Sam makes some fair points, but I don’t think Wilkinson was saying that anyone in general can get rich on Wall Street now that Washington is so powerful. What he actually said is a little different:
[I]t really isn’t the Citizens United decision that’s about to make Peter Orszag a minor Midas. It’s the vast power of a handful of Washington players, with whom Mr Orszag has become relatively intimate, to make or destroy great fortunes more or less at whim. Well-connected wonks can get rich on Wall Street only because Washington power is now so unconstrained.
The point is not that “Wall St. pay goes up as Washington power goes up” but that the more powerful Washington is, the more lucrative the nexus between Big Business and Big Government seems to get. It’s not just the revolving door and regulators cashing in on their insider knowledge. That is important, and it’s more prevalent than people think. But it’s also a broader phenomenon. Companies will spend their money on K Street – high-powered lawyers, lobbyists, and PR firms – if it is more profitable than opening up a new factory or investing in research and development.
This isn’t necessarily a “fatal flaw” in progressivism, but it is not inconsequential either.
I’m also skeptical of Sam’s solution of “paying public employees more, not less.”
When comparing public sector pay to private sector pay, some progressives clearly have “high school teacher” and “investment banker” in mind.
I know this is a shocker, particularly if you go to Harvard, but most private sector people don’t work on Wall Street. Most of the data I’ve seen says that public sector employees get paid more on average than private sector employees, for less work.
http://www.bls.gov/news.release/pdf/ecec.pdf
This also seems to be true in the UK.
I wouldn’t go as far as Ben Franklin, who thought public servants shouldn’t be paid at all, but it takes gall to suggest that we should actually increase public sector pay.
And if you regret that public sector employees can’t make Wall Street salaries, try Main Street salaries. The police chief in my suburban town of 80,000 rakes in over $300,000 a year, not including benefits. Over 50 police officers make in excess of $100,000 a year. They do a great job keeping the Four Loko off our streets, but this kind of thing is what drives municipalities to the brink of bankruptcy and destroys public confidence in government.
Thanks to the power of public sector unions, this is happening in cities and states across America.
