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The Shutdown: Exposing the Bloat

One nice thing about the shutdown is that it exposes the vast waste and inefficiency in the federal government.

Investors Business Daily reports, for instance, that the president will have to do without three-quarters of his White House staff—1,265 people, to be exact—during the shutdown. Vice President Joe Biden will have to make do with a mere dozen staffers during the emergency. The U.S. trade representative will muddle through with only 61 employees, who will be beavering away “developing, coordinating, and advising the president on U.S. trade policy.”

If one-quarter of the White House Staff can keep the executive branch from collapsing, what are the other three-quarters needed for? Since the vice president is constitutionally powerless, why does he need more than a dozen staffers at any time?

There is always a tendency to add personnel. Politicians and bureaucrats love entourages as a display of their importance and power. Those human tendencies are just as present in the private sector, but such personnel bloat doesn’t happen nearly to the same extent. Why? Simple: the profit motive.

There are only two ways to increase profits (and profits are the sole raison d’être of corporations): increase income, or reduce costs. Any reduction in costs flows straight through to the bottom line, so there is always great pressure to find ways to do things more cheaply. Cutting personnel increases profits and so personnel tends to get cut whenever possible (and that, in turn, provides a powerful incentive to workers to work hard enough and productively enough to avoid being among the let-go).

Government faces no such pressures, so staff numbers tend to increase slowly but steadily. And duplicative and obsolete programs hang on while new programs are constantly being added. The Interstate Commerce Commission, for instance, lost its powers to regulate transportation in 1980, but it was abolished only in 1995, after twiddling its bureaucratic thumbs for 15 years.

There are ways to provide the same pressure to be efficient and lean that corporations know so well to government. Generously rewarding managers who develop ways of reducing costs is one way. Giving managers half of one-year’s savings would motivate them like crazy. Setting up competitions among regional offices is another.

But without doubt, the shutdown will end sooner or later, the 825,000 personnel who are not “essential” will go back to working none too hard, the Washington D.C., commute will once again be horrible, and nothing will change.


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