The End Of An Era

I see that the Bay Area is again suffering from a BART and transit strike. For some reason that I fail to comprehend, the unions are allowed to hold to ransom the transit facilities that the taxpayers purchased for their use. It is no accident that government employees earn, on a national average, about twice what private sector workers make. I’m not even going into what California government employees are paid – that is one of the reasons I left – I object to being ripped off by smirking bureaucrats.

Somewhere along the line, government lost the idea of service as politicians and employees became addicted to using the power to extract money by force and intimidation for selfish purposes. Government became an aristocracy – one without the traditional ideas of noblesse oblige – and became willing to do anything necessary to maintain the perks and privileges due to the aristocrats. Especially in the US, Islamic terrorism has provided a wonderful excuse for all kinds of restrictive and intrusive measures so that we now live in a tightly monitored society with only the illusion of freedom while the political class and its clients, its financiers and employees, live the life of Riley. But the disease of government over-reach, over-commitment and over-spending is worldwide. It is a fatal disease because it consumes its own substance, the productive economies. Even now, its end is only being postponed by extreme and unsustainable measures such as printing money to support the spending needs of government.

While it is easy to see that the post-WWII social democracy movement has failed, it is not clear what happens next, because the strains from the collapse will be so extreme. Even with the amazing improvements in global productivity, it is clear that all the major economies face a wall where a shrinking workforce is expected to fund an army of non-productive people – retirees, government employees, as well as the unemployed – willing and not – and the unemployable. To make matters worse, the fiscal and monetary efforts to sustain consumption have short-changed savings and investment, crippling the productivity potential of the economy. It is not a matter of money, per se, it is simply a matter of human and material resources that don’t and won’t exist and can’t be “printed” into existence.

Somehow, there has to be a major adjustment in living standards combined with improvements in the utilization of what resources there are by shifting them into productive use. How is this going to happen? Not clear to me, that’s for sure.

Perhaps one of the saddest symptoms is the fact that Hillary Clinton is, so far at least, the leading candidate to succeed Barack Obama. There is no hope of change.

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