Posted by: Jeff | April 9, 2010

Populist Resentment and Spreading the Misery

Paul Krugman is certainly right that Larry Kudlow is operating in a fantasy-land when he claims that cutting the pay of federal employees could significantly reduce deficit spending. (David Frum did the math, and concluded that a 5 percent cut across the board would save about $13 billion. A drop in the federal budget bucket.) But I think Krugman misses a key reason why this notion is such a key part of conservative imagery, as he put it.

Go back to that Wall Street Journal piece Kudlow was working from, and read the opening bits:

Government employees on average have higher pay and bigger benefits than the private-sector employees who support them with taxes. This has become a well known fact.

When private firms run extended losses—spending more money than they take in—their employees must share in the necessary adjustments. But how about when governments spend much more than they take in, running huge and extended deficits? What should happen then? This is something Americans who work in private companies might consider while they file their tax returns over the next week.

Maybe it’s not immediately apparent, but what’s operating here is good old-fashioned resentment. “Those highfalutin government employees have secured themselves sweet deals largely sheltered from the ups and downs of the economy, a luxury unavailable to hard-working Americans in the private markets! If they were working real jobs out here in the real world like the rest of us, they wouldn’t be enjoying such cushy circumstances. It’s not fair!” Or something to that effect.

This resentment of federal employees as an illegitimately privileged class strikes me as pretty common amongst conservative populist types. Just look at the comments inspired by one of my previous posts shit-talking the Tea Partiers. And this resentment is coupled to a lazy – but, I suppose, understandably human – assumption that such an injustice cannot possibly be of insignificant practical impact, and cannot possibly come cheap, since those federal employees’ much-mythologized privilege is so much greater than everyone else’s. So it’s further assumed that righting that injustice would surely bring with it a large improvement in our fiscal situation.

In that sense, the logic of it is rather similar to that involved in opposition to earmarks and pork barrel spending. Since many people find the practice of earmarks so objectionable in principle (we’ll set aside whether they should find it so objectionable) they assume it must be equally damaging in practice. But, of course, the real world is a messy and ironic place, so in reality earmarks make up less than one percent of annual federal expenditures.

One other thing I would note. This resentment of federal employees is an example of the strange tendency among conservative populists to forgo actually improving the circumstances of average Americans in favor of making sure the misery is as equally distributed as possible.

To whit: It seems to me that federal employees enjoy unusually good salaries and benefits because they work for a political institution, rather than a purely economic one. As a political institution, subject to votes and elections, the federal government has to worry about voter perceptions, and whether it’s seen as treating its employees with the proper levels of respect and decency. Private businesses, meanwhile, don’t have to worry about anything except the bottom line. The obvious lesson would seem to be that if American workers as a whole want to enjoy the same circumstances of federal employees, then they need to find ways of forcing private businesses to respond to those same extra-economic incentives. And this will probably involve various forms of collective action: government regulation, consumer movements, organized labor unions, etc.

But it’s a lesson at least some Americans appear determined not to learn. Instead, they seem to want to take the same cruelties and vicissitudes of the private markets which they already live under, and inflict them on federal workers as well. It’s exceedingly bizarre.

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Responses

  1. 1) There is so much redundancy/overlap of programs within the federal government, to the point IMHO it would take someone’s entire career to completely chart or graph it;

    2) Civil Servants/GS employees are not subject to recall if “their” party is not in power. (Only at the Senior Executive Service [SES] level does it possibly impact his/her career.) The bulk of the civil servants in the U.S. remain in their careers year in, year out, sometimes moving between agencies, sometimes not;

    3) There is in the United States a group of people who dislike unions because of their historical, political roots, their history of corruption (at least in the U.S.), and the current push for open/public balloting in the “Yes, Union”/”No, Union” debate.

  2. Your 3) is fair. Unions haven’t done much to help their reputation.
    Your 2) fails to mention the fact that when parties switch they can have impact in terms of budget, limiting and expanding other departments. I have a relative in the FDIC, and during the Bush years she claims that dept shrunk quite considerably because the then President’s POV on bank regulations.
    1) any hard data to back that up?

    When the people are hurting we tend to point and blame at groups whether they deserve it or not. Everyone pointing at “govt employees” (such a diverse pool that covers scientists, doctors and people who work the register in a cafeteria) is not going to help things.

  3. Joe,

    Not only did FDIC shrink during the Bush years, but so did NPS [National Park Service], so I agree somewhat that different presidents have different ideas about which programs are essential to government and which are not.

    As regards redundancy/overlap, I will give you this to ponder:

    USDA: Agricultural Marketing Service;
    USDA: Agricultural Research Service;
    USDA: Animal Plant and Health Inspection Service;
    USDA: Economic Research Service
    USDA: Food and Nutrition Service
    USDA: Rural Development.

    HHS: Food and Agriculture
    HHS: Agency for Healthcare Research and Quality
    HHS: Agency for Toxic Substances and Disease
    HHS: Centers for Disease Control
    HHS: Centers for Medicare and Medicaid Services
    [IRL, these link to SSA, both regular SSA benefits for the elderly and retired, SSDI {disability for working aged people}, and SSI {income for people who receive SSDI and have children under the age of 18}]
    HHS: National Institutes of Health [NIH]
    HHS: Substance Abuse and Mental Health Services Administration.

    While I am certain that each individual subagency has its own mission, there comes a point in time when the ideals must face reality…what precisely can the United States government *not* live without?

  4. The portion of the United States budget that does not include defense, Social Security, Medicare and other forms of mandatory spending is a little less than one quarter. You could get rid of that quarter entirely – rather than just cutting waste and overlap – and we’d still be in deficit by around $300 billion. To get even more specific, the USDA and the HHS account for 1.48 percent and 2.22 percent of the budget, respectively. Even if there is significant redundancy/overlap between these departments, who cares? I mean that seriously. They’re drops in the budgetary bucket. Any realistic reforms to government departments other than defense, Social Security or Medicaid Medicare would barely make our levels of deficit spending twitch. Which gets back to my post’s original point about pay levels for government employees.

    And I’m not nearly as impressed by point 3. Plenty of institutions and groups have been heavily involved with corrupt and/or criminal behavior over the course of the country’s history. Just look at any major corporation before the labor reforms of the early 20th century, or the financial industry right at this moment. None of them, with the possible exception of finance, get singled out for opprobrium the way organized labor does. And even in finance’s case, that opprobrium is probably temporary, and will evaporate as soon as the economy picks back up. Hostility to unions has been sustained and ongoing for a while now.

    And the civil rights movement, to give another example, emerged from historical and political roots just as controversial as those that gave rise to the unions. But no one objects to the civil rights movement on those grounds.

    I think the reason for these discrepancies is rather obvious. First and foremost, conservatives object to what unions are FOR in the first place. They just don’t think, as a matter of principle, that everyday working Americans ought to collectively organize to counterbalance the power of employers and big business. They think working Americans should just meekly acquiesce to whatever scraps the higher-ups want to give them, and then do as they’re told. The entire purpose of unions is considered suspect in a way the purpose of the civil rights movement simply is not. Bringing up the political roots of unions, or the historical coincidence that they happened to be involved with organized crime for a time, is just icing on that more basic cake.

  5. Jeff,

    Absolutely, defense, SSA and HHS (the department under which Medicare and Medicaid fall) are ‘sacred cows’ in the U.S. budget. And just servicing the United States debt is killing us. (See .) But the examples I gave were just a quick swipe — as I stated, it would take a reasonably intelligent person an entire career to map out all the reduncancy and overlap over the entire federal system.

    I am absolutely on board that corporations should be loyal to the people/country that buys their goods and services by *employing* the people who buy their goods and services at a living wage. Unfortunately, the current system does not reward companies who do so — whether by deferment of tax liability or some other method — the current system is designed to reward the investors who put money into the company to make a profit. Labor is an expense; just like raw materials to make widgets is an expense. If random company X can make part Y less expensively in country Z, pay import taxes on part Y, and sell it to the U.S. population at a profit, it’s a given company X will make that part Y in country Z.

    Additionally, the majority of U.S. businesses are *not* “big business.” According to the Small Business Administration, businesses with less than 500 employees make up 99.7 percent of all businesses in the United States. The report can be found here: . As regards unsafe labor conditions, we have an agency for that: OSHA. Been discriminated against? We have an agency for that: EEOC.

    If you’re in favor of caps on executive pay and linking bonuses on actual performance, a la the Japanese model, just say so.

    I was not referring to organized labor’s ties to organized crime. I was referring to events which occurred before so-called “Mob Families” or Communism/Socialism got involved. Example: The Irish Molly McGuires. Either you’re in or you’re for the owner and the horrible conditions we labor under. Join us or leave. Join us or die. In Ireland, it was against the landowners. And although the details are shaky, possibly in the Pennsylvannia coal country in the 1860s. (BTW, I come from a union family. Unions work great in theory, but not so much in practice.)

    I’m trying to connect the dots regarding your comment about the historical and political roots of the civil rights movement and the rise of the labor unions being “just as controversial.” IMHO, the treatment of the Blacks/African-Americans between the Emancipation Proclamation and the Civil Rights Act makes the treatment of workers by their employers pale in comparison. (Who would work for anyone known to be responsible for lynching his/her employees? Although the “Executive Washroom” versus the “Workingman’s Washroom” might hold water…) In a phrase: Just breathe. I think we agree fundamentally, but simply disagree on method of execution.

  6. Elizabeth

    Ha. Okay. Breath taken. :) And just FYI, it appears your links didn’t publish for some reason.

    Anyway, I think part of the confusion here is that I’m not sure why you brought up the point about redundancy in government in the first place. It seemed to me there might be three reasons. 1) To argue that, due to redundancy, cutting government workers’ pay might significantly impact the deficit after all. 2) To justify/explain, partly or in full, resentment of government workers amongst portions of the populace. 3) Just to make the point.

    If it was 1) then I refer back to my previous comment. Three-fourths of our expenditures come from just four programs, and those programs aren’t expensive because of redundancy. They’re expensive because of the nature of what they do. By contrast, the remaining alphabet soup of government agencies – in which there could conceivably be a lot of redundancy, per your USDA/HHS example – accounts for less than one quarter of the budget. So even if our proverbial intelligent person with a career to spare could map all of the redundancy, eliminating it wouldn’t shave more than a few percentage points off the budget.

    If it was 2) I’d repeat the point in my original post that government workers get a higher salary and better benefits than their counterparts in the private markets because government responds to different incentives than private companies and thus treats its employees better. If we eliminated redundancy, the salaries/benefits of government workers wouldn’t fall into line with those of private workers. There’d just be fewer government workers, still with better benefits/salaries than everybody else, and they’d still be resented.

    If it was 3) well, okay. But given my response to 1) and 2) I’m forced back to my earlier question: Who cares? (Or to be more precise, and probably less flippant: Why does redundancy/overlap matter to the question at hand?)

    To the question of unions: I assumed, when you brought up the historical and political roots of unions, you meant involvement with communism/socialism and various other “lefty” outfits. My point in bringing up the civil rights movement was that it had a lot of the same leftist and radical influences that people object to when it comes to unions, but no one holds that against the civil rights movement. I didn’t intend to compare the circumstances of workers now to that of blacks before the Civil Rights era. (Though the treatment of workers in the late 1800s and early 1900s was pretty horrific.) However, since that wasn’t what you meant when you mentioned unions’ political and historical roots, I guess it’s a moot point.

    I will say that it seems kind of silly to object to unions based on what went down with the Irish Molly McGuires, or in Pennsylvania in the 1860s. It’s sort of like holding it against Democrats that they represented segregationist southerners pre-1960s. Or like thinking Republicans must have black Americans’ best interests at heart because Abraham Lincoln was a Republican. Institutions can change, sometimes quite dramatically, in relatively short periods of time.

    And not to drag this thread out to absurdly long lengths (but hey, I’m verbose and I enjoy argument) I’d be curious to know what your theory of how unions should work is. Because it appears to me that unions have worked quite well in practice. As you said, we have OSHA. And we have a minimum wage, and large amounts of workplace safety regulations and labor rights. Businesses and corporations, as a general rule, treat their employees far better than they did 100 years ago.

    Those changes didn’t all just fall out of the sky on us. It’s not as if government just one day decided to enact all those things on a whim, nor did business and corporate interests just roll over and let them happen. We got all those reforms because labor got organized and demanded them. We got them, to a large degree, because unions do work.

  7. Ugh. I missed that the links did not appear in my reply. My apologies. [Insert: “I hate wordpress” here.]

    2nd attempt: Debt Clock — http://www.debtclock.org [Please don’t ask me to make it a live link. In advance, I apologize for asking you to cut and paste the addy into a fresh window.]

    And the 2008 Small Business Administration’s Report to the President, which is the latest available online: http://www.sba.gov/advo/press/06-17.htm about the percentage of U.S. businesses which employ less than 500 persons.

    Well put: resentment by the general population toward government employees. Setting aside any anecdotal information about specific instances where an agency or sub-agency has either been remiss in acting on an issue at all or been glacially slow to act on a specific issue, I came across some data I am still attempting to verify. The information alleged that the average U.S. citizen in the private sector made $50,000 per year with between $3-4,000 in benefits (major medical, vision, dental, 401(k), paid holidays and vacations) [Oh, to be that average citizen! But I digress.] While the average U.S. civil servant allegedly makes $70,000 annually with up to $8,000 in benefits (same as private sector — except the upper end of paid vacation is 30 days per calendar year — with optional Thrift Savings Program and Long-Term Health Coverage available). If these figures are even in the ballpark, combined with the various agencies which have experienced growth since …oh, say, 1975, it’s easy to see that: 1) being a U.S. civil servant is quite lucrative and 2) anyone making less than 50k per year might want to know what it is, specifically, these 1.8 million employees do. (Source: wiki answers, and excludes the US Postal Service.) I am not alleging that all federal agencies have experienced growth in their employee numbers equally or that some agencies have not experienced down-sizing. It is quite telling, however, that since 1975 have those in federal service received a cost-of-living-allowance (COLA) annually except for three non-consecutive years. And if the employee is employed in certain high-cost-of-living areas, he or she receives separate compensation to offset that expense. (I will be most interested to see if there will be a COLA in January 2011.)

    In an attempt to get some perspective on recent federal budgets I did some research. (Source: The Washington Post, FY 2008, because the most recent I could locate from the General Accounting Office was FY 2003). Under Bush, the figures for receipts exceeding outlays would have occurred by mid-FY 2011, but that was proposed before the housing bubble burst. I located a graph chart for the current budget (FY 2010) at http://www.vizworld.com. (This budget will expire Sept. 30, 2010.) The author, Paul Adams, places Defense and “Other” [without explanation what “Other” is] in the “Discretionary Funds” ribbon — which I think Obama has frozen any increases in expenditures within the “Discretionary” funding area. While Social Security, Medicare, Medicaid, Troubled Assistance Relief (TARP?), Job Initiatives, and yet another “Other” fall into a “Mandatory” spending ribbon. A third ribbon, also called “Other,” includes: “Interest on Debt” and “Potential Disaster Costs.” From my point of view, the United States defaulting on servicing its debt would have catastrophic consequences, so why Mr. Adams excluded it from the “Mandatory” spending ribbon escapes me. [Mr. Adams’ brief bio states he works at a “federal high performance computing facility.”]

    Using Mr. Adams’ figures, the federal budget [expenses] equals 3.83 T dollars. By adding 895 B [Defense], 730 B [Social Security], 491 B [Medicare], and 297 B [Medicaid], I get 2.413 T — expenditures you state are “expensive, by nature of what they do.” I have not had the time to research what percentage of these figures work out as (in private sector terms) “overhead” [a non-exhaustive short list: human resources, office space rental — yes, the individual agencies pay ‘rent’ to a different agency which ‘maintains’ the building at the regional and federal levels where multiple agencies are housed in one building– and office supplies] versus “what they do.” In the cases of SSA and HHS: Medicare/Medicaid that would be the cash total of payments made to the general public. It seems to me that it is not in the interest of the federal government for this information to be readily available and in a format easily comprehendable by a non-accounting person. [If you have a source which is viewable online, please share.] I have looked at the GAO document (2003 and earlier) and seen a very convoluted way of expressing these expenses; they are divided by agency, mission, programs and other criteria. Not to put too fine a point on it, there is a growing number of Americans wondering how can the federal system be encouraged to do more with less resources? Reduce its mission? Ask the cadre of civil servants to mimic their private sector counterparts by 1.5 people doing the job of 3 people? And/or tighten their collective budgets for them by freezing their pay as millions of Americans have experienced? [Before you call for my head on a platter, I realize that 1,800,000 people are administering for the other 308,000,000 people.]

    If I come up with any inspirational ideas that aren’t re-treads of something already tried, I’ll let you know.

    Regarding the union and civil rights being connected by ‘leftist’ and ‘radical’ commonalities: I viewed the most comprehensive collection of the Civil Rights-era photographs and documents displayed to date at the High Museum in Atlanta, Georgia about two years ago. I recall photographs of a march by at least one union in Memphis (garbage collectors, IIRC), but I was more aware of the students and concerned citizens risking life and limb in voter registration drives and on the “Freedom Buses” (at least one of which was burned and some of the riders injured by smoke inhalation because locals — at first — would not let the riders exit the burning bus). While I’m not doubting there may have been some ‘leftist’ influences somewhere, the exhibit would indicate they were minor. It’s a given that in the South, in the late ’50s and early ’60s, equal rights for people of color was not a reality. The concept *was* “radical” to the South at the time, and in some places, still is to this day. From the few Civil Rights activists I have spoken to over the years, I got the impression the majority of their counterparts were not interested in changing the economic foundation of the United States beyond equal access to quality education, a voice in government at all levels, equal access to job opportunities, and equal treatment under and before the law. They were not interested in a leftward shift which today would be recognized as socialism, although at the time some people may have believed that was so. (I note both of you are from Texas and in your twenties — has your experience been different or are you speaking from what you were taught?)

    By the same token, not all union members are socialists — openly or in the closet. My familiarity with unions is the CWA and the AFL-CIO (sub-union (?): Steel and Glass Workers). The first works well for the rank and file. The latter kept workers employed who in a non-union shop would have been fired for their behavior on the job. The grievance process did not work unless you were “in good” with the shop steward. The plant I am referring to was eventually sold, twice, because it became less profitable than the investors could tolerate. At least some of problem could be traced to poor workmanship and failure to meet deadlines on orders [labor]. Another part of the problem was lack of improved equipment and technology [management]. Having witnessed two strikes (one by each union referred to above), I’m not completely without some knowledge relative to the 21st century. The CWA members were civil, but made their displeasure known, to “scabs” who kept the phones answered and repaired while CWA was on strike. The AFL-CIO/Glass Workers strike was not pretty. Non-union members and “scabs” who crossed the line were treated very rudely and, in one instance, a man had to be transported to the hospital in an ambulance after an altercation. After clocking out, many “outsiders” discovered their vehicles had been vandalized in the parking lot while they were working. Ergo, not all strikes are disagreements between labor and management which can be negotiated without hostilities breaking out. (The SGA-West Coast strike leaps to mind as a “civilized” strike.) In a perfect world, management and labor would acknowledge that they exist in a symbiotic relationship not an antagonistic one. Management would provide a safe work environment with up-to-date equipment, a livable wage and reasonable compensation package (benefits). Labor would provide quality workmanship and meet deadlines. This paradigm works whether one makes glass products for commercial use or keys data into a computer all day. But it isn’t a perfect world. And there are no simple answers or quick fixes.

    Out of curiosity, which additional reforms do you (either of you) think are needed now since union advocacy has been so successful in the past?

    IMHO, if the United States is to survive with any semblance of a healthy economy, it will take everyone pulling out every “out-of-the-box” idea they can come up with, bring it to the table, and work through the issues one by one until we find what the Chinese used to call The Third Path.

    Eeek, what a long response. Sorry. Also, I don’t view this as ‘arguing’ but sharing different points of view. Maybe it’s just me, but I always learn more when I discuss things with people who don’t agree with me. And I’ve actually been known to change my mind. :-)


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