We scan new podcasts and send you the top 5 insights daily.
Unions have secured "maintenance of effort" laws that prevent budgets from being reduced, even with declining demand. This creates absurdities like a Chicago school with capacity for 1,000 having only 27 students, which no one has the authority to close. The system legally requires burning money.
A bureaucracy can function like a tumor. It disguises itself from the "immune system" of public accountability by using noble language ("it's for the kids"). It then redirects resources (funding) to ensure its own growth, even if it's harming the larger organism of society.
Public services like firefighting and education are labor-intensive and subject to "cost disease." To keep public servant wages competitive with the private sector, their costs must rise continuously. This means a healthy economy paradoxically requires perpetually increasing taxes to maintain the same level of public services.
According to James Burnham's "Iron Law of Oligarchy," systems eventually serve their rulers. In government, deficit spending and subsidies are used to secure votes and donor funding, meaning leaders are incentivized to maintain the flow of money, even if it's wasteful or fraudulent, to ensure their own political survival.
Runaway costs in education, housing, and healthcare stem from government intervention. When the government promises to provide a service (e.g., student loans), it becomes a massive "buy-only" force with no price sensitivity, eliminating natural market forces and causing costs to balloon.
Despite a massive budget increase from $36.5B to $127B since 2000, key metrics like safety and education have declined while population growth was minimal. This shows that simply increasing spending doesn't solve civic problems and often indicates deep inefficiency.
The primary power of modern public sector unions lies in their ability to vote as a bloc, influencing politicians to secure favorable contracts and policies. This political leverage has a much greater impact than their ability to directly negotiate wage increases, which are more influenced by macro factors like globalism.
Government programs like unlimited student loans, acting as a single-payer in healthcare, and home ownership policies have artificially inflated demand and removed price constraints. This direct intervention, intended to help, is the root cause of runaway costs in housing, education, and healthcare, making them unaffordable.
A state court precedent makes it legally impossible for California to alter public employee pension benefits promised at their time of hire. With no mechanism for the state to declare bankruptcy, this creates an inescapable fiscal crisis that can only be resolved by a constitutional amendment or federal intervention.
Despite a $150 billion state budget increase over six years, California has seen no corresponding improvement in critical areas like housing, education, or safety. This points to a systemic lack of accountability and misaligned incentives, not a lack of money.
For many in government, the state is their "startup." They are incentivized to increase their budget and influence. This can lead to perverse outcomes where a homelessness agency's success is measured not by reducing homelessness, but by growing its budget, which paradoxically requires more homeless people.