The most pervasive myth of the welfare state is the altruism of the public sector. In this mythology, the private sector is run by a bunch of greedy businessmen who get rich by making money off people's misery. While the public sector is run by altruists who want nothing except to help those left behind by the private sector. Capitalists meet the Anti-Capitalists.
For the private sector to succeed, it needs a prosperous customer base. The public sector doesn't. It just needs a collective 'Them' to pay the bills. The public sector makes its money from failure. Human suffering creates more demand for its services. The more people are out of work, can't pay their bills and need help-- the more the public sector grows.
The PayDay loan industry and Fannie Mae both preyed on minorities and the poor. But the latter's business model was completely unsustainable and its greed was completely irresponsible. Yet all this was concealed under the veneer of altruism.
The public sector altruism myth is just that, a myth. It's a destructive myth because of the basic conflict between its inner and outer goals.
The outer goal of a car company might be to sell more cars. Its inner goal is to sell enough cars that it can hire more workers and its executives can go to the Bahamas next month. There's no major conflict between these two goals. Not unless everyone there decides to make bad cars and misrepresent them, and then use the money to expand the assembly line and go to the Bahamas anyway. There are businesses that work that way, but they don't have much of a future. Sell people bad cars and you'll lose customers. And then the only way you can stay in business is if the public sector begins subsidizing your company. A bad company is either a rolling scam that depends on luring in gullible new customers or a public sector charity case.
The outer goal of a welfare program might be to help its clients. But its inner goal is to get more funding so as to add jobs and so whoever is at the top can go to the Bahamas next month for a conference on global poverty. If a client stops needing its services, then the program loses funding. The welfare state needs more 'clients' signing up for more services so that they can get more funding. The best clients are the neediest. A client who is upwardly mobile is a bad risk, because losing their name on the rolls means a net loss for the program which endangers its funding. People in a state of failure make the best clients. Welfare programs maintain outer goals of helping their clients be more independent, these conflict with their inner goals, which is to maintain their client lists.
The myth of public sector altruism rarely takes stock of the conflict between inner and outer goals. Even when teachers' and nurses' unions hold angry protests over benefits during an economic depression, this conflict rarely gets addressed. The myth that they are public servants who want nothing more than what's best for their charges lives on. But like everyone else they are human beings. Their interests are their own. Some are idealistic enough to make sacrifices or to want what is best for the people under their care, even when it's to their own detriment. But this is not the case for the majority in any field. Moments of heroism aside.
The public sector's inner goal is to bring in more funding and create more jobs. Not out of any altruistic impulse, but because it expands the power and wealth of its own administrators and bosses, whether in an agency or a union. A bigger agency has more sway in funding battles. Its incestuous relationships with unions and clients means that it is better positioned to demand more money and hold off any cuts. The agencies and unions boast their own private armies which bring in money. The money is given by politicians in exchange for support and used as currency to expand the ranks of that army. The army is there to support the politicians during elections. And to combat any attempts to cut the money coming into its coffers.
The Public Sector has become an army of occupation. The battles in Wisconsin, the crisis in California and the ObamaCare clashes with SEIU goons are a wake up call to what that army really is. It's not armed, but it doesn't need to be. It's the vanguard of an alternative economy that depends on extracting as much public money as possible. And that alternative economy is in a basic conflict with the people paying for it. When the economy is good, the army can skim off the cream without anyone noticing. But in a bad economy, a conflict explodes over limited resources.
The Postal Service doesn't exist to deliver mail. 80 percent of its budget goes to the salaries and benefits of its 500,000+ union members. It is a union employment plan subsidized by the public through a stream of pension and benefits bailouts. Its business model is based on delivering junk mail. Not on providing useful public services. The Postal Service does not exist so you can buy stamps and mail letters. It exists so some of the country's largest unions can retire at 55.
Public schools don't exist to teach kids, they exist to create jobs for teacher's unions, positions for administrators, contractors for school construction programs, and a thousand ways to get federal, state and local funding. That's why we spend more money on education than most of the world, with less to show for it. The spending is not pupil driven. The children are mostly irrelevant except as mannequins for new educational gimmicks.
Keeping students below average turns them into a 'profit center' for new solutions. If we actually had a successful education system, a huge chunk of the consultants and other feeder fish would be out of business. The educational bureaucracy does not profit from teaching kids. It profits from kids who are not learning. Who need special education, more programs and a crisis mode of new approaches. "Are our kids learning?" No?" "That's because we aren't spending enough money." "Why do we pay our schoolteachers less than NBA players?" "Why does the military get more money than the educational bureaucracy?"
It's all the same down the line. Hospitals don't add nurses to treat patients. They add nurses because union regulations require them to. Mortgages are approved that can't be paid off, because that way the agency can boast how many new minority home buyers it has created. And when foreclosure comes, then another agency takes over providing for them. Job training is given for jobs that don't exist. Then job creation programs for those jobs are funded-- and still the jobs don't exist. And then the cycle begins all over again. Nothing in this cynical trillion dollar farce has anything to do with helping people. If any people get helped, it's an unintentional side effect of a system that exists to feed on human misery..
The public sector thrives on anxiety. It feeds on failure. The public sector is in freefall, but the private sector is adding jobs like crazy.
The crazy quilt marriage of political machines, radical unions and liberal sociologists has created an unstoppable monster intent on devouring everything. Some inside the beast understand that this is the goal. They want private enterprise to vanish and the state to be the provider of all services. Most however don't realize this. They have just been taught to protect their privileges.
The public sector is ruthlessly competitive in its own way. Not on merit, but on position. Maintaining your position in the system is crucial. Doing your job well is absolutely meaningless. In some cases it's even dangerous. Staying in line is what counts. Having the right background and the right opinions. Inertia through seniority is the biggest signifier of success. And inter-departmental and inter-agency rivalries are routine. It's a Darwinian economic ecosystem and everyone is trying to grab funding for your programs. Exploiting a crisis, knowing the right political buzzwords and being able to summon a mob of clients or union members to agitate for your program are the keys to success.
Such a system does not encourage the long view. Nothing exists except your program, your crisis and your department. The ability to recite "Without funding for ____________ we all are doomed" on cue is the only thing that matters. Your real assets are your benefits. To protect them, you have to protect your programs. And lash out at anything that threatens funding for them, whether it's charter schools or the taxpayers running out of money. Reform is dangerous. Protect the status quo at all costs. Violent tunnel vision is the only kind the system breeds. The few visionaries are left wing radicals who think that everything would work if only they had complete control of the economy. And to make that happen, they have to destroy the conventional economy first.
Here's where we are now. Trapped funding the ever-expanding fiefdoms of the public sector, its office warrens, its ghettos and housing projects, its consultations and studies and research projects, its tidal flood of gimmicks and appropriations.
All the money being spent vanishes into the recesses of those fiefdoms. It doesn't remotely provide value per dollar spent, because most of that dollar doesn't go to providing services. It goes to the vast infrastructure of employees, office buildings, consultants and overseers of the entire mess. The services are a side project of a vast bureaucracy which is concerned with its own power and prestige.
The welfare state can't solve any of the problems that those liberal sociologists thought it could. But the political machines who authorized the spending never wanted the problems solved. It wanted them perpetuated. It wanted plantation voters with no hopes or dreams beyond the next state lottery ticket, who would vote for them to protect their benefits. And that's what they got. The unions can't see beyond their next paycheck. And don't want to. The money has to keep coming because it's theirs. The details don't matter. They often despise the members of the public they interact with. And why shouldn't they. Most of the people they interact with don't want to be where they are. It's a mutually hostile relationship. And that mutually hostile relationship is the paradigm for the larger one they have with the taxpayer.
As the economy declines and the public sector grows, an inevitable showdown is coming. A public sector that grows faster than the private sector is unsustainable. But that just means the public sector will start tossing their clients overboard faster. Classroom sizes will double along with education spending. Welfare rolls will be cut, and more workers will be hired to oversee them. Doctors will get paid less and patients will wait longer to see doctors, but there will be more nurses hired on. Death panels will come disguised in patient friendly language. There will be less of everything, but more public sector employees for all of it.
These measures will make the system seem more sustainable. But all they will really do is maintain the position of socialism's occupying army. And as the public sector begins cannibalizing the people it claims to be serving, we will have a choice between continuing down the same disastrous road as Europe or taking a stand to reclaim the economy from the public sector.