This diary, like many others do, originated in a comment that became a novella.
It was inspired by pkohan's diary, How much private sector employment is created by the public sector?
Some private sector employees rubbing their hands with glee at the prospect of laying off public sector workers are in for a big surprise. Below the fold is my personal experience explaining one reason why.
Government agencies who regulate industries create employment because the businesses they regulate must hire people to deal with the agency. In addition entire ancillary industries develop to help businesses deal with regulators.
For example, for many years I worked as an Import Specialist with the U.S. Customs Service. My job was to appraise imported merchandise, classify it according to the tariff schedules, assess customs duties, enforce marking requirements, enforce intellectual property rights statutes and act as the enforcement arm of 40 different agencies (FDA, FTC, CPSC, ITC, etc. etc.) with respect to imported merchandise.
An entire industry of Customs brokers exists to help importers comply with Customs and related statutes. There are law firms that specialize in nothing but Customs law to help importers contest Customs decisions, penalties, forfeiture actions, etc. Most large importers also have internal staffs solely addressing Customs issues.
When Customs was moved from Treasury to Homeland Security, supply chain security became a big thing, so importers and international carriers were forced to hire security experts to meet Customs standards.
When Customs automated entry filing, importers and brokers were forced to buy specialized computer software to accomplish their filing, along with all the ancillary equipment, supplies, etc.
People don't usually think about the employment consequences of deregulation, but the same types of infrastructures exist around all regulatory agencies.
If the income tax were replaced with a flat tax, there would be massive unemployment among tax compliance personnel, including accountants.
And of course, in addition to the equipment and supplies that agencies like Customs purchase from the private sector, all these ancillary industries also purchase equipment and supplies from private industry.
It has always amazed me that so many workers in private industry are so eager to cut government spending. Where do they think that money is spent, in Turkmenistan? Well, some of it is, of course, but the overwhelming majority of government purchases are in the United States, buying goods and services produced by the very people screaming for spending cuts.
It also amazes me that they get so giddy about federal employees losing their jobs. It doesn't occur to them that those federal employees will enter the already crowded private job market to compete for a shrinking number of jobs, armed with a higher educational background than the public at large.
We're all tied together in a giant web, and the lines between public and private cross and recross many, many times, which will soon become apparent to some of the most unsuspecting victims of their own ignorance.
------------------------------------------------------------------------------------
Thank you for all the kind comments and for the almost fatal shock of seeing my diary on the rec list. I love you guys.