[Note: We highly respect the civil servants, including our postmasters! But there are very important points made in this article about the difference between private sector workers and public sector workers.]
Dear Reader,
Yesterday I wandered alone down to a local golf course for a quick round of golf. It's the sort of quaint, no-frills 9-hole course where you can still play a round on a weekday afternoon for $20. Its advantage over my regular haunt is that the entire course is built atop a plateau of sand and gravel, and so it dries quickly following rain - and rain is something we have had a lot of this year.
As is so often the case when golfing alone, I eventually bumped up against the group ahead of me - three duffers the youngest of whom, Mary, I would say was in her late seventies. The oldest, Pete, had to be pushing 90, with Ralph, Mary's husband, falling somewhere in between.
They offered to let me play through, as etiquette dictates when a solo player comes up behind a group, but as the morning was pleasant and there were additional groups up ahead so my progress was destined to be retarded no matter, I asked if I could just play along with them.
Those of you who play the blessed game will know immediately what I mean when I say that the older you get, the straighter you tend to hit the ball - though your distances suffer. And so it was that I, still in the (relative) vigor of youth, mashed my ball a couple hundred yards, then settled in for a casual walk as my companions made determined progress in 40-yard increments toward the next flag.
In addition to being generally enjoyable, the experience was also inspirational. That's because even though my companions were all heavily weighed down by the rigors of time, they still managed to fight the good fight in the quest for a decent score. Particularly old Pete, who had to wrestle with a serious palsy as he endeavored to drop his ball on the tee - a task he persevered with in every instance.
Proving necessity as the mother of invention, Pete had installed a suction cup on the handle of his putter, which he put to good use in retrieving his ball from the cup without having to stoop over. Funnily, it soon became obvious that his two companions were accustomed to leaving their balls in the cup until after putting in, so that Pete could fish them out as well. By the last hole, I too was participating in the ritual, patiently waiting my turn until Pete graced me with my ball.
As is also customary over the course of a round of golf with strangers, before long we started chatting about this and that, and getting to know each other's background a bit. When I told them that I was a writer with a skew toward financial and investment topics, Ralph shook his head and asked, rhetorically, "Have you seen CD rates? We can't earn any money."
"Are you living off your savings?" I inquired.
"Eh?" he asked, bending an ear in my direction.
"ARE YOU LIVING OFF YOUR SAVINGS?" I asked again a little louder.
"Oh, yes, I was always self-employed. As an industrial carpenter, replacing windows and other fixtures in factories, hospitals, that sort of thing," Ralph answered proudly. "But it's not easy to live off savings when you can't make any money on your money," he added with a stoic sigh before distractedly slicing his next shot off the toe of his 5 iron into a patch of rough.
By contrast, despite the visible hand of advanced age having twisted Pete into a posture akin to Hugo's Quasimodo, Pete had a noticeably carefree attitude about him.
"And what did you do in your working career?" I asked, sticking my nose in his business as we Americans are unhesitant in doing.
"Oh, I was the postmaster hereabouts. But I retired twenty or so years ago."
"And so you live on a pension?"
"Sure do," he answered with a glint in his eye, before puttering off to the next tee in his personal golf cart.
And so, I reflected after the round was over, the difference in the lives between one old duffer and his wife, now clearly being squeezed by a deliberate government policy to keep interest rates low in order to bail out the banks, and the other, Pete, who has no such concerns, granted as he was a steady income from his government pension, helpfully adjusted for inflation.
The sharp difference in their circumstances was notable. In the one case, the carpenter is at the mercy of a corrupt government. A government that manipulates interest rates, even though they know the hurt that will cause savers and those who rely on savings. A government that also promulgates inflation, adding to the steady erosion in the quality of life of those savers and anyone forced to live on a fixed income.
How is it that one class of citizens, the bureaucrats, have arranged things to insulate themselves from the ill consequences of their own actions?
The answer, simply, is "because they can."
For Pete, providing for his comfortable inflation-adjusted retirement required nothing more than time served and a bit of paperwork done by a bureaucrat before them, paperwork that says for all to read that, upon retirement, the state will provide certain benefits to its workers until the end of their road is reached and then continue still further for any surviving spouses.
By contrast, a self-employed businessperson has to pay close attention to the outgoing vs. the incoming to ensure that, over time, they'll have something left to tide them over in their fallow years. The pensioned bureaucrat need not make any such calculations, and so has no such concerns.
Of course, many companies in these United States, and elsewhere, used to offer pension plans as well. But long ago, the vast majority of those plans were scrapped out of economic necessity, much of it tied to the uncertainty of operating in a changeable regulatory environment. It was one thing when a company's obligations to its long-term workers were obvious. It became another thing altogether when the government began layering on added levies for various safety net programs and insurances. At some point in the past, the added expense of these costly worker-related mandates made it necessary for the companies to make adjustments in the benefits offered, in order to afford those mandates and stay in business.
Now, don't get me wrong. Pete was a very agreeable individual, and I'd be happy to play golf with him again any time. His decision to pursue a career in "public service" is as benign as Ralph and Mary's decision to start a carpentry business. In Pete's case, however, it is safe to assume that the attractive, life-long benefits package played a part in his career deliberations.
Just like it did for a guy I used to know who worked for CALTRANS, cleaning the debris off the side of California freeways. He used to tell anyone who would listen how he was taking, or had just taken, some civil service test or another to improve his pay grade with the clear goal in mind of boosting same to the max before retiring at 50 years old with 70% of his final salary guaranteed for life. While I haven't seen Lenny in many years, I suspect he was as good as his word, and today is probably enjoying a game of golf, just as unconcerned as Pete.
Is there a point to these musings?
Nothing overly profound, I fear. But I do think it is worth reflecting on a set-up where one class of people, the bureaucrats, are...
- Required to produce nothing that has to stand on its own in free markets,
- Given license to make laws and regulations that benefit themselves at the expense of others,
- Further given the power of coercion to enforce such laws and regulations, even to the point of throwing non-compliant individuals into jail.
The net result of such a set-up is two distinct classes of citizens, one of which could be loosely described as the Master Class, and the other the Slave Class.
Unfortunately for the bureaucrats, in the sort of crisis we are in today - a crisis directly linked to the unfettered growth in government - they will not be able to avoid sharing in the pain. Their very excesses will lead, and are leading, to a backlash that will result in cutbacks. In Minnesota, the state government has just shut down in a dispute over a $5 billion budget deficit. The bureaucrats hope that by closing down services, they will be able to squeeze the citizenry into ponying up more taxes to keep the master class living in the manner they have become accustomed to - and they'll probably succeed, this time around.
On a larger stage, the U.S. federal government is likewise locked in a debate over raising the debt ceiling, yet again. And, yet again, a compromise will be reached whereby the bureaucrats can maintain their status at the expense of the tax slaves and their unborn progeny.
Now, I wish I could say that in time, Americans will come to the conclusion that the country can do with a lot less bureaucracy - as in a 50% or better reduction - but if history is any guide, that's just not in the cards. For one thing, bureaucrats are remarkably adept at developing entrenched constituencies. Shut down the parks? Heavens forbid, say the sportsmen, casual users and environmentalists. Stop issuing food stamps? What about the starving children, ask the recipients. Close the Department of Motor Vehicles, but how will we renew our licenses? Stop inspecting the food we eat? Can E. coli be far behind? Stop fixing the potholes? And who is going to pay for the damage to my car?
And so while their ranks may not shrink, other than perhaps by attrition that leaves those who have reached tenure secure in their position and their benefits, the bureaucrats are far from out of the woods. For one thing, they will find that the inflation emanating from their unchecked excesses, and the need to try and hide that inflation from the slave class by jiggering the reported indexes, will erode their own salaries, pensions and cost-of-living adjustments. And unlike the entrepreneurs who will be able to use their ingenuity to adapt to the inflation - perhaps even by diversifying internationally - the bureaucrats are cemented into place by the very same contracts that were designed to protect them.
Of course, the powers-that-be won't go down without doing their best to maintain their status, which means turning to the tried and true approach of vilifying the entrepreneur - with the level of vilification rising in direct proportion to success.
Case in point, after a stint at trying to appear business friendly, President Obama and his flunkies are once again pointing fingers at the greedy capitalists that seek advantage by drawing the very lifeblood of the proletariat.
Quoting Federal Reserve Guv Sarah Raskin...
Federal Reserve Governor Sarah Bloom Raskin said the financial inequality resulting from stagnating incomes for most Americans and rapid growth in wealth for the richest 1 percent is hindering the U.S. economic recovery.
"This inequality is destabilizing and undermines the ability of the economy to grow sustainably and efficiently," Raskin said today to a forum in Washington sponsored by the New America Foundation. The disparities help "drag down maximum economic growth and are anathema to the social progress that is part and parcel of such growth," she said.
And now we know the root cause of today's economic ills - it all boils down to income inequality. Which, of course, is actually just a thinly coded way of saying, "We need more taxes, and people with money are the only remaining target."
In a speech earlier this week, the president also pulled on the leather gloves, mentioning "corporate jet owners" six times as part of a pitch to close a tax loophole that is seen as helping to provide yet more slop to those capitalist pigs. Unfortunately, as our own Jeff Clark points out...
Not only did he appear embarrassingly un-presidential, but the tax "loophole" he wants to close (accelerated depreciation) will affect all equipment manufacturers, thereby decreasing sales and tax receipts, and increasing unemployment.
Amazon and Overstock.com both just announced they're leaving California due to Gov. Brown's new law, which requires them to collect sales tax on CA customers. The CA consumer can still order products, but they'll come from out-of-state affiliates, so tax revenue will actually decrease and unemployment increase in CA.
In the end, both the postman and the carpenter are going to be affected by the collapse of the U.S. monetary system. While the postman will do everything he can to keep his head above water, including standing on the head of the carpenter, in the final analysis everyone who fails to adapt to what's coming is going to find themselves treading water.
And when it comes time to adapt, the carpenter alone will still know how to build a boat.