Equilibrium

Amidst all the hullabaloo about chopping government salaries, it looks to me like it’s an impossible thing to do. Government workers and their families simply comprise too much of the electorate for anything to change; the tipping point was long ago reached.

Making a principled, even eloquent, appeal to some vague and fuzzy notion of “free markets” isn’t going to inspire the masses to shed the habit of big government, in the Commonwealth or anywhere else in the world.

So worry not, government employees, your checks will probably be safe until the financial fruit has been squeezed so much that the checks actually start bouncing. Few want to leave any juice in the peel, since it will merely be slurped up by somebody else. Get as much as you can as soon as you can; that’s always the rational strategy in these cases.

If it’s any consolation to taxpayers, the rank and file government employees in the Commonwealth are actually a very pleasant lot. I don’t begrudge them earning a good living. Everybody has to work somewhere, after all.

But it would be refreshing, just for the sake of aesthetics, if the Commonwealth would shed this charade about being anything but a patronage economy. It’s getting…well…silly.

In fact, consider the following, which was pointed out to me by an alert reader: What percentage of “new business” ideas or “international investor” stories that you hear about are either sourced from, or somehow linked to, the local government? I’d say just about all of them, regardless of which administration is on Capitol Hill.

At the very least, every business scheme I ever read about mentions meetings with government officials, etc., etc. Our most recent stories on this note were the Air Saipan intrigue and the ever-present Pagan mining caper. Yawn. We’ve seen it all before, in some form or another.

So there is no “crisis” here, it’s merely steady-state equilibrium. Water seeks its own level. So do economies. The Commonwealth has found its level. What’s wrong with that? As an added bonus, Uncle Sam’s generosity will keep everyone from starving, will keep the schools from closing down, will keep things from being overtly dismantled in the streets and carted off to the shadows. It remains to be seen if Uncle Sam will keep the lights and aircon on for us, but I suspect he will, if necessary; maybe CUC’s inevitable fall will be a blessing in disguise, a catalyst for a very juicy subsidy.

The basic index of “livability” for the Commonwealth is how well the government employees are living. If they are doing tolerably well, the electorate will be sufficiently sated. All this talk about business and the private sector is just peripheral static, uttered out of mere habit.

I’m not criticizing the local government at all. The government is merely a reflection of the underlying society. It is what it is, because people want what they want, and choose what they choose. I’ve got no problem with that. How could I?

In fact, the current administration has done an admirable thing by putting the issue of government payroll on the table, and they surely are more adept than I at gauging the political temperament of the community. I certainly agree with the premise that a smaller government will make for a more burdened private sector and, consequently, a larger economy in the long run.

But I don’t think most people think in these terms. The notion of a larger economy at some future point is an abstraction. Cutting a government workers’ paycheck, by contrast, is a far more concrete proposition.

Eventually, the Commonwealth will settle more graciously into this equilibrium, and learn to accept itself as it is. As long as there’s just enough of a private sector to keep the public sector paid, the community at large will be satisfied. The Commonwealth likes living in the eternal present, and the future is not a popular, or easy, sell.

(Ed Stephens Jr. is an economist and columnist for the Saipan Tribune. E-mail him at Ed@SaipanEconomist.com)