The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data. Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months – and that's before overtime pay and bonuses are counted. Federal workers are enjoying an extraordinary boom time – in pay and hiring – during a recession that has cost 7.3 million jobs in the private sector. The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available. When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000. The trend to six-figure salaries is occurring throughout the federal government, in agencies big and small, high- tech and low-tech. The primary cause: substantial pay raises and new salary rules. "There's no way to justify this to the American people. It's ridiculous," says Rep. Jason Chaffetz, R-Utah, a first- term lawmaker who is on the House's federal workforce subcommittee. Jessica Klement, government affairs director for the Federal Managers Association, says the federal workforce is highly paid because the government employs skilled people such as scientists, physicians and lawyers. She says federal employees make 26% less than private workers for comparable jobs. – USA Today

Dominant Social Theme: Maybe they're deserving?

Free-Market Analysis: This article points out what is just part of a larger issue that both America and Europe have to face. In previous times, the ruling elite was fairly small in number, though highly monied – and fairly self-evident through revelations of royalty, etc. Now the elite speaks through proxies, and this is inevitably a clumsy system with manifold distortions. The distortions have to do with the determination of those who stand behind the throne to continue to drive forward what we would consider to be a powerful dominant social theme – that democratic socialism (regulatory democracy) is an appropriate state methodology.

It is not. Democratic socialism as it appears in the West today is basically the celebration of a technocratic elite, well-educated and concerned, that is supposed to bring its skill set to government and empower the political process in much the same way as it has the private sector. But even leaving aside the dubious achievements of the plethora of lawyers and accountants in the private sector, the idea that the public sector can WORK like the private sector is a dubious one indeed.

The public sector has no competition. If someone is not doing his or her "job" in the public sector, there are few ways of observing that it is not being done and few ways of determining whether it matters anyway. What exactly does the public sector produce? And granting it produces something, how does it maintain any level of quality control over this production as, again, there is no competition, and therefore no market feedback. Absent private-market price discovery it seems to us that it is almost impossible to determine the value of whatever IS being produced in the public sector.

From our humble point of view the whole idea of the public sector – and public service in general – is just one more dominant social theme. The power elite seeks to encourage large governing bodies behind which it can hide. The more powerful the government, the more easily accessible the levers of power and wealth are for those who know how to pull them and have the wherewithal to do so. The continual empowerment of the public sector is part and parcel of this process. The trouble for the power elite, in our estimation, is that trends do not grow to the sky. Correctives occur.

Conclusion: In both America and Europe it seems to us a fairly dangerous game is being played. In Europe, there is a good deal of discontent over the "anti-democratic" way that Brussels operates with all its attendant corruption. In America, an Investors Business Daily poll recently found that there are more independent voters than there are Republicans or Democrats. As the recession grinds on – and the public sector is continually empowered as it must be during such fiat-money downturns – we think that dissatisfaction will grow as well. This full story has not yet been told – and the Internet, as we continually predict, will cast a merciless eye on the unraveling.

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