Monday, April 07, 2008

Inequality and excess

Arnold Kling says that "America's political class [has] a ridiculous excess of power, and yet they only want more".
Montgomery County, Maryland, has an annual budget of $3.8 billion. This sum is under the control of a County Council with nine members. On an average per-politician basis, each County Council member controls just over $400 million a year in spending.

To put an annual spending figure of $400 million in perspective, consider this: if you had $8 billion in assets and earned 5 percent per year on those assets, that would give you $400 million in annual income. And few Americans have that much. The world's wealthiest person is Warren Buffett, with $62 billion (admittedly he has often been able to earn more than 5 percent per year from investments). Bill Gates has $58 billion. Fewer than 40 Americans have more than $8 billion in assets, and their names are largely familiar to us--the Waltons of Wal-Mart, Sergie Brin and Larry Page of Google, and so on.

Can you name the members of the County Council in Montgomery County, Maryland? I can't name very many of them, and I live there. Still, getting elected to the County Council in Montogmery County, which is pretty far down the ladder in terms of political power in the United States, enables you to control more annual spending than the wealth of Donald Trump or Steven Jobs.
The County Council in Montgomery County, Maryland, is certainly associated with a large annual budget, although I'm not sure if it's accurate to say that they "control it" anymore than a hood ornament controls a car.

For example, how much discretion does each Montgomery County Council member really have over their $400M? I assume that some of the budget goes to pay school teachers. Can a Council member change the salary of a school teacher? Can they decide to half the number of school teachers? Can they even fire a school teacher if they really want to? What about firefighters or policemen? How about employees in any number of the state and local agencies who are paid out of the Montgomery County Council budget, or the various outreach and good works efforts that, while not officially government entities, nonetheless exist almost entirely on tax, or tax subsidized dollars?

I'm pretty confident that if the Montgomery Country Council decided to take 2008 off, there would be no perceptible difference in the operation of Montgomery County, and the vast majority of their $3.8M would find its way to the same agency that it always finds its way to.

While elected politicians are the most visible parts of a government, the vast majority of actual governmental operation is carried out by the hundreds of thousands of dedicated civil servants who toil away in the various agencies. And since they are lifers, they can outlast, bamboozle, and thwart any elected newcomer who dares to tangle with them. That is where political power really lies.


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