Whom Do You Trust?

blackwaterLately we have been hearing how awful government is. Not governments like Iran or North Korea, not Communists or military dictatorships, but our own government.

I find this ironic, since I am now teaching a course about the 1960s, when people who criticized our government were told “love it or leave it.” Now the defenders of government are told they are un-American. It’s so confusing when political groups change their slogans into the opposite, and act like nothing has happened.

Those who want government to go away, or at least get a lot smaller, seem to have two ideas about how to shrink government: Cut out the “waste” and let private companies take over many of its functions. Their assumption is that the private sector can do these jobs better and cheaper. Is that true?

Where is the waste in government spending? One place that many people focus on is how much government employees get paid and other perks of their jobs. Here in Illinois, the cost of the Governor’s Mansion in Springfield, Illinois, has become a campaign issue, since that house is rarely used. The pensions that government employees earn are condemned, because paying them decades into the future might require even higher taxes.

Why would anyone believe that private companies would save us money on salaries? No government official, including the president, receives even the average salary of the bankers on Wall Street, the executives of the oil companies, or the directors of any of the large corporations who dominate our economy. The new CEO of GM will make $9 million. No big deal, because that is less than the average pay of CEOs in the corporations in the S&P 500. Then there are the private jets, meetings at Caribbean resorts, company cars and country club memberships that are standard fare for corporate leaders.

Why are the salaries of government employees excessive, but not those of corporate employees? Would “big government” critics be satisfied when public services are in the hands of multimillionaires?

OK, if government services were privatized, we would certainly pay top executives much more than we are paying now. How about lower-level employees? As a nation, we could save millions, maybe billions, if we transformed well-compensated firefighters, police officers, teachers and thousands of other government employees into private wage earners. The consequences are the minimum-wage firefighter coming to put out a fire at your house, your children in the hands of minimum-wage teachers, the minimum-wage clerk in a government office responding to your problem.

Public services would be delivered by Walmart-style “associates,” not quite full-time employees with no benefits.

The savings would be enormous, because there are around 20 million government employees. Imagine the reduction in tax rates if we converted all those middle-class salaries with good healthcare benefits to minimum wage salaries with minimal benefits. Of course, the national economy would suffer, as housing, consumer goods, construction, and air travel would decline, because so many families with money to spend would be converted into low-income families just scraping by. Millions of jobs would be lost as our economy came to resemble a third-world nation, with a small number of wealthy people and a tiny middle class. But think of the tax benefits.

Here’s the clincher: There would be so much less corruption! All those worries about government dishonesty would be banished, as we turn over everything to the private sector, which has earned a reputation, especially recently, as paragons of economic virtue. It would be like replacing that corrupt, inefficient, and dishonorable waste of your tax dollars, the U.S. Army, with the honest and capable work of Xe Services, formerly Blackwater Worldwide.

BP could oversee oil exploration, Morgan Stanley would run the Federal Reserve, and the former executives of Enron, now thankfully available for public service, could create a national energy policy.

Although I can’t imagine that anything could go wrong with this plan, just in case, we could rely on Fox News to organize government communications and keep us well-informed.

Steve Hockstadt

Steve Hochstadt is professor of history at Illinois College in Jacksonville, Illinois, and author of Sources of the Holocaust (Palgrave, 2004) and Shanghai-Geschichten: Die jüdische Flucht nach China (Berlin: Hentrich und Hentrich, 2007). Republished with permission from Taking Back Our Lives.


  1. Moravecglobal says

    UC Berkeley: what do you call a Cal senior management that finds $3,000,000 money for consultants but can’t find money for student sports? Speak your mind to your representatives in Sacramento! UC Berkeley’s recent elimination of popular sports programs highlighted endemic problems in the university’s management. Chancellor Robert Birgeneau’s eight-year fiscal track record is dismal indeed. He would like to blame the politicians in Sacramento, since they stopped giving him every dollar he has asked for, and the state legislators do share some responsibility for the financial crisis. But not in the sense he means.

    A competent chancellor would have been on top of identifying inefficiencies in the system and then crafting a plan to fix them. Compentent oversight by the Board of Regents and the legislature would have required him to provide data on problems and on what steps he was taking to solve them. Instead, every year Birgeneau would request a budget increase, the regents would agree to it, and the legislature would provide. The hard questions were avoided by all concerned, and the problems just piled up….until there was no money left.

    It’s not that Birgeneau was unaware that there were, in fact, waste and inefficiencies in the system. Faculty and staff have raised issues with senior management, but when they failed to see relevant action taken, they stopped. Finally, Birgeneau engaged some expensive ($3 million) consultants, Bain & Company, to tell him what he should have been able to find out from the bright, engaged people in his own organization.

    From time to time, a whistleblower would bring some glaring problem to light, but the chancellor’s response was to dig in and defend rather than listen and act. Since UC has been exempted from most whistleblower lawsuits, there are ultimately no negative consequences for maintaining inefficiencies.

    In short, there is plenty of blame to go around. But you never want a serious crisis to go to waste. An opportunity now exists for the UC president, Board of Regents, and California legislators to jolt UC Berkeley back to life, applying some simple check-and-balance management principles. Increasing the budget is not enough; transforming senior management is necessary. The faculty, students, staff, academic senate, Cal. alumni, and taxpayers await the transformation.

  2. Joshua says

    Ok another great straw man argument ( Shame on you ,know it all Academic!) but you do make a few valid points inbetween misrepresenting the oppositions argument.The Opposition wants to limit Government to critical services, and Have the lowest level of Government to handle problems. Starting with the Individual, then Local, Then State , Then and only when there is no other way , have the Federal Government intercede and NOT deal with things that are the Individual’s responsibility.

    The “control” of Private business, if they are poorly managed , they go bankrupt and out of business. What’s the “control” on Government? More Government? the Voter, who incedently wants to vote themselves a pony because Bill Gates has one, and why not , It’s somebody elses money.

    How can civilian Public servants get better pay and benefit packages than the Tax Payer? How does that make sense or sustainable? How can they retire with solid benifits while the Tax Payer is going to still be working? Even better when they go back to work for tha same Government as a “Consultant” after retirement and be under 40 years old.

    I still can’t beleive that this Guy is a proffessor of History. Do you teach in this sort of format? Or do you make valid arguments and let the students decide what is truth? Or do you bully them with grades until they repeat your myopic views with feeling?

    You are a propagandist and an awfull one at that (I’ll add an AD HOM) and you look like a cross between John Brown and the Uni-bomber. And people can’t figure out why our edjucation system is going down the tubes.sheesh.

    • Sylvia Moore says


      Would you be so kind as to give us a list of programs that you want cut and/or eliminated. Or what is your family willing to give up to save money? What does your so-called “limited government” look like? Just how far do you want to go? Then, when you’re done, I’d like you to personally go tell the people whose benefits you’d like to axe what you’d do to them. In their faces. And explain to them why. Be a man and go to the homeless shelters, the schools, the senior citizens homes, the health clinics, the unemployment lines and tell them all about your plan to cut them off and “help” them take “personal responsibility” for their lives. Oh, and let us know how that went.

      I would also like to know what government workers you believe make SOOO much more money than the “taxpayer.” I’d like to see a list please, and the salaries. And then, go to those government agencies, and tell the employees there how you’d like to cut them out too.

      Instead of griping about what the people who provide those “critical services” to you make and the retirement benefits they get, why don’t you ask why your private employer doesn’t give you the same salary and benefits that are just as good? It’s probably because the company CEO is taking more and more out of company revenues than he/she deserves and isn’t re-investing in said company. The government isn’t your problem; it’s probably your boss who won’t give you that raise.

  3. Sylvia Moore says

    Excellent article! Your argument puts the consequences of libertarianism run amok in clear terms.

    However, I would add that this three to four-decade long opposition to government really boils down to racism. Many conservative white people won’t admit this because overt racism just isn’t fashionable. But it’s THE reason why the United States doesn’t have as good a social safety net as Europe, Japan and other industrialized countries.

    The more diverse America has become, the less interest there is in preserving the common good. It’s a deep, hidden feeling of “I don’t want to help THEM! I don’t want my tax money going to THEM!” – “them” being people who don’t look like “me.” (i.e. black and brown folks) It’s simply ethnic tribalism.

    You mentioned that in the 1960s, people had a healthy respect for the government. It was at that exact time that the Civil Rights movement culminated in laws giving people of color political power for the first time. And with that, economic power would follow. That meant working class whites who were largely enjoying the benefits of New Deal government programs they loved would now have to share more of the pie. Suddenly, these programs didn’t seem so cool anymore. Nixon and the Republican Party took advantage of this burgeoning racial resentment and rode that all the way to the White House and political ascendancy throughout the 70s, 80s, 90s and today.

    It’s frustrating, infuriating and sad, but it seems that many white working class people who vote Republican and join the destructive Tea Party would rather have nothing and see the country fall apart than learn to live with and share prosperity with people who look different than themselves. And these white working class people then are easily exploited by the corporate interests who use their discomfort of others to then pick their pockets. Their racial discomfort has contributed to the disintegration of the economy, and they’re completely oblivious to that fact.

    Everyone is going to have to come to grips with this reality and acknowledge that racial resentment is the driving force behind America’s stubborn resistance to real progressive solutions to our problems. Once we accept this and talk about race and racism a lot more, and its corrosive effect on our society, the more effective progressives can be in coming up with strategies to break through this resistance.

    • Steve Hochstadt says

      Dear Sylvia,

      I agree with you that race plays a crucial role in the conservative “free market” ideology. But I would not go so far as to say that it all boils down to racism. The anti-government ideology has a history as old as the USA, and it became powerful when government began to interfere seriously in the market during the Progressive Era. The free marketeers appear in countries without our racist history.

      I don’t think it is possible to disentangle racism from other elements of conservative ideology, such as hatred for unions. I just wouldn’t say there is one that is the basis for all the others.

      • Sylvia Moore says

        Hi Steve,

        Yes, what you say is true about anti-government ideology being as old as the Republic. However, I don’t think those anti-government elites held as much sway over the white working and middle classes before the Civil Rights movement gains, and, I might add, before the massive influx of immigrants from Mexico and Central America in the past few decades.

        The elites always hated unions, but before the ’60s, there was rampant racism within the labor movement, and minorities were being kept out of unions – and kept away from the benefits of being in a union.

        I agree with you that the conservative elites themselves aren’t completely motivated by racism. They’re basically motivated by greed. I was trying to make the point that the elites are able today to use deeply rooted feelings of racial resentment and xenophobia among the white working and middle classes to divide this group from other working and middle class people. Those feelings, I believe, are what’s keeping many white working class and middle class people firmly wedded to conservatism, while at the same time defending the very government programs they enjoy, but refusing to extend the same benefits to others. Hence, the elites’ ability to use coded language calling Obama a “secret Muslim,” and the tea partiers readily accept this. If these people didn’t have these feelings in the first place, I don’t think they would be so open to accepting the elites’ entreaties to constantly cut taxes, especially on the rich.

        The fact is, the assault on and the erosion of America’s safety net programs, the wholesale embrace of the anti-government meme by the majority of society, began exactly at the point 40 years ago when minorities made huge political gains.

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