Germany In The 1920s Might Have Lessons For America Today

See AMERICA’S WEIMAR MOMENT by Greg Ransom at "Taking Hayek Seriously." Excerpt:

"What is happening in Wisconsin, California, New Jersey, Illinois, et al — and in Washington, D.C. — should remind educated people of nothing less that the economic crisis of Weimar Germany, when governments captured by public sector workers and the apparatus of Bismarck’s redistributive state led to massive fiscal irresponsibility — and a choice between insolvency and hyperinflation.

Perhaps the most convincing authority on this topic is Niall Ferguson, who argues persuasively that profligate spending on public sector workers and Bismarck’s redistributive state was the ultimate source of Weimar Germany’s economic catastrophe — and John Maynard Keynes proved to be mistaken about what turned out to be the light economic burden of the reparations portions of the Treaty of Versailles. The problem wasn’t Versailles. What led to the great disasters of the 1920s and 1930s were the economic consequences of governments controlled by the demands of public sector workers, Bismarck’s redistributive state, and leftist union / party organizations. When the government becomes nothing less than an arm of a party apparatus controlled by organizations dedicated to advancing the financial/ political interests of workers hired to serve the public, you no longer have a liberal republic — what you have instead is a top-down guild organization dedicated to serving one set of citizens at the expense of all other citizens — in California government sector employees bring home more than half as much again as their comparably skilled market sector peers, and a huge number of non-college educated government employees in California qualify for fat six figure pensions at the age of 50 — 100%-120% of final salary — and many other government workers retire at 90%-100% of final salary beginning at age 55. And in the executive ranks in California, all manner of public officials have resorted to outright looting — both legal and illegal. University bureaucrats makes quarter million dollar and more annual salaries, California’s countless state board members make six figure salaries for a half-dozen or less days work, city and county and public utility bureaucrats of all kinds make haul home tens of millions of dollars across relatively short careers. And on and on it goes.

At the Federal level, government workers bring home twice the income of their private sector counterparts.

What we have destroyed is a liberal republic, and what we have replaced it with is a Weimar-style kleptocracy, enriching a political / government client class while simultaneously looting those laboring in the productive economy — and mortgaging the future of our children and grandchildren.

And what comes next is the most truly worrying thing of all. What can’t go on forever doesn’t, as the Germans frightfully learned in the 1920s."