Highway Robbery
Government vs. the People


Iain Murray, vice president of strategy at the Competitive Enterprise Institute, is author of the new book Stealing You Blind: How Government Fat Cats Are Getting Rich Off of You. He talks to National Review Online’s Kathryn Jean Lopez.

KATHRYN JEAN LOPEZ: “Government FAT CATS” “stealing you blind”? Come on. How is that new and how does that help anyone?

IAIN MURRAY: The problem of public-sector bloat has largely flown under the radar. Most people still seem to think that public-sector employees earn less than their private-sector counterparts. That’s not true, even before you take benefits and hours worked into consideration. I wanted to wake people up to the problem, and the title of the book certainly makes them pay attention. Yes, the book is a polemic, but this is a war that has to be fought.

LOPEZ: Isn’t it insultingly and unconstructively simplistic to make America out to be government vs. “the People”? Aren’t there people in government, too, some of whom actually have “best interests” and even good stewardship in mind?

MURRAY:  As I say right up front in the preface to Stealing You Blind, this is about the system, not the people (with a few egregious exceptions). Most government workers are ordinary, decent Americans who are just looking for the best employment deal for themselves and their families. They’ve made a perfectly rational decision in their choice of career. They’re also often intelligent and well-educated, as Paul Krugman keeps reminding us. Yet they’re not employed in wealth creation, but in wealth abstraction. The system actually represents a massive, national misallocation of resources.

LOPEZ: Isn’t “bureaucrat” just a dirty word to conservatives? And don’t we have to get beyond everyone playing on their separate sides of the playground?

MURRAY:  Every society has room for bureaucrats — the town clerk (along with his colleagues) was always a respected position among conservatives because citizens could see the benefits he and his office provided to them through the orderly administration of public affairs. The trouble is that the government sector has grown to absorb so much of the economy that it is now a significant obstacle to progress and innovation. This shouldn’t be a right-versus-left battle — self-described “progressives” should be just as angry about this as libertarians are. Oppression and exploitation by government are things both conservatives and liberals have historically worried about.

LOPEZ: What is the scandal of the public-employee sector?

MURRAY: It’s that the balance between risk and reward has been lost. The previous social contract — to use a liberal phrase — was that government workers received less compensation in return for less risk, as well as greater job security and a guaranteed pension. Today, public-sector workers make more than their direct counterparts in the private sector, get better benefits, work fewer hours, and retain their historic job security as well as pension schemes that are so generous they are massively underfunded. There’s no better example of this than the prison doctor in California who has been judged unfit to be around patients — or even prisoners — but can’t be fired. So Californians are paying him over $200,000 a year to review paperwork. Reward and risk have to be properly balanced in government, just as in other areas of society.

LOPEZ: Would you fix pensions first?

MURRAY: The unfunded-pensions liability is a problem as big in scale for states and local governments as the entitlements crisis is for the federal government. We have to address it, and reforms such as those in Wisconsin have already proved beneficial. For example, one Badger State school district was able to turn a projected deficit of $400,000 into a projected surplus of $2 million thanks to the reforms — allowing it to reduce class sizes, which is what the teachers’ union wanted. So fixing pensions now can provide real, immediate benefits.

LOPEZ: Isn’t that a hard case to make when people we like, such as teachers, are public employees?

MURRAY: As we’ve just seen, the current system actually works against them because it misallocates resources so badly. Another example is the importance of seniority in education. In Stealing You Blind, I relate the story of an underperforming school district in Los Angeles, where a budget crisis meant that the district had to let go its best teachers. Without seniority rules, it could have let go of fewer teachers, mostly those who were burnt out. Indeed, with an end to these rules, districts could pay enthusiastic junior teachers — who are underpaid — much more. That would be a real boon to young teachers, and to our children.