Californiomics

I was listening to the news on the radio this morning when my brain got into first gear. The announcer on the radio was discussing how some judge had given his approval to Gov. Schwarzenegger's decision to give state workers two days unpaid leave each month to ease the California's financial problems. Eureka! I exclaimed to the man in the car next to me. I think he did not hear me for he drove away heading south on the Pacific Coast Highway. You see, the economy of California will benefit from less money being spent on state workers. The state will save money and everyone except the state workers who get furloughed will be better off economically. I know that you already know this. The poignancy of this is illuminated by asking the comparative question: How is the reduction in hours for government workers different from the reduction in hours for private sector workers? Private workers, insofar as they are productive, add to the wealth of everyone. Government workers create very little wealth overall. Many actually do not create any wealth at all, but only consume the wealth of others.

This leads us to an analysis of wealth. What do I mean by the production and consumption of wealth? The production of wealth is the creation of goods and services which continue or enhance our standard of living. Bread, meat, houses, cars, shoes, movies, novels, medicine, needed professional services from doctors, lawyers, police and courts, et cetera. These are wealth and things that preserve and protect persons and wealth. Production and services must be useful and wanted to be wealth. This is why the more people we have working efficiently producing things that people really need the wealthier we all are. This is why the more government workers we have shuffling papers and telling people how they should live the poorer we all are. Productive private workers as a rule create more than they consume. Government workers, on the other hand, consume more than they create. Ergo, if the government workers produced more than they consumed then California would be poorer for employing them less as would a private enterprise would make less profit for laying off its most productive employees. When a private enterprise trims the fat it lays off its least productive employees, at least in theory. If California will be better off for having some state workers take two days each month off without pay, imagine how much better off we will be if they take four days off each month instead. In fact, we should move to trim the fat even more and encourage the government workers to move from non-productive government jobs to productive private sector jobs providing goods and services that are useful, desired, and actually needed. Ditto for Washington. Now you can take away Paul Krugman's Nobel prize and give it to me instead. Yes, Mr. Krugman the Earth is in fact round; and no, governments cannot spend us into prosperity.