberal sociologists thought it could. But the political machines who authorized the spending never wanted the problems solved. It wanted them perpetuated. It wanted plantation voters with no hopes or dreams beyond the next state lottery ticket, who would vote for them to protect their benefits. And that's what they got. The unions can't see beyond their next paycheck. And don't want to. The money has to keep coming because it's theirs. The details don't matter. They often despise the members of the public they interact with. And why shouldn't they. Most of the people they interact with don't want to be where they are. It's a mutually hostile relationship. And that mutually hostile relationship is the paradigm for the larger one they have with the taxpayer.
As the economy declines and the public sector grows, an inevitable showdown is coming. A public sector that grows faster than the private sector is unsustainable. But that just means the public sector will start tossing their clients overboard faster. Classroom sizes will double along with education spending. Welfare rolls will be cut, and more workers will be hired to oversee them. Doctors will get paid less and patients will wait longer to see doctors, but there will be more nurses hired on. Death panels will come disguised in patient friendly language. There will be less of everything, but more public sector employees for all of it.
These measures will make the system seem more sustainable. But all they will really do is maintain the position of socialism's occupying army. And as the public sector begins cannibalizing the people it claims to be serving, we will have a choice between continuing down the same disastrous road as Europe or taking a stand to reclaim the economy from the public sector.
No one seems willing to bite the bullets necessary to save the economy either.ReplyDelete
I hope this showdown will come, and will be bloody as hell.ReplyDelete
For years, I've seen with my own eyes how the public sector, in Israel and other places, is actually the enemy of the public.
And its self-serving army deserves to be taken down a few thousand notches - with utmost prejudice.
"Not unless everyone there decides to make bad cars and misrepresent them, and then use the money to expand the assembly line and go to the Bahamas anyway. There are businesses that work that way... a rolling scam that depends on luring in gullible new customers..."
You just happened to describe almost every Israeli business in the world.
You comprehensively laid it all out in a way I have never seen anyone else do. I have a friend who works for the City of Boston. 15 years ago I told him that Boston's government exists #1 for its employees and for them to be paid well. He is a good sport so he was willing to laughingly agree. Every few years I ask the same question, I get the same answer.ReplyDelete
For the foreseeable future the economic pie is shrinking. So every dollar the non-productive public sector parasites extract via taxes, means fewer dollars for the productive sectors AKA the private sector. Same applies to affirmative action. When the US economy was decent you had other good job possibilities if you were denied one due to affirmative action. But with today's shrinking economic pie, a qualified white guy who loses out to an unqualified AA black, woman, or hispanic is on the oblivion express.ReplyDelete
Put bluntly, Obama has greatly increased Federal employment (for his people) at the expense of private employment. Under O-care, the health care sector will have more public employees and fewer private employees. Private sector employs more whites, public sector employs more minorities in fact they are often over-represented, past affirmative action guidelines. Because they try to hire only their own (especially in state university systems) which is what they accuse whites of doing. Hiring only their own means, gays, lesbians, blacks, women. So far not too many Hispanics on the taxpayer funded gravy trains. You would be shocked at how many gays and lesbians are Federal employees especially in the DC area. I'll bet they dominate the State Department.
@Joe-k7 I would include Muslims in the state department mix as well.ReplyDelete
"The public sector altruism myth is just that, a myth."
Do you mean Anthony Weiner doesn't really want to save us money by dismissing a taxpayer funded investigation that would reveal his twitter account WASN'T hacked.
All kidding aside, this is by far one of the most important articles I think you've written since I started reading your blog. I stick by the second comment I wrote yesterday. A lot of people need to read this.
Brilliant article once again:)ReplyDelete
There has to be a balance between the Socialist public sector "altruism," and its policies have only resulted in misery for the poor, and the rage among the Tea Party's rage against the poor as leeches.
Neither demonstrated genuine altruism or compassion, or common sense.
Great post as usual but I must disagree on one point. Outside of the public sector, there are very few nurses that are organized. True, many hospitals and medical centers have unions, but nearly all of them are for their non-professional employees. State-employed nurses have all but disappeared since mental hospitals were closed, and most prison systems now contract out to private staffing agencies. Federal nurses for the most part won't join a union voluntarily.ReplyDelete
A little off topic but the medical industry has fought tooth and nail to prevent private sector nurses from organizing because the first thing nurses would do is demand more pay and better benefits.
One thing that is never mentioned in the health care debate is that outside of physicians and top management, most health care workers have horrible health care benefits, if at all.
Nurses have made more $$$ in recent years but that has been due to personnel shortages - there simply aren't enough warm bodies to go around. Economic downturns have made up for the some of the shortage in recent decades as displaced workers retrain, but when the downturn is over, the shortage returns.
Why? It's simple: for the amount of training, the amount of responsibility, and the amount of bs a nurse has to put up with, the pay just doesn't make things equal out.
lack of long term thinking is a major problemReplyDelete
LOL. I like Daniel's suggestions on comments! Funny stuff.ReplyDelete
I just wanted to say RN programs (the 4 year degree programs for nurses) used to be heavily impacted to such a degree that people w/4.0 GPA's out of high school were being turned down for Nursing schools (e.g. Cal State University, Long Beach's Nursing school).
I don't think it's lack of long term planning - But the liberal democratic state itself, which is incentivised against sustainability.ReplyDelete
The Pay Day loan industry has been demagogued as if Sarah Palin were behind it. In more than one study it has been shown to be a rational choice. Yes, the APR looks astronomical. It pales in comparison to the APR of late fees. Example: $50 for being late on $600 rent. That's 100% APR. The trashing of the industry is a well funded campaign by the established money changers to help "the poor (ignorant) little guy".ReplyDelete
"Propaganda all is phony" - Dylan
Bravo, Daniel! An essay in the spirit of Thomas Sowell, Walter Williams, and Fredric Bastiat!ReplyDelete
Roy, I wasn't exempting the rest of the financial services industry.ReplyDelete
Edward, thank you.
Finding this blog has been an amazing gift. Mr. Greenfield, you are an incisive thinker and a wonderful writer! While so many blogs recycle the same stories with the same points, you off thoughtful perspectives on a number of important issues that never cease to get me thinking. And appreciating the fact that you bothered to write it all down to share with others. This blog is a gift!ReplyDelete
Thank you, it's what I try to accomplish.ReplyDelete
We need to adopt Swiss style Direct democracy. Then if we move to socialism, it will be no one's fault but our own. In any case, Direct democracy offers the opportunity to turn back or go in another direction as referenda are available to the people on all issues, whenever they so desire.ReplyDelete
There is discussion on this subject, particularly in the UK/EU, where there is very serious democratic deficit and accountability. If this is not addressed shortly, it will lead to revolution and mayhem.
Revolutionary times - by Richard... Thursday, June 02, 2011
and more from the above links.
Anonymous is right about nurses and unions. I went through an orientation program upon getting my first nursing job after obtaining my RN license.ReplyDelete
The facility did have a union for nurses but we were discouraged from joining it. The rationale of the CEO? If they wanted to promote one nurse who was doing an exceptional job, the union (senority issues) would make that impossible.
Frankly, I thought that line of reasoning was bs. They just didn't want nurses unionizing.
Besides, these hospitals and nursing homes typically hire new grads for per diem work, rather than part or fulltime. I could go off on a tangent on the per diem hiring practices. There are MANY problems with that, not the least of which is that nurses hired per diem don't get much if anything at all in terms of job benefits. It saves the hospital money.
Another hiring practice is to hire nurses part-time--less benefits.
In any event, hospitals and clinics do want to cut corners by hiring more Nurse Practitioners and Physicians Assistants. Or as many call them, "physician expanders."
Cost cutting at the expense of patients.
I am no longer in nursing, doing something I enjoy a lot more but for less money.ReplyDelete
Some of my favorite, pertinent quotes:ReplyDelete
"The urge to save humanity is almost always a false front for the urge to rule." - H. L. Mencken
"Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It_ may be better to live under robber barons than under omnipotent moral busy-bodies. ... those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." -- C.S. Lewis.
Chesterton: "When people stop believing in God, they don't believe in nothing — they believe in anything."
In response to Anonymous's mention of the nurse shortage. I knew nurses in the 1980's when the aids coverup was first instigated. They bailed from the profession. The fact that an aids patient's right to privacy was more important than their personal safety was more than they could bear. The told stories of how blood splatters everywhere in an operation room, (often in their mouths and on their faces, etc.), the political pressure to bypass sound medical science added to the epidemic.ReplyDelete
Another gift from the government sponsored altruism. I can't help but wonder how much the immune deficiency epidemic we are currently in has to do with the fact that the handling of the AIDS patients became a political issue rather than a medical issue.
Excellent article. First time I have seen this site. Sounds as though author has read the works of Ayn Rand! BRAVO!ReplyDelete
Nice work. Every taxpayer should take the time to read it.ReplyDelete
Yes silentnomore, it's amazing, and now we have the HIPPA secret medical crap whereby finding out where your loved one is in the secret hospital system is a N I G H T M A R E of roadblocks and thoughts like " the #$%# state just STOLE" my loved one.ReplyDelete
So now the medical system can just refuse any information based upon the government tyranny laws, instead of based upon common sense and needs of patient and family.
It's already a secret Matrix - I shudder to think what obamacare will do to the health care sytem that is already working under fear and silence and shirking duty and information sharing.
I guess the next step is using a lawyer to subpeona the data so you know what they shot your loved one up with or did to them or where they were transferred to.
Yes, and the nurses and doctors tell me the AIDS lobby forced this down all our throats as well.
They also have all told me they hate obamacare already.