This idea has turned out to be more important than I thought, so it is
worth chewing over it a little more.
Governments today are rife with waste.
A big problem today is at the state and municipal levels, where
policemen, firement, teachers etc. have been gradually ratcheting up
their salaries and benefits to absurd levels. I'm hearing stories of
policemen getting $150K+, and retirement at 20 years (could be mid-40s)
with 90% pay. And full-boat medical of course. Unfortunately, the only
way to get out of these kinds of committments is through bankruptcy,
which is messy. Messy but perhaps necessary unless these giveaways are
crammed down through some other means, like inflation or some separate
negotiation. Eventually the call comes down to trim the school budget.
Do they toss overboard some useless administrators at $175K a head
(maybe more including all benefits)? Of course not. Instead, they
eliminate the budget for pencils. Then, for want of $275 of pencils,
the education system grinds to a halt. Then the parents get together
and have a Bake Sale to raise $275 for pencils. Everyone then, with
grim pride, congratulates themselves on coming together and making
sacrifices to get through the crisis -- for the kids, of course. After
all, if you call it "austerity" is has to look like austerity. (Baby
Boomers are very into the way things look.) The proverbial tightened
belt. Unfortunately, all the images associated with "austerity" are
negative. You could call it "refocusing" or something like that --
refocusing tax revenue on meaningful things instead of various forms of
waste -- and maybe people would then expect some sort of better, less
wasteful outcome, that could well be better than what we had before,
and cost less too.
November 2, 2008: "Stimulus"
Lifecycle of Bureaucracy
(December 2, 2010)
All bureaucracies share a lifecycle of growth, self-protection and
Yesterday I discussed the doubling, tripling and quadrupling of the
"big ticket" household expenses: property taxes, public college tuition
and healthcare costs.
( Inflation Is Rampant in Tuition, Healthcare and Property Taxes).
Correspondent Andrew T. asked:
Why are those things going up so
drastically in cost? Cui bono? (To whose benefit?)
The common thread I could immediately see after the first few sentences
was the public sector employees and their unions who inhabit those
Andrew writes from Canada, where healthcare is overtly a public/Central
State service. But in the U.S., if you tote up Medicare and Medicaid,
the Veterans Administration healthcare system (over $1 trillion per
year for the three agencies) and all 2,300 pages of regulations on the
so-called "private" healthcare system (profits are privatized, costs
are socialized), then what you have is a defacto government-controlled
healthcare system with all the fraud, fiefdoms, waste, duplication, and
resistance to efficiency of a government bureaucracy.
Before we get to the lifecycle of bureaucracy, I want to be clear this
is not a slam on people who dutifully work in bureaucracies.
Bureaucracies arise to serve a social or political need (or perceived
need) in an organized fashion, and systems of management, accounting,
oversight and so on are required.
But just as bureaucracies arise, they also ossify, devote their energy
to self-preservation and then implode.
We can see how this works in this chart of the University of California
system's count of faculty and administrators. I suspect this phenomenon
is universal in state-funded universities: bureaucratic staff that have
nothing to do with the classroom, research or teaching grow to dominate
the payroll and the budget.
Much of this is human nature: if the budget can be expanded to serve my
department or agency, then it will be expanded. There are other
organizational tropisms as well: ENA, for example: "everyone needs an
assistant," including the current assistant.
When an economy is growing rapidly, then the waste, fraud, duplication,
inefficiency and bloat go unnoticed because tax revenues and the budget
are rising even faster than the bloat and inefficiency. The problem
arises when tax revenues fall. Then the bureaucratic impulse to
never-ending growth is stymied, and the various bureaucracies turn
inward as they muster their forces to wage internecine warfare with
other protected fiefdoms.
(That's straight from the Survival+ critique.)
Self-preservation become the paramount concern, and the original
purpose of the bureaucracy is buried beneath the urgent priority of
saving perquisites, benefits, staffing, and budgets.
When cuts are required, the actual service provided is slashed to
maintain bureaucratic bloat. Thus the Administration of a university
suffers simulacrum cuts (a "hiring freeze," etc.) while the teaching
and graduate-student teaching assistant staff levels are slashed and
"Tip of the spear" military forces and readiness are left twisting in
the wind while the thousands of senior officers in the Pentagon and
Services jostle for promotions. At the point of implosion, there are
more captains, colonels and generals than actual war-fighters. (There
are plenty of barbers, cooks, waiters and assistants, though, to serve
the senior officers.)
Benefits for the survivors are left basically untouched while new hires
are fired to preserve the budget for those with seniority.
At some point, the mission of the bureaucracy is completely lost, and
the citizens' patience with institutional incompetence and
self-aggrandizement finally runs out. Although it seems "impossible" in
an era where the Federal Reserve just conjures up $1 trillion and the
Federal governments sells $1.3 trillion in bonds every year to fund its
ballooning deficit, bureaucracies can and will implode.
On a small scale, we are seeing this process in action as small-town
police forces are disbanded. This process will eventually be seen in
smaller cities merging with adjacent cities to cut costs.
I have prepared this visual representation of the bureaucratic