Topic: Government and Politics

Vultures on K Street

Washington, D.C. is chuckling at the news that two vultures–real live vultures, the sort that circle the sky over roadkill–have settled in to nest in the very urban setting of K Street, symbolic home of lobbyists. Washington Post reporter Theresa Vargas spoke to a raptor expert about what it all means: “Unlike hawks that find their food by seeing it, he said vultures use their sense of smell, following the scent of decay to its source.”

That’s a funny line, but as libertarians at nearby Cato could have explained, it contains a bit of an embedded fallacy. In Washington, the ultimate source of decay is not so much the lobbying but the government’s gathering unto itself an endless array of powers enabling it to punish some economic actors and reward others. Some of those sharp-clawed K Street raptors are looking for fresh carrion to drag back to their paying clients, but they wouldn’t find much to do if Congress and the White House weren’t willing to take down the prey for them. Other lobbyists–maybe we could pick some more admired bird to represent them?–work to keep their clients from becoming today’s lunch or tomorrow’s roadkill.

If you want to cut down on Washington’s growing flock of professional vultures, the best strategy is to cut off the carrion supply by shooing the government away from areas of life it shouldn’t be in.

Federal Firing Rate by Department

The VA scandal has prompted a debate about whether it should be easier to fire federal workers. I’ve argued that the firing rate for poor performance should be increased.

However, there can be no debate that the current firing rate is very low. In 2013 just 9,244 workers out of a civilian federal workforce of 1.87 million were fired for poor performance or misconduct, according to OPM data underlying this Govexec.com article by Eric Katz. That is a rate of just 0.49 percent, or 1 in 200 a year. Most federal firings are for misconduct, with a smaller share for poor performance.

The Govexec.com analysis found that firing rates by type of employee vary dramatically. Blue collar and lower GS levels (1-10) are many times more likely to be fired than higher GS levels (11-15) and those in the Senior Executive Service (SES). The GS 11-15 firing rate was just 0.14 percent, while the SES rate was just 0.09 percent. Just 7 out 7,940 SES employees got fired in 2013. What would Piketty say about that?

Govexec.com charted the firing rates by department, but part of the differences stemmed from the type of workforce each department has. So, instead, let’s focus on just the largest group of civilian workers in the government—the GS 11-15 group—and see how firing rates vary. These differences may tell us more about how employment cultures differ between departments.

Govexec.com kindly provided me their firing-by-department data sourced from the OPM. I combined that information with data from these OPM tables on total GS 11-15 employment by department.

The chart shows the results. Annual firing rates vary from a low of 0.07 percent in Transportation to high of 0.22 percent in Labor. In Transportation, just 9 out of 12,389 GS 11-15 workers were fired in 2013. In HUD it was just 7 out of 7,703. In Education it was 6 out of 3,477.

VA has one of the highest firing rates for this class of worker at 0.18 percent. But that’s still just 1 in 555 workers in 2013.

The Latest Travails of Rideshare Companies

Last week Uber CEO Travis Kalanick said that the technology company, which connects riders to drivers through its app, could enjoy a “record-breaking” valuation thanks to its latest attempt to raise money.

Yesterday, Bloomberg reported that Fidelity Investments “is competing to lead Uber Technologies Inc.’s new financing in a round that could value the ride-sharing service at about $17 billion.”

Bloomberg’s reporting went on to note that if valued at $17 billion, Uber would be more valuable than the car rental service Hertz and the technology and appliances retailer Best Buy.

The news of Uber’s possible $17 billion valuation comes in the wake of news highlighting how the company has run afoul of regulators and taxi drivers across the world.

Earlier this year in Illinois, both the state House of Representatives and Senate passed HB 4075 and HB 5331 by veto-proof margins. If signed by Gov. Pat Quinn, the bills would require that the rideshare service drivers pass a background check, have commercial liability insurance of at least $350,000, and be required to obtain a chauffeur’s license if they carry passengers for more than 18 hours a week. These chauffeurs’ licenses are not easy to get in Chicago, the only city in Illinois where rideshare companies operate. They require any driver to complete a chauffeur training course, pass a written test, and demonstrate proficiency in English. The manager of government affairs at Lyft, another company that offers a rideshare service, has claimed that the 18 hour per week regulation would affect the 63 percent of drivers who use Lyft in Chicago. Chicago lawmakers recently passed an ordinance regulating ridesharing, a move welcomed by Uber and Lyft, although the legislation will have to be brought into compliance with HB 4075 if it is signed into law.

Federal Employment by Department

We’ve learned about what a huge and dysfunctional agency Veterans Affairs is in recent weeks. I had not realized that the agency added 100,000 workers in just the past seven years.

How large is the VA compared to the rest of the federal bureaucracy? OPM publishes historical data here for the major departments, which I’ve summarized in the two figures below covering 1950 to 2012.

Figure 1: Splits total federal civilian (non-uniformed) employment into defense and nondefense. For nondefense, you can see the modest retrenchments under Reagan and Clinton, and you can see the expansions under Bush 1, Bush 2, and Obama.

Figure 2: Shows the breakdown by department, aside from defense. Veterans (blue line) is by far the largest nondefense department, with 69 percent more employees that second place Homeland Security (red line). One alarming trend is the rapid growth in Justice Department employment (black line), which has doubled since the late-1980s to 117,000 workers.

Data notes: For some departments created since 1950, such as Homeland, it looks like OPM extrapolated the time series backwards based on the original component agencies of the new department. For Transportation on the other hand, it looks like OPM represented employment as zero before it was created. I did one tweak to the OPM data, which was moving TSA from Transportation to DHS for 2002. 

Washington Should Stop Reassuring the Dependent Europeans

The president flew to Europe.  He planned to “soothe European friends,” declared the New York Times.  He aimed “to stress U.S. commitment” to the continent, said the Washington Post.

That’s certainly what the Europeans want to hear.  But they want “something concrete” rather than just “empty words,” explained Bohdan Szklarski of the University of Warsaw.  For most Europeans, especially in the east, that means the U.S. putting more boots on the ground.  Opined Heather Conley of the Center for Strategic and International Studies, reinforcement of the eastern border is required, “and potentially we’ll have to reinforce it for a very long time.”

Why?

The Baltic States are screaming for enhanced military protection.  Yet Estonia devotes just two percent of its GDP to defense.  Latvia spends .9 percent of its GDP on the military.  Lithuania commits .8 percent of its GDP on defense.

Poland may be the country most insistent about the necessity of American troops on along its border with Russia.  To its credit, Poland has been increasing military outlays, but it still falls short of NATO’s two percent objective.  Warsaw spent 1.8 percent last year. 

Washington Backs Egypt’s New Dictator

As expected, the presidential election in Egypt confirmed Abdel Fattah el-Sisi as the country’s new leader.  It was not exactly the model of a free and fair election.  Not only had el-Sisi, as the leader of the coup that ousted President Mohamed Morsi, been Egypt’s de facto ruler for months, but his military colleagues (and their weaponry) were firmly behind his presidential candidacy.  Security forces had killed hundreds of Muslim Brotherhood members, Morsi’s political base, and jailed thousands of others, including Morsi himself.  Subservient Egyptian judicial tribunals imposed death sentences on more than eight hundred regime opponents, following trials that did not meet even the most meager standards of due process, in just the past two months. 

Western observers, including a Cato colleague, noted the pervasive censorship in the weeks leading up to the election.  Government-run media outlets maintained a steady barrage of images vilifying Morsi and hailing el-Sisi as the savior of the nation.  The images in the so-called private outlets (the ones that the junta had not shut down) provided images and editorial commentary nearly indistinguishable from the official government publications.

Under such circumstances, the outcome was as predictable as the Crimean “referendum” that ratified Russia’s takeover.  El-Sisi won with nearly 93 percent of the vote.  The only flaw in this orchestrated farce was a low voter turnout, the one permissible way to protest Egypt’s slide back into dictatorship.  But while the Obama administration repeatedly and harshly criticized the electoral charade in Crimea, U.S. officials portrayed the Egyptian election as progress toward democracy.  There was a time when U.S. leaders routinely castigated bogus elections in communist countries that produced wildly lopsided majorities for the incumbent regime.  No such criticism was forthcoming in this case, just as Washington didn’t denounce the earlier balloting for the new Egyptian constitution that produced a 98 percent favorable vote. 

VA Scandal: Crisis of Big Government

Peggy Noonan’s op-ed on the weekend was titled “The VA Scandal Is a Crisis of Leadership.” Noonan discusses how President Obama “doesn’t do the plodding, unshowy, unromantic work of making government work.” Obama is not a good manager, and so scandals like the current one are to be expected.

I enjoy Noonan’s articles and her observations on Obama’s style are right on target, but her view about why the VA scandal happened is off the mark. The president does seem to spend his time giving speeches, strategizing politics, and playing golf rather than rolling up his shirt sleeves and fixing programs. He does seem to be “a show horse, not a workhorse,” as Noonan says. But that’s not why the VA scandal happened.

The VA situation is appalling, but it has common elements with scandals that happen under every president. Those elements include bureaucrats behaving selfishly, politicians promising reforms and not following through, federal workforce dysfunction, and the failed central planning of a complex industry. The VA scandal happened because the government is a giant monopoly with none of the built-in checks of the marketplace. Federal politicians themselves are not a check because they are too distracted and the government is far too large for them to keep track of.

Noonan says, “the president is an executive, and executives manage.” Really? He could efficiently manage the entire $3.5 trillion government and its 2.1 million workers and 2,200 programs? I doubt it. I think we could vote in the head of PWC as the next president, and we would still have scandal after scandal in Washington.

Noonan worked in the Reagan administration, and so she remembers the 1980’s HUD scandal. The shenanigans, waste, and bad behavior under Reagan’s HUD secretary Sam Pierce over eight years were jaw-dropping. HUD under Pierce was a cronyism factory for the secretary’s buddies and Republican donors. Tad DeHaven discusses the abuses in this essay.

Perhaps Ronald Reagan should have been a better manager. But he understood that the problem in Washington is far deeper than just a need to run things better, as many of his famous comments reveal:

Government is not a solution to our problem, government is the problem.”

No government ever voluntarily reduces itself in size. So governments’ programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth.”

The nine most terrifying words in the English language are: I’m from the government and I’m here to help.”