Who Says Government Can't Create Jobs?

Tyler Durden's picture

As the NFP print from two weeks ago proved (</sarcasm>), the US is gaining jobs rapidly. Of course the argument that government cannot create jobs remains (just ask the 100,000s of Wall Streeters looking for blogs to write for thanks to Dodd-Frank perhaps?). Bloomberg's outstanding Chart of the Day sums it all up nicely as the incredible rise in Financial Regulators continues. Since 2004, the number of federal employees at financial regulators will have almost doubled to 20,805 in 2013 - with the FDIC dominating the gains. What is also interesting is DoubleLine's Gundlach's recent observation (via Cato) that Federal employees earn almost twice what private employees do on average. Well done government.

2013 data



2004 Data - notice the dominant gains in the FDIC


Average pay per Federal employee is double that of private workers


Source: Bloomberg & Cato

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diogeneslaertius's picture


Gully Foyle's picture


Missed something


Working on the Chain Gang: Prison Labor in 21st Century U.S. Private prison lobbies, legislative laws, the judiciary, law enforcement, and racism work together to create a system that supplies nearly free labor for the profit of private corporations. And those profiting from this system include all the major weapons manufacturers. How did things get to this point? To answer that question, it’s important to look at the development of the prison system from its inception following the American Civil War. In reaction to the gains made by freed slaves during Reconstruction, a new system of de facto slavery was created through the quick passage of Southern state and local laws (black codes), ensnaring the new freedmen into penal labor. This was the beginning, here in America, of the contracting out of mass prison labor to individuals or corporations by state and local governments. Subsequently, in 1936 the federal government passed a law allowing for products to be made in federal prisons by a federal entity now called UNICOR. With the establishment of UNICOR, the practice of using prison labor expanded to encompass federal and state prisons throughout the nation. The modern-day use of prisoners to produce goods for private companies began in 1979 with the passage of the Prison Industries Enhancement Certification Program (PIE). The legislation was written by the American Legislative Exchange Council (ALEC) that we have heard so much about lately. Members ofALEC also wrote the proposed—and then enacted—enhanced, antidrug crime laws and general felony sentencing guidelines that followed, in conjunction with the Reagan Administration’s “War on Drugs.” Included were mandatory minimums for nonviolent drug offenders, Three Strikes laws, and Truth in Sentencing laws. In 1995 alone, ALEC’s Truth in Sentencing Act was signed into law in 25 states, thus guaranteeing a burgeoning prison population to be used as almost free labor (currently prisoners earn as little as 23 cents per hour to as much as $1.15 per hour, depending on the skill needed for the job). African Americans and Latino/Hispanic Americans have been the primary targets of profit-driven laws. By the year 2000, three-fourths of all prisoners were either black or Hispanic, according to Ken Silverstein in “U.S.: America’s Private Gulag.” This overwhelmingly unequal representation of people of color is in spite of the fact that they comprise a minority of the population (28.9 percent according to the 2010 U.S. Census) and are a significantly smaller percentage found to be in possession of drugs, compared with whites who are stopped while driving. The deliberate profiling of blacks and Latinos stopped for very minor traffic violations, which would usually be ignored, accounts for the greater percentage prosecuted and imprisoned. Michele Alexander in her book The New Jim Crow describes the institutionalization of this system, which reaches all the way to the U.S. Supreme Court. Systemic racial profiling, antidrug laws, and harsher sentences have led to a staggering number of prisoners held in U.S. prisons and jails. In fact, the U.S. is number one in the world in actual numbers of prisoners as well as percentage of population. In “Profiteers of Misery: The U.S. Private Prison Industrial Complex” (Interpress News Service,Aug 24, 2011), Kanya D’Almeida stated that “by the end of 2010, the United States was home to 25 percent of the world’s inmates, with roughly 2.4 million people behind bars and over seven million under “correctional supervision.” Concurrently, there has been a large financial reward for many of those state legislators who helped pass bills allowing state private prisons to be built, as well as private corporation participation to increase in state and federal prisons. In “Follow the Prison Money Trail —Private Prison Companies Invest Millions in Elections,” Silja J.A.Talvi reported that “supposedly, states turn to private companies to cope better with chronic overcrowding and for low-cost management. However, a closer look suggests a different rationale.” (In These Times, September 4, 2006) The reality is that it is all about the money. The use of racism, profiling, and unfair and unequal sentencing guidelines continually increases the prison population to act as an available source of the cheapest labor possible, with prisoner laborers unprotected by any health and safety regulations and few if any rights in practice that workers are supposed to have if they are employed outside the prison system.  From the start, the private prison industry has been heavily dependent on political connections and campaign contributions to secure the legislation and contracts necessary to “grow” their business. Lobbying by private prison corporations for laws favorable to a “growth industry” is ongoing, and reflects the huge profits that private prison corporations stand to gain from their investment in this expanding market. They are assisted in that growth by ALEC legislation. One of ALEC’s latest legislative endeavors is Arizona’s SB 1070, which practically makes it mandatory for police to profile brown-skinned people as possible undocumented workers. It was brought to Arizona by ALEC member state Senator Russell Pearce, and serves as a proposed model for other states as well. In an October 28, 2010 NPR report entitled, “Prison Economics Help Drive Arizona Immigration Law,” investigative correspondent Laura Sullivan describes how private prison corporations need new victims to exploit, and have found them in the form of undocumented workers. The latest news concerning the federal prison labor system, UNICOR, is actually old news—two decades old, but it was only recently uncovered and reported—and this by alternative media: Convict labor is used in the production of high-tech military weapons as well as equipment for soldiers, such as body armor. High-tech weapons parts manufacturing now involves at least 14 federal correctional facilities. The truth has been in plain sight, in the data published by UNICOR, but buried deep because it was divided into a variety of components, not labeled for specific weapons systems. Unless someone understood the technical details of what they were looking for, they wouldn’t realize the scope of high-tech weapons prison production. Another aspect of inmate labor in relation to the military is that prisoners do the cleaning and repair of weapons and equipment, which are often contaminated with highly carcinogenic depleted uranium, and are provided no health and safety protections. With these cost-cutting production methods, leading U.S. weapons contractors are making huge profits with prison labor. Details are exposed in William Hartung’s book Prophets of War (Nation Books, 2010). In his article “Why are Prisoners Being Used to Build Patriot Missiles?” Justin Rohrlich reveals just how extensive the use of prison labor by defense contractors really is: “Patriot [missile] assemblers Raytheon and Lockheed Martin aren’t the only defense contractors relying on prison help, by any means…inmates also make cable assemblies for the McDonnell Douglas/Boeing F-15, the General Dynamics/Lockheed Martin F-16, Bell/Textron’s Cobra helicopter, as well as electro-optical equipment for the BAE Systems Bradley Fighting Vehicle’s laser rangefinder.” (Minnyanville.com March 7, 2011)  Further proof of the tremendous profit being made in the prison labor production of high-tech weapons is offered by Noah Shachtman in “Prisoners Help Build Patriot Missiles” (Wired.ComDangerRoom.March 8, 2011). He points out that “the United Arab Emirates is expected to close a deal for $7 billion dollars’ worth of American arms. Nearly half of the cash will be spent on Patriot missiles which cost as much as $5.9 million apiece” and that “some of the workers manufacturing parts for those Patriot missiles are prisoners, earning as little as 23 cents an hour.” The history of an ever expanding “prison-industrial complex” is one that shows a purposeful, ALEC-driven legislative effort to have private corporations take over as many aspects of the U.S.criminal-justice system as possible, from juvenile detention to maximum security federal prisons and prisons for undocumented workers. The urgent need for prisoners to learn job skills and be rehabilitated is used as a cover, while the true purpose of the penal labor system is now well documented—it is the exploitation of inmate labor for the profit of private prison corporations and weapons manufacturers, among other industries. In sum: Through the synergy of legislation, institutionalized police profiling, and the judiciary process, the major criminal and justice institutions of the federal government, as well as those of the 50 states, establish and maintain an ever expanding public and private prison system which provides cheap slave/prisoner labor; it is circumventing federal and state wage and hours laws, avoiding health and safety regulations to protect workers, and providing no real incentive on the part of either government-run or private prisons to rehabilitate and release anyone. So this is where we are now in the United States. We have mass incarceration based on race and class, with private corporations taking over more and more of the penal justice system, from beginning to end. Corporations make billions off the use of prisoners in this 21st-century form of chain gang labor. In a country with a huge “defense” budget, there are especially big payoffs for the military weapons manufacturers. For anyone concerned about peace and justice, addressing this American gulag is vital.
flacon's picture

It's PRODUCTIVE jobs that they can't create. Keynes can have all his ditch-diggers and ditch-fillers that he wants but none of that is productive. 

Buckaroo Banzai's picture

In related news, Dodd-Frank was just renamed "The masturbating regulators full-employment act", in recognition of the giant inward-facing circle-jerk that constitutes our financial "regulatory" body.

trav7777's picture

people are assuming that these federal agencies hired people for their competence instead of for their race.  That assumption would be...unwarranted.

Cruel Aid's picture

Regulation is not production.

Does it even help production, no, it is just overhead.

BorisTheBlade's picture

Regulation for the most part is a pure waste, nevermind the monetary cost of this madness. There would be no need to regulate financial sector if prosecutors were allowed to do their job and put a thousand or two executives to where they belong - i.e. jail. Regulation is just another way to facilitate fraud, it doesn't prevent it, it creates semblance of legitimacy: 'we are regulated'. Then, when shit hits the fan regulators come out: well, financial system got too complex, let's create another agency to regulate it. Rinse, repeat.

jmc8888's picture

Somebody with a brain bigger than twitter or an ADD/HD compromised brain allows?   The real question is, who thinks they have a handle on things, that doesn't read anything more than a twitter length 'line of text'?  Who reads anything more than footnotes?  Maybe a person who wants to understand the story?


It's always funny to see people complain about length, and somehow think it is in some way justified.  It isn't.   There's no excuse for mental sloth. Somehow people, like during the days of looking the other way on wall street, continue the same idiotic practice of bullshit reasoning today.  That thing called sophistry that fucks everything up? It comes in many flavors.  One of them is discounting anything due to length.  That's not a valid reason, and if anything it makes that person dumber by removing info that a particular person could have absorbed but chose not to.  The removal of this info may or may not have any actual effect, but that isn't the point.  You take the time to learn more, it helps you out.  You never know what might be the exact knowledge that makes the difference.  This may or may not be an example of it, but we're not talking about actual content, are we.  We're talking about the arbitrary meaningless metric of 'length'. 


It's too long?  Only idiots think that somehow is a valid metric.  Thinking something is too 'long' is like thinking the BLS data is 'accurate'.  It's making a reason up to not assimilate info.


Now no one expects anyone to always read every word.  But to say in a blanket statement fashion that anything of that length not only is discounted, but to say who (as if it would be surprised that ANYONE) would read something in a post of that small of length, as too much, is asinine to the extreme. 


People understand the failure to use our heads got us here, yet they continue to try to set artiricial limits to thinking.  Monetarism has fucked our heads up good.  It is all about perception management now, and part of that is keeping things short and sweet.


I have no problem with reading a post that long.  Length doesn't matter. Content does.  People that take a different opinion are dumber for it.  Don't be one.  But also don't realize that it is a requirement to read everything, but to try to disuade people from thinking based on an asinine reason such as 'length' is an insidious action in today's world of non-thinkers.  Think about it, who on wall street actually thinks?  No monetary fool thinks, they believe the dogma that was 'taught' to them.  A herd of idiots.

Not trying to pile on you, but people need the leeway to flesh out their thought, because all we need in today's juvenile world is the 3rd grade mentality (which objection to length is) to destroy any attempt at thinking our monetary world rarely allows on anything. Very few actually take the time to think about anything in terms of our 'situation' and yet the few that do have to worry about 'length'?  WTF. 

We need more thinking, more long length posts, not less.  Anybody advocating (through such juvenile tactics) otherwise is only making the process of righting the world that much tougher.  Call it, a new 'regulation' we don't need, that doesn't actually help at all, and only hurts critical thought. Because the unsaid rule of 'length' being determinate of the content of the post is just as asinine a reason as Bernanke or any Keynesian can ever come up with.  People need to quit conuring up bullshit reasons to legitimize their own inability to come to grips with their lack of motivation.  I'm not lazy...it's the post is too long. 

Everyone can try to condense or omit the irrelevant, but that's not what the stated metric was, just generic 'length', followed by something that assumed that 'no one' reads such things.

I do.  I'm sure plenty of others do as well.  Because it's the content that matters, not length.  If I don't feel I have the time or energy to read something long, that isn't the author's fault, but mine (if any 'fault' exists at all).

Let's try not to dumb down the debate people.  But even in the above post that was of great 'length' it takes but a second to realize he just posted a link and copy and pasted the text...which means his actual post was short, i.e. a few words.  So even the gripe about the length is wrong, since there was almost no post to criticize length, just a paste of text from the link above.


JPM Hater001's picture

I think you miss the point.  We are all interested in content over convenience.  But someone with a business writing degree would have summarized the whole thing, bolded important parts and most of all...employed lists.

Respecting people time is more important than the number of words on the screen.

Matt's picture

Or at least used paragraphs. Why do people write in giant blocks of text!?

Raging Debate's picture

Do I get 30 thumbs down now for admitting I read the entire thing?

Buckaroo Banzai's picture

"In reaction to the gains made by freed slaves during Reconstruction, a new system of de facto slavery was created through the quick passage of Southern state and local laws (black codes), ensnaring the new freedmen into penal labor."

It's worth amplifying this point, as it gives the lie to anyone who claims that the War Between The States ended slavery. The "black codes" effectively enslaved a huge percentage of freed black men for years (sometimes decades) at a time. Slavery continued in the south until the end of the 19th century. Clearly nobody in the north really cared about slavery in the south; it was just a bunch of PR gloss to sell a war that was REALLY fought for an entirely different set of reasons.

NotApplicable's picture

I like to ask people, "How many slaves in the Union did Lincoln's Emancipation Proclamation set free?"


Why? He didn't have the constitutional power to do so, and was afraid to try to force it upon the states and lose even more of them to secession. It was only after the war that the slaves were emancipated by the governors of their respective states, as they were the only ones empowered to do so.

In other words, Lincoln's Emancipation was just another hollow, political gimmick, by a hollow, political lawyer.

Another great trivia question. Lincoln only argued one case for trial in his career concerning slavery, where a slave owner crossed over into Illinois (a "free" state) to have his slaves work his fields, whereupon they escaped until they were ultimately captured. The slaves claimed they were in free territory, and thus had to be granted freedom, while their owner, claimed they were his property and should be returned to him. The question? Who did Lincoln represent?

Why the slave owner, of course.

What most people fail to realize, is that "free" states weren't really free. In Illinois, for instance, not only was slavery illegal, so were black people. They weren't so much interested in the abolishment of slavery nearly as much as they were trying to retain the homogenous community. And King Lincoln, was nothing but a product of his time, a high-dollar railroad lawyer doing the bidding of monied interests.

trav7777's picture

Well, now look at Illinois since integration...lovely outcome.  Maybe Lincoln was a little smarter than you give him credit for

Joseph Jones's picture

Yeah, it's like saying the USA did not steal Mariano Vallejo's land...they constantly challenged his rights to ownership, demanding he answer in court, till finally they brought him a piece of paper with a bill for legal and court time, which he could only pay by giving up his land.  At the time of the bloodless coup in CA ("Bear Flag Rebellion") he owned most of the area near the cost from Monterey N to Sonoma County.  When it was all over a few years later he was owned virtually nothing. 

God bless democracy...not.

It drives me almost literally insane thinking about scum of the earth like Hillary and Barack telling the rest of the world how to treat people correctly.  How short a time ago was inter-racial marriage illegal?  Just a few decades ago 10k Texans stood around (no MTV then, sorry) to watch their friends/neighbors hang a person with darker skin for I don't know what, maybe looking at a white woman.  



LetThemEatRand's picture

This article is great except it is based on an entirely false premise that public employees make more than their private counterparts.  There are lies, damn lies, and statistics.  http://www.epi.org/page/-/img/010511-tablel.jpg.  Wouldn't it be nice if we could all discuss and debate fact instead of made up bullshit?

Schmuck Raker's picture

Yes, that would be nice.

Now put down those stats you have for state and local gov pay scales and address the article with Federal pay grades.

Buckaroo Banzai's picture

You smacked down that misinforming sack of shit in 9 minutes!


LetThemEatRand's picture

Do you guys ever think for yourself?  http://blogs.wsj.com/economics/2012/01/31/secondary-sources-private-vs-f...

see also:  http://www.americanprogress.org/issues/2010/10/federal_pay_myths.html

For federal workers versus private, it's approximately a wash when you look at comparable educational levels per the WSJ, and fed government workers make less according to the americanprogress article.   The ZH article above suggests that federal workers make twice as much and their private counterparts.  That is simply not true and it is based on deliberately scewed statistics.

But you won't care because the facts and your ideology are totally separate things, true?

Buckaroo Banzai's picture

What a pile of sophistry and bullshit that link is.


LetThemEatRand's picture

Don't like the facts?  Then just reject them, eh?  "Must be bullshit because the facts contradict my simplistic ideology!    The WSJ is a liberal rag!"  Think, man.

Xkwisetly Paneful's picture

Obviously not.

Not even including the legions of no show jobs, the faulty logic here is pretending that the avg government worker costs twice as much as the avg private sector worker because somehow the  government only employs the top two thirds of economically advantaged jobs.

It's ludicrous as the avg McDonalds crew could take over any state's DMV and run it significantly more cost efficiently.





Joseph Jones's picture

Dude, I was a civil servant for 25+ years.  You are so full of BS that a dead dog on Alpha Centarui could smell it.

Interesting you bring this up.  Just telling this story recently: a lady transfered from one department to the one I worked at.  Her work output was about as close to zero as you can get without being dead.  Finally they called her in.  She said, in no uncertain terms: The other department did not make me work, so why are laying all this on me that I got to do all this stuff.

Another co-worker smoked pot all day and finally after virtually no work output for over a year, the boss told him if his paper work wasn't up to date by date X, he would be "demoted" (not fired).  He dreamt up and perpetrated something (a lie from top to bottom) for a smoke screen, which lie became a federal case causing the entire department to be under rule of a federal judge for about ten years, and which ruined several innocent person's professional lives.

There are many incompetents in private industry, but its virtually nothing by comparison to civil service.

The mafia became civil service and its union representation.   

trav7777's picture

the economic collapse saw private salaries decline and federal just kept chugging upward

Gazooks's picture

Yeah, all non-incarcerated slave workers should by now be sharing the same slave wage and pension insecurity achieved after decades of relentless corporate blood sucking, job expatriation, monetary debasement, pandemic market fraud and banksterism to the exclusive benefit of the elite executive class and their cunt faced, bootlick-cock-sucker apologists.

Why should these fucking federal employees still be able to pay their mortgages, feed their families and have a pension, (or what's left of it after the executive class congressional proxies finish tapping it for unfunded liabilities)?

Pounding surviving federal workers with stigmatic efficiency is doing gods work by the idiot, asshole, traitor-trolls of the oligarchy.

Fuck y'all stupid, silly-ass bitchez.


trav7777's picture

ROTFL...dude, I am next to gov workers on a nearly daily basis.

Half of them are affirmative action hires.  They don't work because they don't have to.  They weren't hired for work, they were hired for black.

This nonsense about "comparable experience" and shit...gov workers bring ZERO to the table.  NOTHING.  They are almost uniformly INCOMPETENT.  I have met maybe ONE or TWO who were even capable of doing anything.  This spans civilian workers from DoD to DHS to DOJ.  Incompetence is the rule.  ANYONE who has ever worked in government knows this; it's no secret.

The government has not made merit a hiring criterion for 30 years.

Gazooks's picture

Yeah, you're next to'em on your knees you lying troll piece of cock-sucking shit.

NotApplicable's picture

Careful, lest you step on the toes of yet another over-worked and under-paid public servant.

Finally, I understand their identity.

LetThemEatRand's picture

If you are referring to me, I am not a government employee nor have I ever had a government job with the exception of an internship for a republican United States Congressman 20 years ago.  So suck it and stop jumping to conclusions.  I am tired of misinformation spewing forth from the Rand crowd to prove its point.  If we can debate on the merits instead of on made up bullshit, perhaps it would be possible to show you guys the error in your ways.  If you are going to spew and rely upon bullshit that you blindly accept as true, there is no point even trying.

Buckaroo Banzai's picture

The merits of the argument consists of the following facts: the federal government needs to be cut by 95% because they are a gigantic fucking parasite bleeding the productive sector of this country dry.

LetThemEatRand's picture

I totally agree that the federal government needs to be cut substantially and that it is acting like a parasite.  I'm sure we don't totally agree about where the cuts should be made, however.  Articles like the above and rabid ideologues such as yourself make a valid debate on the subject all but impossible because you insist upon relying on fictional data. 

Matt's picture

The discrepency is that you are refering to All Private versus all Public employees, whereas the article is about Federal Government employees Vs. Private sector.

Sure, municipal and State employees may make less than private sector, but Federal government employees make more. Garbage truck men = municipal. Car Czar = Federal.

As well, when you consider wages, are you counting just salary, or bonuses and benefits as well? expense accounts and other perks? pension, healthcare, etc?

Buckaroo Banzai's picture

...and KUDOS TO YOU SIR also

Matt's picture

From the first article you linked to:

Private vs. Federal Workers: The Congressional Budget Office compares the compensation of federal and private-sector workers. “Differences in wages between federal employees and similar private-sector employees in the 2005-2010 period varied widely depending on the employees’ level of education. Federal civilian workers with no more than a high school education earned about 21 percent more, on average, than similar workers in the private sector. Workers whose highest level of education was a bachelor’s degree earned roughly the same hourly wages, on average, in both the federal government and the private sector. Federal workers with a professional degree or doctorate earned about 23 percent less, on average, than their private-sector counterparts. Overall, the federal government paid 2 percent more in total wages than it would have if average wages had been comparable with those in the private sector, after accounting for certain observable characteristics of workers. The cost of providing benefits — including health insurance, retirement benefits, and paid vacation — differed more for federal and private-sector employees than wages did, but measuring benefits was also more uncertain.”

2 percent more average, less for doctorates, more for high school grads, same for bachelors degrees; however, you then add on the BENEFITS PACKAGES!

the second article, which at least directly compares accountants and engineers, does show the private sector employees get more salary; HOWEVER, it makes no mention at all of benefits, including pensions, age of retirement, etc. which are important factors to consider when looking at what someone is receiving for doing a job.

LetThemEatRand's picture

The whole point if you read the second article I cited is that what the ZH author does above is deliberately misleading.  If the fact is that federal workers make slightly more on average, then we can debate the merits of that.  It is clearly untrue that they make double as claimed in the article.   From my quick internet research, it seems they make about the same on average. I fully admit I don't have all the facts and I've never done my own study, but I don't write articles that get posted on ZH that claim to be factually true.  The ZH article above is a deliberate deception designed to reinforce a conclusion that the author has already made in his own mind.  If the conclusion is worthy of debate, there should plenty of actual facts to support it.   Apparently the ZH author couldn't find any so he relied instead on misinformation.

Matt's picture

If the reader is not paying attention, the reader could be mislead.

However, the data is accurate and it does clearly state that federal workers make twice as much as private sector workers, on average. It does not say "Federal Accountants make twice as much as private sector accountants", it just lumps together all federal workers vs all private sector workers, and calculates their average. While disengenous, I wouldn't say the article is deceptive.

It would be nice to see a comparison like that first article you provided, except including value of benefits.

trav7777's picture

they don't also factor in the total incompetence of typical federal workers.

Between facebook and fantasy sports, they do precious little else.  Blasting stereos in cubicals is another winner.

Federal workers are overpaid by a factor of 5x, at least.

EvlTheCat's picture

For some reason you put the 'i' in front of your 'sh' and left off the 't'?  That happens to me a lot when I start drinking around lunch.

Burr&#039;s 2nd Shot's picture

QCCPs will be hiring.