Stop the insanity

Back in September of last year, Forbes ranked Wisconsin as the third worst state for business. Given that, yesterday's news that Harley Davidson may consider leaving the state as it searches to lower manufacturing costs by $54 million should come as no surprise.

What is more surprising – and upsetting – is the fact that as of February, Wisconsin now has more government jobs than manufacturing jobs. Year-over-year government employment has increased a half percent (due to increases at the local government level), while manufacturing employment has decreased 6%. (State government employment dropped 4%).

Of course shrinkage in employment in manufacturing, or any private sector industry, is what one would expect during a recession like the one we are experiencing. What puzzles me is the growth of government over that same time period. It appears that in good times, government grows, and in bad times, government still grows – only more slowly.

The reason this is important is because all government wages are paid for out of private sector wages, via taxation. While government employment grew by 1800 jobs over the past year in Wisconsin, private sector jobs fell by 75,000. Thus, we have fewer private sector workers supporting more government workers. And people working and earning in the private sector are the only resource that government has. Because of that, this is not sustainable.

Exacerbating this is the fact that government jobs are more costly than private sector jobs, mainly due to unionization. While the unionization rate in the private sector has fallen from 30% in 1965 to just 7% today, 39% of state and local government workers are currently unionized. The high wages and generous benefits packages that public sector unions negotiate for their members are paid for by taxpayers.

Now, I'm all for workers lobbying and fighting for the best pay they can get in a competitive environment. But have you ever stopped to think about why the unionization rate is so much lower in the private sector than in the public sector? The simple answer is "competition." Private sector businesses are subject to competition, and don't have the luxury of forcibly taking more money from their customer base in order to fund unsustainable cost structures. In contrast, government has no competition. Which DMV are you going to choose? That's right – the only one there is.

It is important to remember that every dollar that is taken out of the private sector in order to fund government leaves one less dollar in the private sector to invest in creating new jobs and increased wealth. No matter how important or vital some of the things government does for us (police protection, transportation infrastructure, etc.), government does not create wealth. But government can help create a positive environment for the private sector to do just that.

Would that our State Legislature was actually doing that, I would not be writing this right now. Unfortunately that is not the case. Wisconsin is projected to have a $2 billion budget deficit next year. Given the past, we know that the likely response of our current state and local legislators will be to increase the size of government, and add more regulations and taxes making it harder for Wisconsin businesses to grow and expand, and harder for hard-working taxpayers to keep their own money.

Don't get me wrong – I am not for coddling businesses. I am not for giving businesses special deals to "buy them off" and induce them to stay in our state. What I am for is creating an environment that allows businesses to operate free of the costly regulations and taxes that drive up the cost of doing business and hiring workers.

We simply can't continue milking taxpayers and businesses in order to fund an ever growing government. This year the federal budget deficit alone is projected to be more than the entire federal budget was in just 1995. This isn't just a state or local problem – it is a national problem. The way out of the woods doesn't rest with Democrats. It doesn't rest with Republicans. And it certainly doesn't rest with career politicians of any political persuasion. It is going to require electing common sense citizens with a strong adherence to the principles of limited government, who are willing to make the necessary difficult choices.

Until we do that, we'll simply continue reaffirming the oft-stated definition of "insanity": Doing the same thing over and over and expecting different results.

Let's stop the insanity.