Over the past few days, folks at Big Government and The American Prospect have been debating the issue of how much government employees ought to make. It’s an interesting topic, but neither of the parties in that debate touch on the real reasons this issue bugs me. Public employees constitute a labor pool that isn’t subject to the standard adjustment mechanisms that the economy imposes on everyone else. This is an economy that’s trying to deflate as it deleverages. There’s a lot of reasons why this is bad, but it’s also a large force that you can’t block without some serious consequences. If you try to stop water flowing downhill, you’ll get wet.

Also, the debaters are concentrating on salary only. Obviously, a sector that hires mostly lawyers and trained professionals like teachers and nurses will tend to higher salaries. But the exceptionally generous pensions, benefits and job security that public employees get are compensation too. You can argue this point, but the economy sees those items as part of the cost of the labor.