Public Work Should Be Done By The Public Sector

A recent article - Waukesha's Zignego Co. lowest bidder at $87M for Highway 50 road project - made me again think of the delusional efficient private sector viewpoint. 

Conservatives and wannabe-economists have, for years, pounded the private sector efficiency drumbeat. Sadly, this perspective is as misguided today as it's ever been.

For the majority of private sector actors, the modus operandi has been to cut corners, pay workers less and/or to simply not do certain tasks altogether. 

For Further Reading:

The Lean Efficiency (And Persistence) Of Private Sector Lies

Privatization, Increased Costs And Income Inequality

Fizzle for the buck

Why public–private partnerships or other ‘innovative’ financing of infrastructure will not save taxpayers money

And The Winner Is....The Public Sector

Myth: The Private Sector is More Efficient Than the Public Sector

Why taxpayers are getting a bargain from public-sector workers

Buzzwords Are Not Public Policy or We've Heard Enough From So-Called Business Experts

More cliched economic jargon from error-prone businessmen. 

Biden Needs Some Business Experts

The article moans, "The new administration does not have a lot of chops when it comes to job creation. That’s largely in the domain of the private sector. Biden and his crew are loaded with experience in managing the government, but are extremely shallow in knowing what to do to help the private sector become vibrant again. Remember, all tax revenues come directly or indirectly from dynamism in the private sector. Most companies deserve to be revered for providing jobs and tax revenues, but that is not the mindset of the progressives in the Democratic Party. Their proclivity is regulation. Common sense regulation is a necessity in any economy, but more important is turning entrepreneurs loose to reinvent the economy. They are the job creators, not the government."

There is so much wrong here, it's hard to know where to begin. There are so many regurgitated conservative falsehoods in this right-wing word salad, it really does make the mind spin. For someone who can occasionally make reasonable sounding arguments, John Torinus, more often, just parrots typical Republican talking-points. 

Biden has been working for the citizens his entire adult life. He's plenty familiar with job creation. Republicans are the party that has left this country in recession after recession over the past few decades. And, it has been the Democrats who enacted targeted policies to help pull the country out. Biden was Vice President during the Obama Administration, in case Mr. Torinus has forgotten that fact. 

What did Obama and Biden do? There has not been a consistent job market expansion on record, dating back to 1939, that lasted longer than the expansion during their administration. Job growth was faster than population growth—a key measure of a healthy job market expansion. The typical weekly pay of U.S. workers has been increasing since early 2013 and re The ACA made it possible for more than 20 million individuals to afford health insurance and decreased the share of Americans without health insurance to an all-time low.ached its highest level on record, dating back to 1979, at the end of 2016. They inherited a deficit that claimed 9.8 percent of gross domestic product (GDP) in fiscal year 2009. By FY 2016, the deficit had fallen to less than one-third of that, at 3.2 percent of GDP.

Seems like they know something about job creation, reinventing the economy and helping the private sector be vibrant.

And this "dynamism in the private sector" and "turning entrepreneurs loose" are, as Joe Biden would say, a bunch of malarkey. This country has been cutting taxes and deregulating the past 40 years. If the private sector entrepreneurs are so damn dynamic, why does the economy keep falling back into recession when we allow Republicans control of the government?

It's long overdue for the private sector knows it all, government needs to get out of the way-gang to go away. The public sector employs over 20 millions people. The public sector accounts for nearly half of the entire economy. This idea, pushed by Republicans for decades, that government is inept and wasteful is wrong. If anything, the private sector is the wasteful and inefficient actor. Not to mention the fact that the private sector is also selfish and greedy.

Private retirement account fees are drastically higher than public pension fees or Social Security fees. Much of the medical advancements we see are due to university research and the National Institutes of Health. Study after study has shown that public infrastrucutre projects are cheaper when done by unionized public workers, rather than being bid out to private corporations.

 

So, please, Republicans, conservatives, dynamic private sector know-it-alls, please step aside and let the adults in the Democratic party save the country from your destructive and misguided ramblings once again.

Wisconsin's Public Sector Is Smaller Than Most States'

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Weekend Reading

Born-Again Fiscal Hawks Turn Into Doves
The Economy Is Soaring, And Now So Is The Deficit.
GOP Abandoning The Free Market
Kimberly-Clark Proves Tax Giveaways Don't Stop Layoffs
Wisconsin's Public Sector Is Smaller Than Most States'
Jeff Bezos' Quest To Find America's Stupidest Mayor
Foxconn Package Cost Wisconsin Eight Times As Much Per Job As Similar 2017 State Jobs Deals
Let's See How Low The Unemployment Rate Can Go
How Progressives Can Criticize Trump’s $7 Trillion Deficit Without Preaching Austerity
Why American Workers Aren’t Getting A Raise: An Economic Detective Story

17 WTF Items From Donald Trump's Budget

'Morally Bankrupt' Budget: After $1.5 Trillion Gift to Rich, Trump Demands $1.7 Trillion in Safety Net Cuts

Sunday Reading

Wisconsin Faces Nearly $1 Billion Shortfall On Roads
Caterpillar Inc. Says More Job Cuts Are Coming This Year
Skills Don't Pay The Bills
The King of Subprime Lending
Government Holds the Promise of Faster Growth
What's Really Wrong With the Unemployment Rate
Wisconsin Public Sector Costs Rank Below Most States
Municipal Spending Highest Since 2011

Wisconsin Reading

Scott Walker's Food Stamp Cuts Are Coming To A State Near You
In Wisconsin, Little Conserved By Radical Conservatives
Fewer Teachers, Less Experienced Teachers Mean Challenges for Wisconsin's Public Schools
Wisconsin's Public Sector is Leanest in Two Decades
Wisconsin Has Far Fewer State Employees Than Most States
Scott Walker Signs Bill Limiting Doe Probes As Records Are Released
The Use and Disclosure of Personal Email in the Walker Administration
"Wisconsin is Moving in the Right Direction"
Wisconsin Government Revenue is Not Out of Line
Slay The Wisconsin Gerrymander
Wisconsin Not High in Taxes, Spending
WEDC May Have Illegally Awarded $21 Million in Tax Credits
Wisconsin's Position Again Inflated in a Tax Ranking
Discovery of Census Flub Tempers State's Tax Hell Status

Evil Socialism At Work

Correcting The Right-Wing Myths About Detroit

Don’t buy the right-wing myth about Detroit

In the wake of Detroit’s bankruptcy, you may be wondering: How could anyone be surprised that a city so tied to manufacturing faces crippling problems in an era that has seen such an intense public policy assault on domestic American manufacturing? You may also be wondering: How could Michigan officials possibly talk about cutting the average $19,000-a-year pension benefit for municipal workers while reaffirming their pledge of $283 million in taxpayer money to a professional hockey stadium? ...

It’s a straightforward conservative formula: the right blames state and municipal budget problems exclusively on public employees’ retirement benefits, often underfunding those public pensions for years. The money raided from those pension funds is then used to enact expensive tax cuts and corporate welfare programs. After years of robbing those pension funds to pay for such giveaways, a crisis inevitably hits, and workers’ pension benefits are blamed — and then slashed. Meanwhile, the massive tax cuts and corporate subsidies are preserved, because we are led to believe they had nothing to do with the crisis. Ultimately, the extra monies taken from retirees are then often plowed into even more tax cuts and more corporate subsidies.

Just How Generous Are Detroit's Worker Pensions for Retirees?

"My basic takeaway was that [Detroit's] pension system itself was not overly generous," said Jean-Pierre Aubry, assistant director of State and Local Research at Boston College's Center for Retirement Research... 

Retired general city workers, such as librarians or sanitation workers, received average payments of $18,275 a year in 2011, according to the Detroit General Retirement System... 

While retired Detroit firefighters and police officers receive more generous pension checks than auto workers -- checks averaged almost $30,000 a year in 2011 -- they often don't receive the added bonus of Social Security payments.

We Need A Federal Bailout for Detroit's Pensions

Does $1,500 a month after hauling garbage cans your whole adult life really sound like a fortune? ...

Retired Detroit employees didn't cause the financial crisis of 2008, which hit the pension plan's investment fund hard. Yet they're being handled as if they were morally equivalent to the Wall Street creditors who did. As the New York Times reports, the unelected city manager's plan would "treat bondholders the same as retirees" and ask them both to sacrifice... 

The average Detroit city pension is slightly less than $19,000 per year. For police and firefighters, pensions are their only source of retirement income. (They don't have Social Security.)

Five myths about Detroit

The real culprit in the city’s decline has been federal policies that put corporate health ahead of community health, such as free-trade agreements that sacrifice U.S. jobs for foreign trade...

Detroit’s major financial problem is that its shrinking tax base has meant years of declining revenue. Remember, the city has lost more than 1 million residents since its population peaked in the 1950s. Those who blame pensions confuse cause and effect — like blaming a personal bankruptcy on a pesky car loan after one’s salary was cut in half. The difference, of course, is that getting rid of a car you can no longer afford isn’t the same as reneging on a promise to 21,000 retirees.

This Kitten Has Claws

City to block raises for many public workers who leave Milwaukee

For Further Reading:
Residency Requirement: Reading & Facts
Residency Requirements
Logic Requirement

State & Local Jobs Disappearing

State and local governments had 703,000 fewer employees in June 2013 than in August 2008, according to the jobs numbers released on Friday. That number has barely budged since January 2012 (see chart), meaning that in the last year and a half, states and localities essentially have made no progress in refilling the giant workforce hole that the recession caused. Although the days of drastic employment cuts seem over, state and local governments aren’t replacing the teachers, firefighters, police officers, sanitation workers, and many other critical employees that they lost in recent years.

[source]

Year-over-year change in employment.

[source]

Government Continues To Shed Workers

Year-over-year change in employment.

[source]

Income Inequality

America Is The Only Rich Country Without Guaranteed Paid Vacation Or Holidays

American Workers Losing Ground On Wages
Globalisation Isn't Just About Profits. It's About Taxes Too
Median CEO Pay Rises To $9.7 Million In 2012
1 Chart Reveals How Unfair The U.S. Tax System Has Become

Public & Private Sector Payroll Jobs

When The Rich Get Richer, Taxes Go Lower

A Steaming Pile Of Boldness

The Journal Sentinel is back pushing Walker's venture capital slush fund, Legislature Should Establish A Fund For Venture Capital.

Wisconsin politicians continue to argue about how many jobs have been created on Gov. Scott Walker's watch - and even how to count those jobs. This was inevitable, of course, given the governor's promise that 250,000 jobs would be created during his first term.

But rather than argue over numbers, how about focusing on policies that might make a difference?

Yes, just forget about Walker's (completely ridiculous) promise of 250,000 jobs, which undoubtedly helped win him the election. We don't want to actually evaluate politicians on the things they've said.

The whole article is a well-worn regurgitation of cliches regarding the magic that is venture capital.

With job growth and income sluggish in the state, we continue to believe the best answer is unleashing good ideas that could be turned into young companies that will employ people. Research by the Ewing and Marion Kauffman Foundation a couple of years ago found that between 1977 and 2005, existing companies lost about 1 million jobs a year while new companies added an average of 3 million jobs. Since 2008, the pace of hiring is stronger in companies that are two years or younger, Kauffman found. 

Simply put, we need more entrepreneurs, and we need to figure out how to mentor them and invest in their ideas.

Yes, we need more entrepreneurs. We need more jobs. Bold insight.

The pace of hiring may be strong in young companies, but what they also fail to mention is that the pace of firing is also higher amongst younger companies.

The article then (to supposedly support a venture capital fund) points to UW-Madison's Research Park, and UW-Milwaukee's and the Medical College's increased research, which has created jobs. Yet, this seems like more of a substantiation for investment in our universities. Is the Journal implying we should spend public dollars for private benefit? Should we continue the process whereby our public sector provides tax credits, other funding, university R&D, and a host of other giveaways, in which private entities get to reap the majority of the rewards? Here's a novel idea, how about public investment with public rewards.

But young companies need a continuum of support - from the early going when the entrepreneur mortgages her house to get started to the first "angel" investors who take notice to the point where larger infusions of money are needed from venture capitalists. And in Wisconsin, there long has been a gulf between the typical angel investor round and the venture capital round.

What did companies do before venture capital?

Despite a good fourth quarter, Wisconsin attracted only $95 million last year, according to the MoneyTree Report by PricewaterhouseCoopers LLP and the National Venture Capital Association. Nationwide, venture capitalists invested $26.5 billion.

What is the average amount states attract? Where does Wisconsin rank among the states in attracting capital?

Another article from the Journal notes, "State companies pulled in more than $95 million during the full year, up 31% from 2011, when they raised about $73 million of venture capital...Nationally, venture capital investment declined for the first time in three years. Venture capitalists invested $26.5 billion in 3,698 deals in 2012, a 10% decrease in dollars from a year earlier."

So, nationally venture capital is declining, yet over the past year it increased 31% in Wisconsin. Seems like money has already decided Wisconsin is a decent investment, even without the State providing additional funding.

The Journal continued, "But while $25 million is a start, it's probably only a down payment. The state needs something closer to $150 million, perhaps funded over several budget cycles, to attract the interest of top venture capital funds. "If the state really wants to get to critical mass, then we're going to need more than $25 million," said Tom Still, president of the Wisconsin Technology Council and the Wisconsin Innovation Network. The "Be Bold Wisconsin Prosperity Strategy" report, which grew out of a series of economic summits around the state in 2010, called for an even larger commitment."

We need to put up at least $25 million and also some type of continuing commitment? If we applied the same amount to public works - infrastructure, green buildings, energy grid, sewage and water systems, etc. - wouldn't that just as efficiently and effectively ignite the economy and put people back to work? And, we wouldn't have to worry about the speculative nature and the whims of the private sector. Not to mention, we could actually ensure these were good paying jobs.

Finally, it seems rather odd that the Journal Sentinel and the Republican class-war criminals were so quick to talk about a Wisconsin's (phony) budget crisis, how we were broke, how public workers had bankrupted us and caused the recession. Yet, in their next breath, they cackle about spending on sport stadiums, venture capital, and numerous other ways of funneling public dollars to obscure private sector schemes. Yes, we're broke, until the power-brokers whom are already garnering most of society's gains decide they want more.

For Further Reading:
Casino Capitalism
Cut Out The (Private Sector) Middle Man
Deja Vu
Fund Fail
Haplessly Venturing
Risky Business
Something Venture, (Virtually) Nothing Gained
Venturing Aimlessly
Venturing Wisconsin's Money

State/Local Versus Private-Sector Workers

State/Local Versus Private Sector Workers 

Putting aside job security, the calculations show that state/local benefits nearly offset the private sector wage premium, but compensation in the public sector is 4 percent less than that in the private sector

Key findings:

• State and local workers have a wage penalty of 9.5 percent.
• Pension contributions and retiree health insurance help close the gap.
• Total compensation for public sector workers is about 4 percent less than that in the private sector.

Update:

Just wondering why these studies (like the one above) - the ones where academics actually look at the numbers and report on such - rarely are discussed in the Milwaukee Journal Sentinel. Every anecdotal story and "gut" feeling was paraded out in their reporting during Scott Walker's vilifying of public workers. The claims of excessive pay, overly generous benefits, etc. This was all reported as a given, a known fact.

It was, and is, nothing of the sort. Studies refuted it then, and they still refute it now.

Public workers are a bargain. Private workers doing the same work would cost you (at least) 4% more.

Republican Shrinkage

Republicans often repeat the line, "Most Americans want a smaller government."

A classic example of Republicans getting an inch and taking a mile.

Most people simply want efficient provision of services. The number of public workers is not important to most taxpayers. The quality of service per tax dollar is what concerns taxpayers most.

The idea that simply shrinking government for the sake of shrinking government is wanted and/or somehow optimal is false. Taxes, as a share of income, are at their lowest point in 60 years. It's difficult to argue government is wasteful when they have been continually doing more with less decade after decade.

And, whether the service is administered at the federal or state/local level doesn't really matter to most taxpayers. This distinction matters most to the politicos trying to maintain their fiefdoms. Taxpayers just want the service/program - regardless of which agency (state or federal) provides it.

Social Security, Medicare, police and fire protection, sewers, water, garbage collection, snow removal, roads and highways, trains, unemployment insurance, the court and judicial system - people want these services provided fairly and efficiently, they don't care which level of government performs the service. (Today - Thanksgiving - would be a good day to reflect on these programs which we collectively provide for each other.)

Republicans merely cling to this talking-point (we must shrink government) because it positions well alongside their never-ending "bad government" war chant. When it comes to the public sector, according to Republicans, less is always better.

Yet, for most citizens, less government means more inequality. Remember this the next time you hear some conservative blathering on about big bad government. The more government declines, the less services and programs (listed above) they can provide, and thus the quality of life of most citizens also declines.

Jobs: Bush Versus Obama

From Think Progress, "Private sector job creation under President Obama has far exceeded private sector job creation under President Bush. 40 months into his presidential term, there are currently more private sector jobs in the economy than when Obama came into office. At the same point in President Bush’s term, the total number of private sector jobs was still down 1.7 percent from where it began.

The numbers are even starker when measuring each president’s record from the moment job creation returned. Private sector job creation returned in February of 2010, the 13th month of President Obama’s term. Since then, the economy has added 4.3 million private sector jobs, a 4 percent increase.

Under President Bush, the economy stopped shedding private sector jobs in July of 2003, fully 30 months into his administration. From that point until May of 2004, the economy added just 1.5 million private sector jobs, an increase of only 1.4 percent."

Andrew Leonard notes, "But the real eye-opener comes when we compare Obama’s numbers to George W. Bush’s. In Bush’s first term, the economy shed 913,000 private sector jobs! 913,000! The only thing that saved Bush’s first term from being a complete economic disaster, in terms of employment, was robust public sector growth: The economy added 900,000 government jobs. One wonders: Without the massive growth in the public sector during Bush’s first term, would he have been reelected?"

The only thing that didn't make Bush's first term job creation numbers a complete disaster was the growth of public workers - the government. Obama accomplished much better total job growth in his first term, even with an unprecedented decline in the number of public workers.

And, in general, the economy creates more jobs under Democrats - 42 million during Democratic administrations versus 24 million during Republican administrations.

Whichever period we choose to dissect, we can see the country is better off under the Democrats. Plus, the idea that President Obama has performed poorly is highly misguided. No doubt, we'd all rather see more robust job creation, to bring the unemployment rate down toward a more respectable 5 or 6 percent. But, if the millions of jobs created in Obama's first term is some colossal failure, then the nonexistent job growth during Bush's first term is the absolute worst performance we've ever seen. This is surely not an endorsement for giving the White House back to the Republicans whom have performed so comparatively poorly.

So, if the economy is the important issue we all should be focused on during this election (as Republicans seem to indicate), based on their past performance versus the current President's performance, the only choice is Barack Obama.

The Republican Political Fantasy World

The Journal Sentinel gave space to Gary Kraeger, appraiser from Wind Lake, to defend put-upon business owners from that big meanie, Barack Obama.

I guess Gary didn't want to actually put the President's comments into context. Nope. Instead, he just decided to pile on and continue misrepresenting the actual point the President was trying to make. Pretty much par for the course, as far as Republicans are concerned.

The President's point wasn't that no one starts his/her own business. He was simply reminding everyone, in this time of government bashing, that government does a lot of good for everyone - business owners included - such as: building roads, bridges, schools, etc.

The idea that Obama was criticizing business owners is a figment of the Republicans' imagination. The whole concept is merely another nefarious political ploy of the Republican party. Obama hates job creators, he's a socialist, and on and on.

Gary starts off assuming, "Of course no one claims he or she built all the roads or that roads aren't important. Everyone recognizes necessary symbioses. Everyone knows that lots of people are smart and work hard."

When is the last time you actually heard a Republican admit the importance of anything the government does? Do they really recognize the symbioses? Do they really think lots of people are smart and work hard?

I only hear stuff about government being the problem, how the private sector can do everything more efficiently, and how so many of our fellow citizens are moochers, free-loaders, and pay nothing in taxes.

Next, Gary then, playing into this false idea that Obama was knocking business owners, tries to create the idea that Obama was picking on business owners because that will "play well" with his voting bloc. "If he can establish that private-sector success is wholly dependent on government, he can make the case that no amount of taxation can ever be too much, and that really plays to those blocs." Yes, because President Obama has been increasing taxes across the board. Oh wait, he actually hasn't.

Gary then makes the false equivalence between firefighters, teachers, minorities, welfare recipients, versus business owners. See, Obama was picking on the latter and letting his voting bloc off the hook. The Republicans and Gary have taken Obama out of context, now they are inventing all the motivations and true meanings behind such a fantasy scenario. The only problem with this whole comparison Gary is imagining is that the firefighters and teachers actually do understand society's interconnectedness. They aren't the ones demonizing government and continually asking for lower taxes.

Then, things start coming off the rails (even more so) when Gary opines, "He didn't say that business people paid their share for the roads and teachers. He didn't point out how those same roads, police and teachers are there for Bill Gates as they are for the guy playing video games and drinking, the guy in prison or the people who fail in business." Yes, because the guy in prison, the guy playing video games, et al have benefited from society's institutions at the same level as Bill Gates.

When you ignore the reality that Warren Buffet's secretary has to pay more taxes (as a percentage of her total earnings) than Mr. Buffet has to, you can continue with the fantasy scenario that businesses and the rich are paying their fair share. And, one can spin on and on with endless falsehoods based on these faulty foundations.

President Obama's grand theme of his speech was that - the Walmarts and Exxons of the world have made more and more, while paying less and less in taxes, and continually attempting to pay even less, all while demonizing the government and all the good things it does, even though they have benefited enormously from those efforts and continue to benefit greatly. Is it really that hard for Republicans to grasp the simple concept - based on fairness - that those whom are doing extremely well have benefited from schools, roads, courts, police protection, and clean water, and should, therefore, give a more little back?

You've been gaining more and more income year after year based on the contractual obligations our courts uphold, based on the resources and routes our military protects, based on the roads our police patrol and the buildings our fire fighters protect, based on the knowledge and labor the workers - trained in the public schools - provide. You've been gaining more and more and paying less and less...we think you should give back a little more. Socialism!!!

In the Republican fantasy world, one can simply make up stuff, imagine what bad things their opponents are doing, misrepresent positions, and slander and lie about anything and everything taking place on the planet. The Truth has now become a Republican construct.

What a lovely day it will be when we can actually start having honest policy discussions based on reality again. Sadly, the Republicans are doing everything in their power to prevent such from happening.

(Un)Real Job Losses

Rick Barrett informs, Impending Military Cuts Could Cost Wisconsin 11,000 Jobs.

Luckily, public sector jobs aren't real jobs (according to Republicans), so it doesn't matter.

For Further Reading:
Threats From Mounting Public Job Losses
Unemployment Rate Without Government Cuts: 1%

State & Local Austerity Hurting Job Growth

Three years into recovery, just how much has state and local austerity hurt job growth?

Presidential Administrations & Government Employment

Spot The Socialists