The Paralysis of the State..an excellent column in the NYT
Discussion
This article is specifically about the US, but in my mind it can apply to numerous Western countries, including Canada, where I live currently, and may have some relevance to the UK:
OP-ED COLUMNIST
The Paralysis of the State
By DAVID BROOKS
Published: October 12, 2010
Sometimes a local issue perfectly illuminates a larger national problem. Such is the case with the opposition of the New Jersey governor, Chris Christie, to construction of a new tunnel between his state and New York.
Christie argues that a state that is currently facing multibillion-dollar annual deficits cannot afford a huge new spending project that is already looking to be $5 billion overbudget. His critics argue that this tunnel is exactly the sort of infrastructure project that New Jersey needs if it’s to prosper in the decades ahead.
Both sides are right. But what nobody seems to be asking is: Why are important projects now unaffordable? Decades ago, when the federal and state governments were much smaller, they had the means to undertake gigantic new projects, like the Interstate Highway System and the space program. But now, when governments are bigger, they don’t.
The answer is what Jonathan Rauch of the National Journal once called demosclerosis. Over the past few decades, governments have become entwined in a series of arrangements that drain money from productive uses and direct it toward unproductive ones.
New Jersey can’t afford to build its tunnel, but benefits packages for the state’s employees are 41 percent more expensive than those offered by the average Fortune 500 company. These benefits costs are rising by 16 percent a year.
New York City has to strain to finance its schools but must support 10,000 former cops who have retired before age 50.
California can’t afford new water projects, but state cops often receive 90 percent of their salaries when they retire at 50. The average corrections officer there makes $70,000 a year in base salary and $100,000 with overtime (California spends more on its prison system than on its schools).
States across the nation will be paralyzed for the rest of our lives because they face unfunded pension obligations that, if counted accurately, amount to $2 trillion — or $87,000 per plan participant.
All in all, governments can’t promote future prosperity because they are strangling on their own self-indulgence.
Daniel DiSalvo, a political scientist at the City College of New York, has a superb survey of the problem in the new issue of National Affairs. DiSalvo notes that nationally, state and local workers earn on average $14 more per hour in wages and benefits than their private sector counterparts. A city like Buffalo has as many public workers as it did in 1950, even though it has lost half its population.
These arrangements grew gradually. Through much of the 20th century, staunch liberals like Franklin Roosevelt opposed public sector unions. George Meany of the A.F.L.-C.I.O. argued that it is “impossible to bargain collectively with government.”
Private sector managers have to compete in the marketplace, so they have an incentive to push back against union requests. Ideally, some balance is found between the needs of workers and companies. Government managers possess a monopoly on their services and have little incentive to resist union demands. It would only make them unpopular.
In addition, public sector unions can use political power to increase demand for their product. DiSalvo notes that between 1989 ad 2004, the American Federation of State, County and Municipal Employees was the biggest spender in American politics, giving $40 million to federal candidates. The largest impact is on low-turnout local elections. The California prison guard union recently sent a signal by spending $200,000 to defeat a state assemblyman who had tried to reduce costs.
In states across the country, elected leaders raise state employee salaries in the fat years and then are careful to placate the unions by raising future pension benefits in the lean ones. Even if cost-conscious leaders are elected, they find their hands tied by pension commitments and employee contracts.
The end result is sclerotic government. Many of us would be happy to live with a bigger version of 1950s government: one that ran surpluses and was dexterous enough to tackle long-term problems as they arose. But we don’t have that government. We have an immobile government that is desperately overcommitted in all the wrong ways.
This situation, if you’ll forgive me for saying so, has been the Democratic Party’s epic failure. The party believes in the positive uses of government. But if you want the country to share that belief, you have to provide a government that is nimble, tough-minded and effective. That means occasionally standing up to the excessive demands of public employee unions. Instead of standing up to those demands, the party has become captured by the unions. Liberal activism has become paralyzed by its own special interests.
The antigovernment-types perpetually cry less, less, less. The loudest liberals cry more, more, more. Someday there will be a political movement that is willing to make choices, that is willing to say “this but not that.”
Someday.
OP-ED COLUMNIST
The Paralysis of the State
By DAVID BROOKS
Published: October 12, 2010
Sometimes a local issue perfectly illuminates a larger national problem. Such is the case with the opposition of the New Jersey governor, Chris Christie, to construction of a new tunnel between his state and New York.
Christie argues that a state that is currently facing multibillion-dollar annual deficits cannot afford a huge new spending project that is already looking to be $5 billion overbudget. His critics argue that this tunnel is exactly the sort of infrastructure project that New Jersey needs if it’s to prosper in the decades ahead.
Both sides are right. But what nobody seems to be asking is: Why are important projects now unaffordable? Decades ago, when the federal and state governments were much smaller, they had the means to undertake gigantic new projects, like the Interstate Highway System and the space program. But now, when governments are bigger, they don’t.
The answer is what Jonathan Rauch of the National Journal once called demosclerosis. Over the past few decades, governments have become entwined in a series of arrangements that drain money from productive uses and direct it toward unproductive ones.
New Jersey can’t afford to build its tunnel, but benefits packages for the state’s employees are 41 percent more expensive than those offered by the average Fortune 500 company. These benefits costs are rising by 16 percent a year.
New York City has to strain to finance its schools but must support 10,000 former cops who have retired before age 50.
California can’t afford new water projects, but state cops often receive 90 percent of their salaries when they retire at 50. The average corrections officer there makes $70,000 a year in base salary and $100,000 with overtime (California spends more on its prison system than on its schools).
States across the nation will be paralyzed for the rest of our lives because they face unfunded pension obligations that, if counted accurately, amount to $2 trillion — or $87,000 per plan participant.
All in all, governments can’t promote future prosperity because they are strangling on their own self-indulgence.
Daniel DiSalvo, a political scientist at the City College of New York, has a superb survey of the problem in the new issue of National Affairs. DiSalvo notes that nationally, state and local workers earn on average $14 more per hour in wages and benefits than their private sector counterparts. A city like Buffalo has as many public workers as it did in 1950, even though it has lost half its population.
These arrangements grew gradually. Through much of the 20th century, staunch liberals like Franklin Roosevelt opposed public sector unions. George Meany of the A.F.L.-C.I.O. argued that it is “impossible to bargain collectively with government.”
Private sector managers have to compete in the marketplace, so they have an incentive to push back against union requests. Ideally, some balance is found between the needs of workers and companies. Government managers possess a monopoly on their services and have little incentive to resist union demands. It would only make them unpopular.
In addition, public sector unions can use political power to increase demand for their product. DiSalvo notes that between 1989 ad 2004, the American Federation of State, County and Municipal Employees was the biggest spender in American politics, giving $40 million to federal candidates. The largest impact is on low-turnout local elections. The California prison guard union recently sent a signal by spending $200,000 to defeat a state assemblyman who had tried to reduce costs.
In states across the country, elected leaders raise state employee salaries in the fat years and then are careful to placate the unions by raising future pension benefits in the lean ones. Even if cost-conscious leaders are elected, they find their hands tied by pension commitments and employee contracts.
The end result is sclerotic government. Many of us would be happy to live with a bigger version of 1950s government: one that ran surpluses and was dexterous enough to tackle long-term problems as they arose. But we don’t have that government. We have an immobile government that is desperately overcommitted in all the wrong ways.
This situation, if you’ll forgive me for saying so, has been the Democratic Party’s epic failure. The party believes in the positive uses of government. But if you want the country to share that belief, you have to provide a government that is nimble, tough-minded and effective. That means occasionally standing up to the excessive demands of public employee unions. Instead of standing up to those demands, the party has become captured by the unions. Liberal activism has become paralyzed by its own special interests.
The antigovernment-types perpetually cry less, less, less. The loudest liberals cry more, more, more. Someday there will be a political movement that is willing to make choices, that is willing to say “this but not that.”
Someday.
RDMcG said:
Christie argues that a state that is currently facing multibillion-dollar annual deficits cannot afford a huge new spending project that is already looking to be $5 billion overbudget. His critics argue that this tunnel is exactly the sort of infrastructure project that New Jersey needs if it’s to prosper in the decades ahead.
Essentially, the same issues are plaguing many areas in the UK. London is prosperous, but the country seems unable or unwilling to invest in the infrastructure which might help to spread this wealth and trigger new investment.Birmingham is, effectively, throttled by the combination of it's own traffic and that of the passing M6 and M5 motorways. Inward investment over the last 20 years in the are has been dire. What once had a 'critical mass' for engineering business, has now lost that edge - the economies of scale are no longer there, or are outweighed by the transport and social issues.
I give Brum as an example, purely because of my local knowledge and experience, but I am sure there are many other areas facing similar issues.
RDMcG said:
This article said said:
Over the past few decades, governments have become entwined in a series of arrangements that drain money from productive uses and direct it toward unproductive ones.
All in all, governments can’t promote future prosperity because they are strangling on their own self-indulgence.
All in all, governments can’t promote future prosperity because they are strangling on their own self-indulgence.
sussexjob said:
Great article, you can compare this with UK but you also need to factor in Brussels and 'elf an safety.
So much boolocks is spouted about health and safety, like them "banning" events, when usually it's the insurers raising premiums and the organisers not wanting to pay.There is a difference between the "good" old days of massive public works, and not just the costs. There was a difference of opinion on the value of lives - just look at the effort and costs put into rescuing 33 mine workers in Chile, compared to the 154 deaths that happened in the 4 years of construction for the Hoover Dam.
aclivity said:
So much boolocks is spouted about health and safety, like them "banning" events, when usually it's the insurers raising premiums and the organisers not wanting to pay.
Indeed, but the insurance premiums have gone up because people are so open to claiming these days. In the old days you took responsibility for your actions - if you tripped over an uneven pavement you made a note to look more carefully at where you were walking in future. These days, you call 'claims direct' and ask how much you can get!!
Sidicks
Digga said:
RDMcG said:
Christie argues that a state that is currently facing multibillion-dollar annual deficits cannot afford a huge new spending project that is already looking to be $5 billion overbudget. His critics argue that this tunnel is exactly the sort of infrastructure project that New Jersey needs if it’s to prosper in the decades ahead.
Essentially, the same issues are plaguing many areas in the UK. London is prosperous, but the country seems unable or unwilling to invest in the infrastructure which might help to spread this wealth and trigger new investment.For example (yes, I know there was private finance too but similar considerations apply) the Channel Tunnel went bust at least once during construction but nobody really minds because we still ended up with a very useful tunnel.
sidicks said:
In the old days you took responsibility for your actions - if you tripped over an uneven pavement you made a note to look more carefully at where you were walking in future.
You mean like the mill workers who lost hands and fingers in the machines? Or maybe miners who dies in pit collapses? Or the 100 or so workers who died during construction of one tunnel on the Great Western Railway? Or the 100 or so workers who dies during construction of the Hoover Dam? Or the asbestos workers still dying from mesothelioma?So much for your good old days. I've got £5 says you're sitting in a nice warm office somewhere...
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