Why Government Fails You.

April 11, 2016

In November 2014, America's electorate harshly repudiated five years of Democratic leadership in both the executive and legislative branches. Swinging the political pendulum overnight. And providing Republicans control of the House and Senate.
The GOP landslide was more indicative of the nation's DNA, than its enthusiasm for Republicans.
The nation must be governed. But it will not be governed from the left. Voters did not turn away from Democrats in 2014 because of an inordinate amount of faith in the GOP. Republican ineptitude has been writ large this last decade. And the electorate's exhaustion extends to both sides of the aisle.

The 2014 election was more about the nation's DNA than its ideological preferences. Americans can live with the idea of dumb government. They will not tolerate, however, a monolithic one. Because that goes entirely against the very idea upon which this nation was created.
The twentieth century saw the U.S. electorate move slightly to the left. Migrating from farms and ranches to the crowded opportunism of big cities. In so doing, we recognized the need for certain safety nets. The ability to sustain ourselves between opportunities. Yet, November 2014 reminded us that, while the electorate has migrated left, it has no intention of moving any further. Nor will it be dragged.
Americans place a premium on liberty, and the rights of the individual. And through the lens of those two priorities does America's worldview exist.
So, while pragmatic in its recognition of the need for specialized government roles, the American public has little faith in institutions. Harbors widespread mistrust of the executive and legislative branches of government, not to mention large government organizations like the IRS, CDC and VA, to name a few.
That is not a political statement. But fact. Borne out by myriad polls that regularly reveal as much. Intensifying the antipathy towards the public sector is the idea that Americans remain uniquely confident in their own abilities, and those of their private institutions. They do not feel as if they need be taken care of throughout every facet of their existences. Regardless of how government tries to do so.
Even as America adopts policies more aligned with Europe's big-government orientation, we maintain our prairie-bred dislike of government authority. Innately recognizing that the nation's exceptionalism has little to do with government. Our achievements stem from core beliefs. The right to life, liberty and the pursuit of happiness. Codified in the nation's Constitution, and its Declaration of Independence.
In 2014, the Brookings Institution issued a report entitled, "A Cascade of Failures: Why Government Fails and How to Stop It" (here). The study identifies 41 major Federal failures occurring between 2001 and 2014. The authors examine official government reports on each incident. Then categorized them by their primary cause, those being 1) insufficient policy funds, 2) bad policy design, or 3) extreme difficulty in implementation.
One will not agree with all of the report's findings. Nor the evidence ascribed to each. But one cannot question the root causation that links each instance, long observed by objective economists.
Regardless of political party, government agency, the individuals in charge or the effort undertaken, many government activities are doomed to mediocrity for two primary reasons: poor incentives and insufficient knowledge.
Further bolstering these findings is the work of Nobel laureates James Buchanan, George Stigler and Vernon Smith, who endeavored to help understand the reasons for repetitive government failure. Especially where those in the private sector have been able to succeed.
They reveal that any government, even one with unlimited resources and the best of intentions, will enact solutions that are not only unlikely to solve problems, but will often make matters worse.
In fact, the root causes of public-sector failures are often recipes for private-sector success.
Unlike their private sector counterparts, elected officials and bureaucrats are not rewarded for maximizing taxpayer value. Nor are they sufficiently punished for taking unnecessary risks or failing to minimize costs.
Bureaucrats are rewarded for being good bureaucrats. A trait in which there is little public value. Ludwig von Mises succinctly said as much in his 1945 tome, Bureaucracy.
"The bureaucrat is not free to aim at improvement. He is bound to obey rules and regulations established by a superior body. He has no right to embark upon innovation if his superiors do not approve of them. His duty and his virtue is to be obedient."
Consider the evidence.
Government officials are rarely fired. Even after mistakes that would end a private sector career. Who was fired after the catastrophic healthcare rollout? After the CDC's vapid reaction to the Ebola crisis? After the Veteran's Administration admitted to mistreating the nation's war heroes? After the IRS targeted grass roots Tea Party activists? After the 2000 election's hanging-chad debacle? After the federal government literally shut down in 2013? After the NSA admitted to surreptitiously, if not illegally, spying on nearly every man, woman and child on earth? After millions of current and former government employees' had their personal information stolen by hackers who broke into computer systems at the Office of Personnel Management. And the State Department. And the U.S. Postal Service. And the Coast Guard.
Worsening matters for taxpayers? The fact that the government has a propensity for throwing good money after bad.
Bureaucrats are notoriously poor stewards of taxpayer dollars. Look at CGI, the contractor that won the $678 million contract to build the Obama Care website. Even after the firm had already been discredited for having blown the job done for the Canadian diabetes registry.
Unlike their private sector peers, public sector bureaucrats often operate with limited knowledge. While businessmen utilize information embedded in pricing mechanisms to make purchasing decisions. If the price of goods and services rise, a business will seek out less expensive substitutes. Government decision makers, however, often lack a comparable mechanism. Seeking goods and services that fulfill their "specs" without much concern for cost and quality.
Sadly, problems only worsen because the system enables them to self perpetuate.
While poor incentives and limited knowledge lead to persistent failure, they also result in exploitation by special interest groups of all ideologies.
Consider the standing tradition of ethanol subsidies, as provided by the annual Farm Bill. Denigrated by economists from both parties, these payouts are rubber stamped each year. To the detriment of tax payers. As well as the free market.
Ask yourself why was the Affordable Care Act was designed to expand health care coverage, as opposed to improving health care outcomes? A disparity that benefits the U.S. insurance industry without necessarily providing better and more affordable health care? Because politicians and bureaucrats, by nature, seek to reward special interest groups more than they endeavor to provide for the public's benefit. And the Affordable Care Act, like Medicare, provides mostly for older Americans. Who happen to vote. At the expense of the nation's young and healthy individuals. Who are less likely to vote.
More money? Better leadership? Neither has traditionally been capable of curbing excessive government failure. Because most government institutions are endemically unable to manage complex tasks. Regardless of how well funded, smart or experienced bureaucrats may be.
The problem rests not with the people, but with the system.
All of which explains why The Founders intended for most complex endeavors to be handled at the local level. Where boots-on-the-ground experts with localized knowledge could problem solve in their own backyards. As opposed to today's reality. Where most problem solving (ney, thinking) has been consolidated at the national level. With bureaucrats in D.C. creating blanket solutions for disparate communities across a wide-ranging nation.
How can one over-reaching policy effectively contend with the problems of different communities separated by tens, hundreds or even thousands of miles?
The War on Drugs. The War on Poverty. Both have sucked in billions of dollars while failing to even identify, let alone treat, any root causes. Drug consumption has risen. National poverty rates trend higher. Even as countless bureaucratic agencies join the fight. Year in, year out. In perpetuity. While taxpayers continue to foot the bill.
Once, Paul Revere took a midnight ride. He warned colonists of the pending British invasion. Of the tyranny, taxation and bureaucratic inefficiencies that followed. Today, those same problems present themselves not as foreign threats, but as creeping consequences of an ever-bloating bureaucracy.
Alexis de Tocqueville recognized that "the health of a democratic society may be measured by the quality of functions performed by private citizens."
Like a hammer, the government is a tool. Designed for specialized purposes. Nothing more. Nothing less. A hammer cannot inspire, save, create or overcome. It pounds nails.
Similarly, our government, its bureaucracies and special interests have no ability to enhance the American ideal. Because that ideal already exists. That ideal being a nation born, nurtured and raised on the wings of a private citizenry. Individuals working together in communities. Assisted by their government. Never burdened or impeded by it.
Done well, government preserves and defends. Done poorly, it degrades and destroys. That government is best, which governs least.
And when the needs of government begin to trump individual liberties? When a ruling class governs for the sake of the ruling class? At what point are we no better off than our forbearers who fought off the yoke of oppressive government 233 years ago?
Perhaps we're not. But simply too preoccupied, numb and distracted to recognize it.

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