How Washington profits by pillaging America
As a taxpayer, I don’t like overpaid bureaucrats. But as an economist, I’m even more upset that human capital is being misallocated to unproductive purposes. Big government means big waste
I’ve been banging the drum for years about Washington being a racket for the benefit of politicians, cronyists, bureaucrats, contractors, lobbyists, interest groups, and other insiders.
I’ve written about horrific examples of bloated spending that line the pockets of the well connected.
I’ve exposed rampant corruption with insiders getting rich at our expense.
But I’ve never figured out an effective way of combining all these issues. So I’m very happy that Scott Beyer of the American Enterprise Institute combines these themes in a very good article about our self-serving political class.
Here’s some of what he wrote.
"…the nation’s capital today is wealthy and growing. Metro Washington now has six of the nation’s ten wealthiest counties. In 2012, Falls Church became the nation’s richest city… The region’s median household income is $88,233, second in the nation… But while in other cities this might be a success story, in Washington it comes with a catch. Rather than resulting from private industry, it merely underlies the growth of the city’s leading employer, the federal government. The city’s flourishing has seemed especially perverse in recent years, as the rest of America has lagged economically. Every tax dollar spent represents less money in the private sector to create jobs."
That’s all good material, but this pictograph is absolutely superb. It’s a very compelling summary of how Washington has become a fat and happy imperial city.
Very well done.
It should be clear to everyone that Washington is booming, and hopefully they make the obvious connection that D.C.’s wealth comes at the expense of America’s productive sector. While the pictograph is excellent, Beyer has some other observations that are worth sharing.
For instance, there’s been an explosion in the amount of money diverted to lobbying by firms, as well as a huge jump in the number of politicians who cash in on their contacts.
"One growth industry, due to the vast expansion of the federal government’s tax and regulatory rules, is lobbying. Businesses spent $3.24 billion last year on lobbying, up from $1.45 billion in 1998 and $200 million in 1983. Two-thirds of US senators and representatives joined the lobbying industry after leaving office in 2012, up from a small fraction in the 1960s."
Because I support the Constitution, I don’t object to the concept of companies exercising their 1st Amendment rights to petition the government.
But I do wish government was much smaller so that companies didn’t have so much interest in what happens in Washington. Particularly since companies oftentimes get seduced into treating Washington like a profit center.
Simply stated, as I explain in this video, big government is inherently corrupting. Beyer also makes some important observations about the overpaid government workforce.
"…the region houses about 14 percent of America’s 2.1 million civilian federal workforce, one in five of whom earns an annual salary of more than $100,000. In 2012, federal civilian employees’ median salary was $81,704, compared to $54,995 for the private-sector employees; after accounting for fringe benefits, those figures go to $114,976 versus $65,917, respectively."
As a taxpayer, I don’t like overpaid bureaucrats. But as an economist, I’m even more upset that human capital is being misallocated to unproductive purposes.
For more information, here’s my video explaining that the bureaucracy is far too big and paid far too much.
Though if you prefer specific examples, this post contains the charter members of the Bureaucrat Hall of Fame. And if you’re not already sufficiently nauseated, you can click here and here to learn more about how you are subsidizing fun and games in Washington.
Daniel J. Mitchell, a long standing contributor to The Commentator, is a Senior Fellow at the Cato Institute, the free-market, Washington D.C. think tank. His articles are cross-posted on his blog by agreement
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