IS THERE A DEEP STATE?

There is a high level of political volatility and partisan rancor in most European countries and in our own polity. I think the reason for the discomfort is that a significant percentage of the electorate has found the political establishment wanting. New parties and fringe parties have been garnering a significant percentage of the vote in most of the recent elections in Europe. In our last presidential election, 49% of the electorate opted for a loose cannon with absolutely no government experience. It would be harder to imagine a harsher vote of no confidence.

President Obama and the Democrats spent two years solving our health care crisis . . . by coming up with a system that provides a narrow network, very expensive, and highly subsidized insurance to 2.5% of the population. Economic growth has been anemic. The plight of those bypassed by technological change and global competition has been ignored. Coastal elites have announced that their evolving cultural norms will be jammed down the throat of flyover country. Who could have conceived that bathroom access for a tiny minority of transgender individuals would become a defining issue of virtue signaling? Government collects lots of money, and, in many instances, provides shoddy service.

The electorate revolted and some of its members believe the revolution is being stymied by a deep state conspiracy. Do they have a case? The short answer is yes. The comprehensive answer is significantly more complicated.

Francis Fukuyama, the most astute student of politics I’ve ever encountered, tells us that good government requires three things. They are rule of law, consent of the governed, and a non-partisan bureaucracy of expert technocrats. America got the first two well started in 1789. It took until the beginning of the 20th century to shake off the spoils system and get a bureaucracy hired on merit and shielded from the whims of elected politicians.

However, every solution comes with its own problems. Public sector employment has grown inexorably into a gigantic interest group. There are 2.1 million folks employed by the Federal government, excluding the military. That is a deceivingly low number because they outsource a lot of work to contractors, many of whose employees are de facto government workers. In addition, more that 20 million folks work for state and local governments. Mostly, they belong to unions. In aggregate, those unions are the largest contributors to the campaign coffers of those seeking elective office. Well over 90% of the money goes to Democrats. Generally speaking, Democrats favor more government and more government employees.

The first area of concern for public sector lobbying is their own pay and benefits. In the early days of civil service, there was a trade off. The pay was lower than the private sector, but there was much greater job security, less pressure to perform on a daily basis, and much better benefits. All that changed when John Kennedy opened up the floodgates to union organizing. One credible study I saw concluded that the average public sector employee (excluding those at the very top) earned 132% of equivalent employees in the private sector in pay and 175% in benefits.

The second concern, especially among the upper echelons, is power. A bigger organization with a bigger scope means more pay, more clout, and more ability to accomplish change.

That gets us to the most delicate issue — ideology. There are lots of dedicated and hard working people on the public payroll. They want to do their job and do it well. The question is whether the job they want to do comports with the job the voters want done. In the case of an agency like the EPA, a great many people object to the goals of the organization, which don’t comport with Congressional mandates. A great many people, myself included, think that ideologically driven employees are stretching the bounds of their legislative mandate beyond all recognition.

My favorite example of an ideologically driven bureaucracy is a story I heard about the State Department during the administration of George W. Bush. There were cans on the desks of staffers to accept small contributions. The vessels were labeled “Can Bush”. Imagine how they feel about Trump and imagine the efforts that are being undertaken to inhibit his agenda.

The summary is that civil service reform has created a very large interest group with a lot of power and a political agenda. Elected politicians come and go, the permanent government endures.

What is an appropriate response to permanent government? How do we reconcile a protected class of public employees with the notion of consent of the governed?

The first thing we should do is increase the level of accountability. The shielding of civil servants from political whims is a good idea; shielding them from responsibility for failure to perform is not. The knucklehead who pulled the false ICBM alarm in Hawaii and left it on for 38 minutes was initially “reassigned”. After a sufficient public outcry, he was eventually fired. The VA was rocked by a series of horrendous scandals, including outright fraud. At the end of the day, NOBODY WAS FIRED! We need to find a non-partisan method of dismissing government employees who are seriously derelict in their duties.

Second, Congress needs to do its job. A great many bills are passed with vague wording that instructs various agencies of generate regulations to implement the legislation. The results are wide latitude and a tsunami of regulation. If the Congress wants to institute a policy, it should be specific. It should hold the executive branch to account for implementing the policy it specified, not allowing unelected bureaucrats to do as they see fit. We have far too many laws and regulations and very sporadic enforcement/implementation. A few laws, rigorously implemented and enforced, should be the goal. Regulations should be written sparingly and cover only minor issues of implementation. Over an extended period of time (because of the huge volume involved) every existing regulation should be reviewed for relevance and efficacy. Most of them should be discarded. Bureaucrats who shape the regulations to suit their own ideological choices should be summarily fired. Congress is supposed to write laws. The executive branch is supposed to implement/enforce those laws.

Transparency can help. One trick the EPA has used is to privately meet with environmental groups at conferences to develop policy. The environmentalists file a suit to coerce implementation of that policy. Magically, the EPA hashes out a settlement agreement, which agrees to implement the policy. That sort of thing needs to be outed.

Rotation of regulators can also help. Regulated industries spend lots of time and money to achieve “regulatory capture”, whereby they make allies of the regulator. Excepting political appointees, any regulator who leaves government service to work in the private sector in an industry that his/her agency regulates should lose pension benefits. Any private sector employee who goes to work for a government agency that regulates the industry from which he/she came should not be allowed to return to the same industry. Membership in regulatory bodies should be turned over on a regular basis.

Finally, we need to get the cost of the regulatory state under control. Pension promises need to be modified so that the taxpayers are not on the hook to top off funds that have not been fully funded by employee contributions. Political contributions by public sector unions should be banned. If employees want to voluntarily pool their money to contribute to a cause, they have a right to do so, but they do not have a right to line the pockets of the politicians who are setting their compensation. Double (and triple and quadruple) dipping and end of career games to supercharge pension payouts should be outlawed. If a public sector employee takes on a second job involving a pension, the return should be limited to the amount contributed plus a return at T-bill rates.

The answer is that there is a deep state of sorts. The light of transparency needs to illuminate that fact. The deep state needs to be held accountable for its actions; and its size and scope should receive constant attention. If government loses the trust of the citizenry, we are in serious trouble.

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