Malinvestment
A story yesterday about the pay of toll booth operators demonstrates what is wrong with our economy. Austrians often talk in terms of malinvstment brought on by easy credit as the source of economic depressions. Because interest rates have been grossly manipulated lower than what would be observed in a true market for money, businesses expand under the belief of increase demand and they take on longer term risks due to the affect the low rates have on the future present value of projects.
The pay received by some toll booth operators shows another type of malinvestment where resources represented by money are diverted toward government wages far greater than what could be earned in the free market. A toll booth operator basically lowers a gate in front of a driver. In order to continue on their way, a driver pays money to the toll booth operator. This description sounds almost identical to a parking lot attendant where a gate is raised after a driver pays a fee to exit.
In any thread of sound reasoning, does anyone believe that a parking lot attendant receives a pay of $100,000 or more. Yet this is exactly what some toll booth operators show as their annual pay. Since they work for the government, the wages for government workers also determine pension payouts.
http://nation.foxnews.com/new-york/2011/12/14/ny-toll-booth-worker-makes-100000
Any questions why are economy is going down the toilet