Chapter 9 – the bureaucracy

1. “The power always in being” – John Locke Most Americans fail to appreciate the potential power of the bureaucracy, or how their decisions affect our lives. When we discuss effective and ineffective governments, the basis can often be found within the bureaucracy…are they the best and the brightest committed to a professional career of serving the public, or are they simply punching a time card until they retire or a better economic opportunity opens up? They make the bulk of our rules and serve as the enforcers of federal legislation. This may well be the most crucial leg of the iron triangle Chapter 9 – the bureaucracy

2. We have talked about the period of the late 19th century (1800s) in which tariffs as a revenue generator created massive surpluses. These surpluses were used to provide civil service employment, government contracts, and other political favors to political supporters. The spoils system was the ability of the party in power to shower supporters with government largesse. The specific rewards are known as patronage. Over time, the ineffective and corrupt spoils system was replaced with a more effective merit system. 19th century spoils system

3. During the late 19th century corruption, railroads had inordinate amounts of power backed up by business friendly courts. Congress took it into their own hands to create the first independent regulatory commission in the Interstate Commerce Commission (ICC). While this calmed anti-railroad fervor for a brief time, the ICC was staffed by “railroaders and lawyers sympathetic to them.” Congress sought to create an agency independent of the president and the spoils system, only to find that appointments still made the system responsive to the desires of the executive. The ICC was initially ineffective for the reason of both corrupt political appointees, but also the lack of an enforcement mechanism outside of the business friendly courts of the time. Independent regulatory commission

4. Through the economic booms and busts of the 1890s, the railroads eventually became the property of financial trusts who now had even greater levels of capital accumulation and political power. Teddy Roosevelt pushed a populist message and came to be seen as “the Trustbuster” Teddy roosevelt

5. “The national government differs from private business in numerous ways. Governments exist for the public good, not to make money. Businesses then, are evaluated by the profits they make, or the difference between what it costs to produce a good or service and the amount that they charge consumers for that good or service. Governments, on the other hand, are evaluated based on their efficacy, or how many individuals are provided access to the good or service at the lowest cost to both the consumer and the government. As both have significantly different missions and goals, it would follow that running a government like a business would be counterproductive. Whereas the business would want to create shortages to increase revenues and profits, the purpose of government is to reduce shortages where the market fails to provide adequate supplies to meet the needs of society. The modern bureaucracy

6. According to Campos and Root, a quality bureaucracy requires more professional bureaucrats at higher levels and fewer political appointees. The US president appoints approximately 3,500 positions while the British PM appoints only around 100. This had to do with accountability issues and preventing legislators from applying pressure on civil servants. Quality bureaucracy

7. Politically effective bureaucracies have fewer political appointees at higher levels. http://www.whitehouse.gov/briefing-room/nominations-and-appointments Data from Campos and root

8. Campos and Root also saw wide disparities between public and private sector employment as playing a significant role in corruption. Income disparity

9. Campos and Root also talk about the effectiveness of the East Asian economic bureaucracies being based on the immediate removal of ineffective bureaucrats, directors, and ministers. In the US, higher level bureaucrats are difficult to remove while lower level bureaucrats can be disposed of relatively easily. We saw the firing of US attorneys from the Justice Department, but no consequences for the Attorney General regarding questionable practices. http://www.youtube.com/watch?v=7IBvZlRqOTw The textbook talks about Cabinet secretaries as being able to be removed by the president alone. This is not accurate. The Secretary of War under the Grant Administration resigned rather then face impeachment. The same can be said of Andrew Mellon, the Treasury secretary under Harding, Coolidge, and Hoover whose economic advise led to the Great Depression. Accountability

10. The example given in the textbook regarding private contracting in Iraq is being played out in bureaucracies in the US system. Consistent with the theories of Campos and Root, we find effective bureaucrats lured away by compensation packages by the private sector. The bureaucracy then, with limited resources must compete with the private sector for quality workers. Effective regulators can be (and often are) offered employment by the businesses and industries they regulate. Reference to Inside Job (2010) The effect of private contracting

11. Cabinet departments – Complete with Secretaries who make up the president’s cabinet. Depts. Of State, Defense, Labor, etc. The formal cabinet also includes: VP, chief of staff, ambassador to the UN, and the heads of the EPA, OMB, USTR, and the Council of Economic Advisors. 4 general types of agencies

12. Independent Executive Agencies – Outside the jurisdiction of cabinet departments. Most perform services rather than regulatory functions. CIA, FDIC, FEC, GSA, NASA, Peace Corps, SBA, USPS 4 general types of agencies

13. Independent Regulatory Commissions – developed by Congress, independent of cabinets, regulatory function. NLRB, FEC, FCC, SEC, OSHA, FAA 4 general types of agencies

14. Government Corporations – Developed to provide goods and services where the private sector has failed to do so. Amtrak, FDIC, TVA, Fannie Mae, and the Corporation of Public Broadcasting. These types of corporations come into being when there are high up front costs with little promise of a return. When these investments turn profitable, there is typically political pressure to turn the corporation over to private investors. 4 general types of agencies

15. Federal employees have been allowed greater participation in the electoral process. This strengthens “iron triangle” relationships. This also takes a step back toward the spoils system of the 19th century. Joseph Gurney Cannon Recent changes

16. The textbook states,”Today, iron triangles no longer dominate most policy processes.” Issue networks is a polite way of saying the same thing. What do you think? http://www.flickr.com/photos/7371117@N05/4200949786/ Inside Job Iron triangles

17. Prevents Congress from micromanaging the bureaucracy. Legislation that is passed, if it is too explicit in discussions of implementation can lead to unintended consequences, inefficiencies, and insurmountable obstacles of red tape. Legislation is often vague, suggesting basic goals and methods for achieving those goals. Administrative discretion then allows a bureaucracy to utilize their expertise to implement policies that will best achieve those goals. This works in theory with a nonpartisan meritocracy, but can be subject to abuse with a corrupt bureaucracy. Administrative discretion

18. Rule-making: “a quasi-legislative process that results in regulations that have the characteristics of a legislative act.” This is commonly referred to as administrative law. For example: OSHA and EPA are given broad authority to protect the public from negative externalities. The rules they make to provide that protection has the force of law. Congress does not provide every rule as they lack the technical and institutional knowledge required to best achieve these goals. The people at the EPA and OSHA have that knowledge. Administative discretion

19. Administrative adjudication: “a quasi-judicial process in which a bureaucratic agency settles disputes between two parties in a manner similar to the way courts resolve disputes.” Where rule-making is proactive dealing with a broader population, adjudication is reactive to specific cases. While a business may be in compliance with the letter of the law provided through rule-making, an agency can find them to be in contradiction of the spirit of the law in application. It could be argued that the agency is acting as both judge and jury in a case before them, and that adjudication could be interpreted as an ex post facto law. In SEC v. Chenery Corp. (1947) the Supreme Court supported the rationale behind administrative adjudication. By making rules against any potential eventuality, agencies would make rules that were too rigid for ready compliance. An issue in front of an agency may be so specialized in nature that it was impossible to foresee as a potential problem. If regulations become so detailed as to cover any possible eventuality, the rulebook would become so cumbersome as to being unmanageable by either the businesses regulated or the regulators themselves. Administative discretion

20. Does the federal government have a legitimate interest in improving levels of education? The textbook chooses not to discuss primary issues that have long provided justification for public education. The charts below demonstrate what are often considered to be the two most important effects of an educated population: democratic participation and economic growth. Analyzing visuals