Back to articles

The Scarf State

Bureaucratic Malaise
 

Captain C B Sullenberger, III and his crew of US Airways Flight 1549 are admired through the whole civilized world for their controlled crash-landing on the Hudson River. Their skill, professionalism and humanity make them authentic heroes. It could have gone the way of Air France 447 with no survivors.

Harry Markopolos is the former securities industry executive who while working for Rampart Investment Management Company in 1999 outed Bernard Madoff to the SEC. He too is heroic, at least in the whistle-blowing sense.

Captain Sullenberger and crew, and this gentleman, are good decent people doing the right thing at the right time. They deserve accolades and they’re not alone. The world is peopled with competent honest champions. People trying to do the right thing are often bulldozed, silenced or ignored by governments or  private institutions. Harry Markopolos exposed Madoff’s billion dollar ponzi scheme, put himself in harm’s way, and for a myriad of reasons, the SEC did nothing.

The reason for the SEC’s existence is to prevent this very sort of ethno-nepotistic pyramid scheme which the Madoff scandal represents. It was at once premeditated, long exposed as fraud and easy to prosecute. No excuses for the SEC exist.

Just as the SEC was established to stop confidence intrigues, in this same sense, the CIA was created to prevent another Pearl Harbor. In a world with any common sense left in it, the weeks following 9/11 it should have been dismantled. Despite its huge budgets, it succeeded in doing little against Al-Qaeda, the Taliban or Saudi’s export of radical Islamists for fear of the Wahhabi Islamic minority. Through two decades of CIA’s support of the Mujahideen in Afghanistan, it help create, coordinate and spread global Islamic extremism with the help of the Saudis and the Pakistanis. It would have been nice to nip that one early. But no, the government is often shortsighted in these types of issues.

The Federal Reserve System was created in 1913 to prevent a ruinous event like the Great Depression. Sometime after 1929, it should have ceased to exist. Instead, for the last 70 years it has grown exponentially. It has unthinkingly expanded the money supply and extended cheap credit. Not once in the last 30 years has it significantly contracted the money supply. If you’re going to do nothing and leave everything unregulated, why have a Federal Reserve System at all?

The SEC, CIA and the Fed aren’t going to be eliminated no matter how much they mess up. Some other radical solutions to uncovering fraud in the markets, gathering international information and managing the banking system has to be created. After all, a failure’s a failure. The continual massive dereliction of government agencies reflects a basic underlying law at work: Bureaucratic Malaise.

This unhealthy lifestyle of the state leads to the disease bureausclerosis. It’s the tendency of bureaucracy to standardize over time. The state experiences a hardening of rules and the inability to change. It becomes impassive to people’s needs and generally melds with those industries they monitor. Bureausclerosis causes stagnation, dissolution and eventually death of the open societies.

The way of the federal and state agencies is existential bankruptcy. They cannot be dynamic and creative except in their first fleeting moments. They – every last one of them – should have sunset clauses. Every agency should come up for review every 8 to 10 years.

In recent years, consolidated federal financial audits in the G8 and other industrialized nations have been revealing high percentages of missing taxpayers money, even gold bullion. For governments, economic failure or success, has little to do with its overall survival. In times of boom, governments expand. In times of bust, governments expand. Why watch the dime?

What if the state inadvertently caused a crisis which allowed it to expand?

Not to encourage conspiracies, but that would be self-serving.

Nonetheless, this is exactly what has happened on so many occasions.

Bureaucratic government is a living organism which of its own accord constantly expands and evolves with its own agenda. If we think it follows our wishes, it often does. More importantly, it always comprehends its own interests clearest. The bigger it is, the more unwielding it becomes. One hidden law of government surpasses all others: ‘No matter what the failure, how catastrophic, how utterly culpable the particular agency was to prevent it, the bureau will morph into a larger more lethal and incompetent servant with every passing emergency.’ It becomes a giant parasite waiting in the wings for the right moment to hear, see and know nothing.

Modern bureaucracy: the global warming of the state.

The more wealth we have, the more government we demand. Almost every decent person wants a social safety-net. In an economic turndown, we wonder what we’re doing. Should the state spend more or less? Should we chalk up an even greater debt?

For sometime I’ve maintained that devoid of accumulated national and provincial debts, Canada would emerge from this crisis as the strongest economy in the world. But more of this at another time; we would at least be in league with Japan and China.

By all means buy government services. Let us be a just society; but let us also follow two or three essential rules: pay as you go, (i.e., no deficits);  use a flat tax, (i.e., no consumer taxes); have sunset clauses on every single agency, (i.e., accept the fact that we collectively make mistakes sometimes and that certain things that the state attempts to do, because of abuse or the nature of the service just can’t be worked out). Demand more for your tax dollars. Make workers in the public sphere adhere to private-sector standards on benefits and absenteeism with restrictions on striking if they supply the only service available.

Control the bureaucracy or it will control you!

P.S. I used the word scarf here to mean, "masturbating while strangling oneself".

Back to articles