Our guest bloggers are Lawrence Korb, Senior Fellow, and Jacob Stokes, a national security intern, at the Center for American Progress Action Fund.

Last Sunday on Meet the Press, former Massachusetts governor Mitt Romney blamed American economic woes on what he sees as excessive salaries and benefits for public sector workers:

[T]he real threat right here… is that if we don’t take action to rein in the scale of government and the growth of government spending and the compensation levels of government workers — you saw government workers, average government workers, are now making $30,000 a year more than the average private sector worker. These kinds of excesses and the massive deficits that, that, that government is putting in place, over a trillion dollars a year for these coming several years, this threatens our long-term viability, because it, it, it suggests that we could have runaway inflation.

The $30,000 number is a convenient statistic for someone like Romney, who has an ideological drive to slash the public sector for the sake of slashing it. And he’s hitting on an issue that has become something of a hobby horse for the wider conservative-libertarian movement. USA Today even ran an article on the subject on Dec. 11, with only a one-sentence defense for the other side buried deep in the piece.

But the problem with this statistic — as this post from Amherst economics professor Nancy Folbre points out — is that in many important ways, it compares apples to oranges. And in doing so, it ends up being completely misleading.

Although technically true — the average public sector worker made $71,206 in 2008, compared with $40,331 in the private sector — those numbers mask important factors about the public workforce that must be taking into account when making comparisons to the whole of the private workforce.

Most importantly, a much higher proportion of private workers — 43 percent — work in jobs that earn less than $25,000 a year. Most public sector employees fall into the $25,000-$75,000 range. Why the pay disparity? Overall, federal employees have more education than private employees. Forty-five percent of public sector workers hold a college degree or higher; only 29 percent of private sector workers can say the same. It’s hardly surprising that a population with significantly more education would make more money. That’s the same way in the private sector.

Figuring out how public sector pays stacks up against private sector pay for comparable jobs would offer a much more insightful look into whether the public sector is bloated with overpaid bureaucrats. Lucky for us, Harvard economist George Borjas has done just that (hat tip, Folbre). He found that at the high end of the spectrum — where so many of those free-riding government lifers reside — public sector workers are paid comparably less than their private sector brethren. And this makes sense: why do so many senior officials leave to take lucrative positions at private firms if not for the money?

The level of intellectual rigor practiced by Romney is, unfortunately, par for the course for many people on these shows. But the public should demand more from a probable 2012 GOP presidential candidate.

Bloomberg reported today that former Federal Reserve Chairman Paul Volcker, who currently heads President Obama’s Economic Recovery Advisory Board, “visited nine cities in five countries in the past eight weeks to warn that bankers and regulators ‘have not come anywhere close to responding with necessary vigor’ to the worst economic crisis in 70 years.”

In particular, Volcker has slammed the notion that financial regulation will stifle innovation by saying that the greatest banking innovation in the last 20 years was the ATM. “I wish someone would give me one shred of neutral evidence that financial innovation has led to economic growth — one shred of evidence,” Volcker said at a banker’s conference in England.

However, “there’s little evidence that policy makers are heeding Volcker”:

Two years after the start of the deepest recession since the 1930s, no U.S. or European authority has put in force a single measure that would transform the financial system, based on data compiled by Bloomberg. No rule- or law-making body is actively considering the automatic dismantling of banks that Volcker told Congress are sheltered by access to an implicit safety net

While Bloomberg is technically correct that “automatic dismantling” is not being considered, the report leaves out that Great Britain is taking apart the mega-banks that are still under government control, while the financial regulatory reform package passed by the U.S. House of Representatives last week included an amendment from Rep. Paul Kanjorski (D-PA) that would allow regulators to dismantle systemically risky firms.

Plus, House Majority Leader Steny Hoyer (D-MD) said today that House Democrats are “considering reinstituting the Depression-era Glass-Steagall Act,” which placed a regulatory wall between depository institutions and investment banks, preventing financial conglomerations like Citigroup from coming into being “As someone who voted to repeal Glass-Steagall, maybe that was a mistake,” Hoyer said.

So while it’s true that Volcker’s voice hasn’t been amplified enough — and the administration is counting way too much on public admonishments to influence bank behavior — there are at least some steps being taken to more actively rein in the biggest banks on both sides of the Atlantic.

Volcker’s argument about the role of innovation, though, is spot-on, and hasn’t been adequately discussed. As Dean Baker pointed out, “financial industry profits now account for more than 31.5% of all corporate profits,” which is “a higher share than at any point during the housing bubble years.” One financial engineer actually told Volcker that financial innovation does nothing to help the economy, but “it’s a lot of intellectual fun.”

Do we need a financial system that swallows up almost one-third of corporate profits by passing paper back and forth? I don’t think we do. And hopefully lawmakers will realize that Volcker is beating this drum and listen up.

Back in July, when a scheduled increase in the minimum wage from $6.55 to $7.25 per hour was about to take place, Fox News ran a segment examining how “the hike will hurt,” joining a media chorus about the supposed detrimental effect the increase would have on business hiring.

Now, with its Republican-inspired “Where are the jobs?” campaign in full swing, Fox has gone “on the job hunt” with a “new” idea for increasing employment: cutting the minimum wage. Jumping off from an op-ed by Washington Post editorial board member Charles Lane, Fox yesterday ran a handful of segments on the same basic premise — cutting the minimum wage may be the answer to the jobs dilemma. Watch a compilation:

Fox’s anchors seemed very pleased to have stumbled onto this line of thought. Of course, none of the anchors mention that almost all of the economic research on the subject shows that the minimum wage has little to no effect on employment. The most well known researchers on the subject — David Card and Alan Krueger — examined a minimum wage increase in New Jersey, and found that “employment actually expanded in New Jersey relative to Pennsylvania, where the minimum wage was constant.”

Fox’s “brand new information,” meanwhile, is a study published last year by David Neumark of the University of California and William Wascher of the Federal Reserve that found that increasing the minimum wage may affect, by Neumark’s own admission, a “small number” of workers.

Of course, some employers would inevitably jump at the opportunity to hire workers dirt cheap and pay less than a minimum wage that already doesn’t lift a family of three out of poverty. It would actually take a minimum wage of $9.92 per hour to match the buying power of the minimum in 1968, as “in today’s dollars, the 1968 hourly minimum wage adds up to $20,634 a year working full time. The new federal minimum wage of $7.25 comes to just $15,080.” That’s a total of $5,554 in lost wages.

And, if the minimum wage were decreased, how many employers would simply cut the wages of their current workers, at a time when consumer demand is already low? There are plenty of job creation ideas being bounced around these days, but you can count on Fox News to seize on one that would mean less money and a lower standard of living for workers.

Cross-posted on ThinkProgress.