The Path to Prosperity: America's two futures, visualized

We've Become a Nation of Takers, Not Makers - WSJ.com

By STEPHEN MOORE - WSJ.com

If you want to understand better why so many states—from New York to Wisconsin to California—are teetering on the brink of bankruptcy, consider this depressing statistic: Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government.

It gets worse. More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?

Every state in America today except for two—Indiana and Wisconsin—has more government workers on the payroll than people manufacturing industrial goods. Consider California, which has the highest budget deficit in the history of the states. The not-so Golden State now has an incredible 2.4 million government employees—twice as many as people at work in manufacturing. New Jersey has just under two-and-a-half as many government employees as manufacturers. Florida's ratio is more than 3 to 1. So is New York's.

Even Michigan, at one time the auto capital of the world, and Pennsylvania, once the steel capital, have more government bureaucrats than people making things. The leaders in government hiring are Wyoming and New Mexico, which have hired more than six government workers for every manufacturing worker.

Now it is certainly true that many states have not typically been home to traditional manufacturing operations. Iowa and Nebraska are farm states, for example. But in those states, there are at least five times more government workers than farmers. West Virginia is the mining capital of the world, yet it has at least three times more government workers than miners. New York is the financial capital of the world—at least for now. That sector employs roughly 670,000 New Yorkers. That's less than half of the state's 1.48 million government employees.

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Don't expect a reversal of this trend anytime soon. Surveys of college graduates are finding that more and more of our top minds want to work for the government. Why? Because in recent years only government agencies have been hiring, and because the offer of near lifetime security is highly valued in these times of economic turbulence. When 23-year-olds aren't willing to take career risks, we have a real problem on our hands. Sadly, we could end up with a generation of Americans who want to work at the Department of Motor Vehicles.

The employment trends described here are explained in part by hugely beneficial productivity improvements in such traditional industries as farming, manufacturing, financial services and telecommunications. These produce far more output per worker than in the past. The typical farmer, for example, is today at least three times more productive than in 1950.

Where are the productivity gains in government? Consider a core function of state and local governments: schools. Over the period 1970-2005, school spending per pupil, adjusted for inflation, doubled, while standardized achievement test scores were flat. Over roughly that same time period, public-school employment doubled per student, according to a study by researchers at the University of Washington. That is what economists call negative productivity.

But education is an industry where we measure performance backwards: We gauge school performance not by outputs, but by inputs. If quality falls, we say we didn't pay teachers enough or we need smaller class sizes or newer schools. If education had undergone the same productivity revolution that manufacturing has, we would have half as many educators, smaller school budgets, and higher graduation rates and test scores.

The same is true of almost all other government services. Mass transit spends more and more every year and yet a much smaller share of Americans use trains and buses today than in past decades. One way that private companies spur productivity is by firing ­underperforming employees and rewarding excellence. In government employment, tenure for teachers and near lifetime employment for other civil servants shields workers from this basic system of reward and punishment. It is a system that breeds mediocrity, which is what we've gotten.

Most reasonable steps to restrain public-sector employment costs are smothered by the unions. Study after study has shown that states and cities could shave 20% to 40% off the cost of many services—fire fighting, public transportation, garbage collection, administrative functions, even prison operations—through competitive contracting to private providers. But unions have blocked many of those efforts. Public employees maintain that they are underpaid relative to equally qualified private-sector workers, yet they are deathly afraid of competitive bidding for government services.

President Obama says we have to retool our economy to "win the future." The only way to do that is to grow the economy that makes things, not the sector that takes things.

Mr. Moore is senior economics writer for The Wall Street Journal editorial page. Full Article

Obama Will Make You Pay Higher Gas Prices

Obama Will Make You Pay Higher Gas Prices | The Foundry: Conservative Policy News

Morning Bell: Obama Will Make You Pay More at the Pump

Posted December 29th, 2010 at 8:45am in Energy and Environment 

“What do you say to people who are losing patience with gas prices at $3 a gallon? And how much of a political price do you think you’re paying for that, right now?” This was a question asked of the president at a press conference in August…of 2006. The president was George W. Bush. In fact, it was a question that was asked in one way or another regularly during the entire eight years of the Bush presidency, regardless of where energy prices stood at that moment.

In May 2004, The New York Times reported that congressional Democrats “were stepping up pressure on the Bush Administration to ease gasoline prices,” when prices were still under $2/gallon. In April 2005, at another press conference, a journalist stated: “Mr. President a majority of Americans disapprove of your handling of social security, gas prices…” In 2006, Senator Barbara Boxer (D-CA) exclaimed: “Since George Bush and Dick Cheney took over as president and vice president, gas prices have doubled…They are too cozy with the oil industry” after she drove one less-than-energy-efficient block to a press conference at a local Exxon station.

In 2008, then-Speaker Nancy Pelosi (D-CA) “blasted” the president for rising gas prices on his (and her) watch. In July 2008, ABC News asked the president what was his “short term advice for Americans about gas prices?” repeating a nearly identical question asked at a February 2008 press conference. In April 2008, Senate Majority Leader Harry Reid (D-NV) said gas prices were “the number one issue facing America today.”

You get the point. Yet, at the end of President Bush’s presidency, gas prices were 9% lower than when he took office (adjusted for inflation). So where have these outspoken critics been since Bush left office?

Since President Barack Obama was inaugurated, gas prices have been on the steady rise, as have home energy prices. During his tenure, he presided over arguably the worst federal response to an oil spill in our nation’s history, and has pressed legislation on Capitol Hill that would, in his own words, cause electricity prices to “skyrocket.” Yet there has been almost nothing said by the media as consumers face $3/gallon gasoline at the pump in December for the first time in U.S. history and see their home heating bills soar in the winter months.

Now this week, analysts including former president of Shell Oil, John Hofmeister, say Americans could be paying $5/gallon of gasoline by 2012. Investment banks are predicting a return to $100/barrel oil, and OPEC is refusing to raise production. All of this news would be less frightening if the White House were focusing on potential ways to lower energy prices. Instead, President Obama is admittedly fixated with raising them.

Just last week (as frigid temperatures and blizzards blasted Europe and the U.S.), the EPA announced that it will begin regulating power plants and oil refineries in an attempt to curb global warming. The new regulations will seek to cut greenhouse gas emissions by making it more expensive to turn fossil fuels into energy. And Interior Secretary Ken Salazar announced that the Bureau of Land Management would issue new rules making it harder to develop natural resources on government-owned land. These measures will not only drive up the cost of electricity and gasoline but will also make us more dependent on foreign sources of energy.

But none of these actions compare to the brazen way President Obama has unilaterally declared the U.S. oil industry dead. During the BP oil spill, Obama needlessly declared a moratorium on deepwater and shallow water drilling, since no White House advisers apparently could draw a distinction between the two. After two federal courts said the moratorium was illegal, the Obama administration instead moved to a de facto moratorium, by issuing no permits, while speeding up the permitting process for wind farms.

In October, President Obama “lifted” the moratorium, but since then has issued almost no new permits. In late November, his administration effectively issued a seven-year ban on drilling in the eastern Gulf of Mexico and across the Atlantic and Pacific coasts. We’re not even talking about ANWR anymore; these are publicly and politically accepted areas of drilling. These actions, of course, increase our reliance on foreign oil, which as OPEC points out, will only become more expensive in the near future.

Finally, this all spells disaster for the jobs market. Higher energy prices translate into higher costs for small businesses, which cause less hiring. Energy producers are moving platforms out of U.S. waters rather than have multi-million dollar assets sit idle as the president destroys an industry. And local businesses and retailers who service this industry along the coast are losing money and employees, if not entirely shutting down.

President Obama knows energy prices are skyrocketing. The liberal mantra has long been to disincentive Americans from purchasing cheap fossil fuels, by driving costs up. Because the only way consumers will choose the vastly-more-expensive wind and solar alternatives is if all prices are high, rather than wait for the market to bring alternative prices down. This is a reckless and devastating way to make a point about global warming at the expense of American families.

Nearly no questions have been asked of President Obama by the media regarding: 1) his bungled response to the oil spill; 2) his unilateral policies that are creating higher home energy prices; 3) rising gas and oil prices; or 4) the de facto moratorium on domestic oil exploration. It’s time to start asking the White House some tough questions. A two year moratorium on accountability is long enough.

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"Marxism in America" by Lt. Gen. (Ret.) W.G. Boykin

Lt. Gen. (Ret.) W.G. Boykin
Friday, September 24, 2010
In this video entitled "Marxism in America" General Jerry Boykin discusses his background and training in understanding Marxist insurgencies and how this parallels current government actions.

STORY HERE... http://fvdb.wordpress.com/2010/10/24/...