Saturday’s Pape’s: Muckraking and Personnel

May 19th, 2012 at 9:01 am

I’m a sucker for good, old-fashioned journalistic muckraking, where reporters doggedly dig, often with the shovel of FOIA, to expose some ripoff or worse.  It’s not just the antiseptic of sunlight on the problem, it’s more than that.  Those of us who believe that amply funded, “right-sized” government has to play a role in America’s future must be able to make the case for effective and efficient government.  These stories thus point to problems that need to be addressed if we are to convincingly make our case.

Both the NYT and WaPo carried front-page muckraking stories today.  The NYT exposed a firm in the district of the House appropriations chair, Hal Rogers (R-Ky), for selling a helicopter part to the Pentagon for $17K a pop in a no-bid contract when a competitor has the part for $2.5K.  The WaPo story tells of scientists ripping off the Energy Dept.

I know such stories fuel the “gov’t sucks” meme that’s so damaging to our polity, and one critique of them is that the numbers involved should be scaled.  It sounds terrible—it is terrible—for the GSA to waste $900K on partying in Vegas—but that’s a tiny, miniscule fraction of public spending, the vast majority of which is essential and well used.

Still, rooting out these microbes of infection is exactly the work journalism used to be known for and I was pleased to see it well represented this AM.  What must happen next, in the spirit of reversing the anti-government meme, is swift, corrective action.

Speaking of how well gov’t works—or not—this article also caught my eye.  It’s about Dan Tarullo, a member of the Federal Reserve and a staunch and stalwart supporter of financial regulation.  He’s been quite influential in pushing back against the historical leanings of the Fed to under-regulate.   Former Fed chair Alan Greenspan essentially bought into the notion that market discipline would lead banks to self-regulate, and that set the deregulatory tone that helped inflate numerous devastating bubbles.  So it’s very good to learn about Dan’s work.

But the larger point here—one that’s quite underappreciated—is how much personnel matters.  I suppose we get this at the level of presidents, but where it really matters is a step or two down in the hierarchy.  The fact that Dan–an acquaintance, btw–is where he is has a lot to do with the ultimate regulatory outcome.

Every day in high-level government work, questions arise wherein the President (or Fed chair) doesn’t have a strongly held view, where he or she leans slightly one way of the other—where they could be convinced either way.  They call in their economics team, e.g., to debate the issue.  If only one out of the eight or so people in such meetings supports the policy—helping the manufactures, getting tougher on the banks, amplifying labor union concerns, discounting phantom bond market vigilantes—it’s human nature for the principal to assume there’s something wrong with that individual’s argument.  Maybe you think the lone position makes sense, but why is this guy arguing alone…if he was right, wouldn’t others be with him?

So what you really want as President or Fed chair are pretty evenly divided advisers who you can count on to debate matters in front of you in roughly even numbers.  Otherwise, you’re not to going to hear balanced debates and the majority will always dominate.  Most of the time, they’ll be right, but often they’ll be wrong, and you’ll miss the policy road less taken—the one that can lead to more progressive change.


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6 comments in reply to "Saturday’s Pape’s: Muckraking and Personnel"

  1. Rima Regas says:

    Waste goes on everywhere, in government offices at state, local, and federal level. I suppose the fact that they are publicly-funded makes them a fair target. Waste also goes on in the enterprise. That seldom gets reported on. Companies also end up purchasing goods and services that are grossly overpriced and inflate pricing for everyone else. In my lay opinion, the prime example of waste lies in healthcare, with companies hiring other companies (the insurers) to manage employee plans. I don’t see a $1700 piece of plastic that is the size of someone’s mouth as any less wasteful than the $17,000 helicopter part that could have been purchased for $2,500. Yes, I know. I’m preaching to the choir. Consumers, private, corporate, and bureaucratic, are not educated. If they were, not only wouldn’t there be so much waste, but people would more readily see the value in a single-payer healthcare system.

  2. Tom High says:

    Are you saying in your last paragraph that you want an equal # of supply-siders and Keynesians in the room? I hope you are not saying that.

    • Jared Bernstein says:

      Definitely not. A large theme of OTE is exposing the fantasy that is supply-side econ. I urge diversity of views but such diversity should cease at the shore of Fantasy Lake.

  3. Misaki says:

    It is somewhat strange that people get upset about Bain Capital laying off workers… even the Republican party used it in arguments… yet the same people think the government should get rid of similarly unnecessary jobs.

    (This is assuming that the future value of companies bought by Bain Capital were correctly reflected in the market price for their stocks, meaning that the profitability of those companies really did increase in the long term.)

    I guess people just think that government is bad? Or… maybe that corporations are allowed to have unnecessary workers as a perk for making quality products, while since government is funded by taxpayers that are forced to pay taxes there is no excuse for waste.

    In other words, they think that corporate profits go to the rich, while it’s actually the middle class that pays most taxes!

    …but there’s no point in raising taxes in the rich because everyone wants to think of themselves as rich/well-off, even if they don’t actually own $m’s worth of stock or (other?) financial capital.

  4. Misaki says:

    Also, progressive policies are always good. Even 55% of Republicans would agree.