President Bush (see, even someone who scoffs at the very institution of the presidency finds himself paying it a certain measure of typographic respect because of customs of writing style and the desire to be understood by most people) is probably wise to concentrate on a few -- probably a half-dozen at most -- legislative initiatives for now. The custom of judging presidents on their first 100 days in office is somewhat arbitrary, but it's going to happen like it or not. And, as Milton Friedman explained in his book "Tyranny of the Status Quo," it's not altogether irrational.
There are solid institutional and structural reasons, beyond simple custom and journalistic convenience, for figuring that a new president coming into office has about 100 days to get something done. That's as long as a congressional/media honeymoon generally lasts, and about the time it takes for the denizens of the permanent government to figure the new guy out and devise ways and means of making sure he doesn't do anything rash enough to disturb their comfortable lifestyles -- let alone threaten any department or position, every one of which is deemed essential to the well being of the people, bless 'em.
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So Dubya is pushing on education reform, subsidies for faith-based charities and might do a deal on cosmetic campaign-finance "reform." Few conservatives or advocates of limited government will be thrilled if he is successful in these areas, for they will increase federal power and influence over institutions that would really be more useful to a diverse society if
governed locally and independently. But the ill effects will take a bit of time to manifest
themselves, and few will acknowledge that they are the source of the ill effects, just as advocates of campaign "reform" forget or don't know that the present rotten system is the result of the post-Watergate system and more moves in the same direction will only intensify the ill effects.
If marginal increases in federal control over education, charity and politics are the price of a substantial tax cut and a certain amount of deregulation, however, and if politics is truly the
art of the possible, perhaps the price will be worth it. If Bush can actually get the death tax eliminated, the marriage penalty relieved and marginal tax rates lower, the results will include substantial revitalization of the economy, though it might take a while and few will understand or acknowledge the cause. A healthy economy for most of his term will
improve Bush's chances to achieve other reforms, and perhaps even re-election -- and will do more to help ordinary Americans have better lives than anything the government can provide.
It could be argued, however, that substantial regulatory reform and deregulation would do even more to liberate the productive capacities of ordinary Americans. Regulation is the "invisible tax" on creativity, innovation and growth -- and even more so on those who do the real work of America by running or working in businesses that provide basic needs (food, clothing, shelter, entertainment, knowledge to satisfy curiosity, cultural events, community activities) at a modest profit. Regulation inevitably imposes costs and inconvenience on any human activity -- sometimes to produce an equivalent return in health and safety, sometimes not -- and large or high-profit businesses are better able to bear those costs than are smaller, younger businesses with perhaps more modest ambitions.
Deregulation, then will encourage more small businesses, traditionally the major source of new jobs and innovation in America and will also promote more flexibility and adaptability in the way business is done. The value in a regime that encourages such innovation is much greater than the mere cost of regulation. Most businesses would be better off if they still had to pay the added costs imposed by regulation but didn't have to deal with or answer to the regulators, leaving them free to solve (or not solve) their own problems in their own ways.
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Any large-scale (or even symbolic) deregulatory initiatives the Bush administration can get done during the first 100 days, then, will pay large dividends to the American people over time. The new president has taken steps at least to examine Bubba's last-minute "midnight regulations" before they take effect, which is a step in the right direction. One may hope he will simply reverse every one of them, then take a fresh look at executive orders signed
during the last eight years and work on reversing them.
The refusal -- so far -- to accede to whines from California about how the federal government has to save the state government from itself when it comes to electricity generation and distribution is also a good sign. If the transition team has come up with a couple of relatively dramatic deregulatory initiatives for the first 100 days -- not necessarily abolishing whole departments -- that would be a welcome bonus.
But the case of the Federal Energy Regulatory Commission suggests other initiatives that could be undertaken more quietly over a longer period of time, which might do even more to free the American people of unnecessary and arbitrary restrictions on their activities and undertakings. It's time for an intelligent and discriminating spring housecleaning
throughout the overgrown federal government.
I say a discriminating reform because most of the energy economists I've talked to in the last several weeks about California's electricity crisis (brought on by government-mandated restructuring, not deregulation, but we're losing that battle over terminology) believe that on balance FERC has been a force for deregulation and moving toward more reliance on marketplace or market-like institutions as various states are grappling with the need to move beyond the old regulated-monopoly utility model. This has apparently been true throughout the Clinton administration, although few other aspects of governance under Clinton have reflected his occasional "new Democrat" rhetoric. I don't know the reasons for this; perhaps it is a matter of personnel being policy, perhaps the fact that those who really know something about a how a given market really works are more likely to understand the benefits of market mechanisms than those whose knowledge is superficial or glancing.
By refusing to intervene in California (beyond the temporary maintenance of a marketing order), FERC has so far sent deregulatory signals to California. The mechanisms for receiving such signals in California are not exactly keen, however, skewed as they are by
political considerations and lack of understanding in the highest reaches of California government. But perhaps FERC officials can quietly explain to people in California that other models that more closely resemble real deregulation, as in Pennsylvania, are working considerably better than California's flawed re-regulation.
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The example of FERC shows, however, that at certain periods in their institutional lives, certain federal agencies can actually have a deregulatory impact on the country at large. I was in Washington during the 1970s, and for a time a representative to a coalition of interest groups that lobbied for airline deregulation, which was partially achieved. (Unfortunately, the air-traffic control system was left in federal hands, and its shortcomings are among the major reasons increasing numbers of people are discontent with the system, though most people in the media and elsewhere blame the shortcomings on some vaguely understood concept of "deregulation." Advocates of freedom have a lot to do when it comes to controlling or even influencing the common terms of debate and discussion.)
What I noticed, however, was that the Department of Transportation under Carter, at least at the second-tier level of more-or-less permanent "experts," was all for deregulation and was extremely helpful in pursuing the agenda. Many of these experts were holdovers from the Ford administration, though not all. You could say in that case that personnel was
policy. Over time most government departments gravitate toward pushing for more control because more control serves their long-term institutional interests. But there are times when certain departments, for a variety of reasons, actually push intelligent policies. A discriminating review of the federal regulatory structure would leave those departments alone, at least for the time being (though it might be wise to leave a memo in the "tickler" file to return to them at a later date).
During the Reagan administration the Grace Commission -- headed by industrialist Peter Grace and deputed to root out waste, fraud and abuse from the federal government -- actually made a difference in the conventional public discourse for a while. In part because it was so easy to find and identify examples of waste, fraud and abuse and in part because Peter Grace himself turned out to be extremely mediagenic in a rough-hewn, no-nonsense kind of way, the permanent establishment found itself talking about Grace Commission findings and recommendations. The Grace Commission was a part of the most important thing Ronald Reagan accomplished, which was to change the terms of the debate to make reducing government and lowering taxes respectable subjects in polite company -- at least for a while. Few of the recommendations were carried out, of course, but a permanent
organization, Citizens Against Government Waste, was formed with private funding and is still a fixture on the Washington scene.
A similar commission, aimed at regulatory duplication and excess and the related phenomenon of corporate welfare, might have a salutary effect, at least in the medium term (the next half-dozen years or so) on the political climate and perhaps even on governmental
structures and institutions. Established organizations like the Cato Institute and the Heritage Foundation, as well as CAGW and Americans for Tax Reform, have already done a great deal of research in these areas, and a few bipartisan efforts have had some modest
success (e.g., the "green waste" coalitions that have identified government spending that harms the environment, like below-cost timber sales). So there is a body of knowledge and a record of both success and failure to learn from and build upon.
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I'm open to suggestion as to what to call such an effort. Obviously the phrase "reinventing government" is fairly discredited, for good reasons, and "restructuring" or "eliminating duplication" aren't very sexy. "Spring housecleaning" might work. Rooting out unintended consequences? The phrase a "smaller, smarter, more effective government" has been used to
cover inaction, so it might be too tainted.
Economist John Baden has suggested creating a government agency that would seek out waste in other departments and receive a percentage of the actual savings made by reducing or reforming other departments as part of its own operating budget. Thus it could only grow by reducing spending elsewhere, and it would have the usual bureaucratic incentives to do
so. Bureaucrats would probably find a way to pervert such a virus agency, but it might work for a while. A restructuring effort might look into the idea more closely.
The chairman of such an effort should be a respected, preferably already well-known figure from the private or independent sector who knows how to handle the media. Is Clint Eastwood between pictures and looking for an interesting challenge to occupy the next
several years? Maybe Bill Gates could be the figurehead in exchange for dropping the Microsoft persecution? What are your ideas?
If George W. Bush wants to have a long-term impact on the government in addition to whatever short-run successes he may have in the next few weeks, an effort to begin and eventually to institutionalize a thorough housecleaning in the federal government would be worth consideration.