Survival of the Least Fit

     In the real world, that of nature and of free enterprise, the law of natural selection applies, that is the law of the - Survival of the Most Fit. In the unreal world of socialism and big government this fundamental law morphs into the law of unnatural selection, that is the law of the - Survival of the Least Fit.

     Here in Massachusetts, in August of 2012, another new health care law came into existence – “An act improving the quality of health care and reducing costs through increased transparency, efficiency and innovation”. Reminds me of the good old days of the Cold War, when the very undemocratic communist regimes around the world, called themselves “the People’s Republic” or better yet “the People’s Democratic Republic.” Hide the truth behind some popular euphemism, or “repeat a lie often enough and the people will begin to believe it.”

     Along with this “act” came another agency, “The ‘center for health information and analysis’ – isn’t that the division of health care finance and policy that was on the scene when health care costs in Massachusetts became the highest in the nation? And there are two new state agencies created by the law without getting rid of any old ones. [Emphasis mine]
     “The new law is the latest in a series of government interventions into the state’s health care market that far from bringing costs down, seem to be driving them up.
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     “The madman looks out the window and, after noticing that sidewalks are always wet when it rains, concludes that wet sidewalks cause rain. Legislators who persist in thinking that more regulation is the solution to high health care costs may similarly be mistaking cause and effect.” (Ref. 1)

     A perfect example of a federal agency that has to make work to justify its existence and its budget is the Equal Employment Opportunity Commission (EEOC). “Back during the Clinton years the EEOC went after Hooters for its alleged hiring bias . . . Hooters refused to hire men to wear the infamous ‘orange short-shorts and white tank-top’ ensemble. The EEOC spent four years {and God knows how much taxpayer money} pressuring them to hire male waiters, which would have ruined the Hooters concept.
     “Hooters tried reasoning and logic. As one would expect when dealing with bureaucrats, they failed miserably. So Hooters turned to another weapon: mockery.
     “They put up billboards showing what a hairy, beer-bellied guy would actually look like in Hooters garb. They took out newspaper ads showing a bearded guy in a blonde wig and Hooters T-shirt saying ‘Come on, Washington. Get a grip.’
     “It worked. The EEOC stayed just as stupid – still insisting that Hooters was doing something wrong – but it became clear that if they kept pushing the stupidity, Congress might step up and take away some of their power. So the EEOC ‘quietly ended its investigation.’” (Ref. 2)

     One would think that the EEOC would have learned its lesson. Ah, but this is a federal agency. Intelligence and common sense are not prerequisites for the agency’s existence. The continued existence of an agency such as the EEOC depends upon finding and prosecuting anyone even suspected of non-compliance, no matter whether this pursuit conforms to common sense or not. So, early in 2012, the EEOC decided to go after the 29-store Marylou’s coffee shop chain in southeastern Massachusetts because most of the employees dispensing coffee are young, female, pink-clad clerks. It’s suspected that the EEOC is investigating Marylou’s because it’s much smaller than companies such as Hooters and therefore not able to afford to defend itself as vigorously. It should be noted that the EEOC is not investigating Marylou’s because of any complaints of hiring or employment discrimination – it decided to investigate Marylou’s on its own in what it calls “systemic cases.” Actions like this smack of an “if there’s no problem evident, see if you can create one” approach. Remember, if the EEOC doesn’t get enough complaints to investigate, its budget will shrink, its size will be reduced, and its power will diminish. Heaven forbid that a government agency should have its budget reduced, be downsized, or even eliminated!

     “The agency’s hard-line tack has incensed local business groups as well as Marylou’s, who say that law-abiding companies are being needlessly harassed and forced to run up legal bills.” The company was founded and is run by a woman, Marylou Sandry. “This is a woman who founded a company that went on to employ hundreds of people. . . . She should be spending her time building her stores and hiring more people – not being treated as the enemy of the federal government.” The head of the local EEOC office “said fishing for cases of discrimination and even soliciting victims – rather than just waiting for people to report they’ve been wronged – is a growing part of the agency’s mission.” Hallelujah! If no one files a complaint, then go out and convince someone to complain in order to justify your existence. “Anybody with a shred of common sense understands that it’s Marylou’s business model to hire young, cute females to sell coffee. If that’s their business model, and it works, they should be cheered on and we should congratulate them. The EEOC should butt out.” (Ref. 3) The EEOC “is on a fishing expedition to justify bureaucrats’ jobs. . . . Field offices of the Equal Employment Opportunity Commission are looking high and low for class-action-type cases against marquee employers - all part of the agency’s effort to score big headlines and rake in money penalties .” (Ref. 4)

     "’Nothing is more permanent than a temporary government programme,’ said the economist Milton Friedman.” (Ref. 5)

     In the private sector of the economy, companies exist in order to provide goods and/or services that, in turn, result in revenues to reward the owners of the company. If company income is inadequate, it may be downsized to reduce costs or it may even be shut down. When buggy whips became superfluous with the advent of the automobile, buggy whip companies went out of business. In tough economic times, companies downsize all the time. Government agencies are under no such economic pressures. After its creation, the objective of a government agency is to grow or, at least, to survive forever. The rules of a free market economy do not apply to these entities.

     “Our government bureaucracies are resilient, but in all the wrong ways. The worst agency structures, cultures, and practices seem to grow back like weeds, no matter how hard reformers try to kill them. Ineffective agencies never die, bad employees never leave, and innovation is often short-lived, sucked into the hole of ‘the way things are done around here.’” (Ref. 6)

     As “President Reagan said, there’s nothing closer on Earth to eternal life than a temporary government program.
     The Election Assistance Commission {EAC} once was categorized as a ‘temporary’ agency, authorized to operate for only three years. Nine years later, the story of this hapless agency has become a fascinating Washington tale of do-gooder intentions run amok, politics trumping good management, out-of-control spending, and federal programs expanding even after their mission had vanished. The EAC is an object lesson of how difficult it will be to reduce any federal spending and to downsize or eliminate federal programs.
     “The creation of the Election Assistance Commission dates back to the red-hot political battle that followed the 2000 presidential election. Angry liberal groups demanded the creation of a new program to oversee federal elections, which historically has been a state responsibility.
     “The EAC was intended to modernize state election equipment across the country. In 2002, the 'Help America Vote Act' was passed, creating the agency but giving it a strict limit of three years of existence. To help states upgrade their equipment, the EAC doled out a staggering $4 billion.
     “The commission distributed its allotted money and completed its studies. Yet it is still operating in 2011 — an agency without a mission with nearly 50 full-time federal employees. Its budget has doubled to $18 million, without having anything to do.
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     “Even by Washington standards, the EAC has been a spectacular mess. But that hasn’t stopped the agency from continuing on — or living lavishly. Half of its staff earn six-figure salaries. It is top heavy, with two of every three employees serving as executives. Only one out of three actually work on real programs.
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     “By far the most important failure is that of hiring simple competency. Its appointed commissioners knew little about elections: of nine commissioners who have served there, only two ever served as election officials.
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     {Clearly,} “This is an entity that has no business staying in business. . . . If we can’t eliminate the EAC, we can’t eliminate anything.” (Ref. 7) Unfortunately, the same can be said for many government agencies and government programs. And the reality is that government agencies and programs cannot be eliminated when they no longer have any use and they cannot even be reduced in size when the need for them diminishes. These are like living entities that fight to survive past the point in time when they should have been laid to rest.

     Exactly who is in charge of these agencies. It's obviously not the people you and I elect. Here are just two examples of federal government agencies working to thwart the wishes of our elected congressmen and senators.

1) President Obama’s Department of Health and Human Resources (HHR) released an official directive that guts the work requirements that have been the foundation of the bi-partisan welfare reform law of 1996 – one of the all-time most successful domestic policy reforms.

2) In 2010, the Senate rejected the President’s cap-and-trade plan which would have increased the cost of goods to the American public and would have placed America's private companies at a competitive disadvantage in world competition. But under president Obama, the bureaucrats in the Environmental Protection Agency (EPA) simply issued the same plan as a regulation with the force of law, thereby negating the decision by our elected representatives to kill the plan.

     How can we stop government agencies from perpetuating themselves? One way is to enact sunset provisions when these agencies are created. Similarly, government programs should also contain sunset provisions when these programs are initiated. “The sunset concept provides for programs and agencies to terminate automatically on a periodic basis unless explicitly renewed by law. In recent years bills to create a federal sunset commission, modeled on the sunset review process in Texas, have been introduced. President Bush called for creation of a federal sunset commission in his FY2006 budget submission.” (Ref. 8)

     “The Texas Sunset provision was established in 1977. Under Texas law, all agencies – except universities, courts, and agencies established by the Texas Constitution – will be abolished on a specific date, generally 12 years after creation or renewal, unless the Texas Legislature passes specific legislation to continue its functions.” (Ref. 9)

     “It is illustrative to contrast dynamic private industries with the ‘government industry.’ In the private sector, companies are routinely put out of business, or ‘sunset,’ by new firms that better serve the public. . . . This is good news for the overall economy because it means that more efficient retailers have arrived on the scene . . . Businesses also get sunset if they follow shoddy financial practices . . .
     “Roughly 10 percent of U.S. business establishments go out of business each year, and roughly 10 percent of all private sector jobs disappear due to business contractions and failures. Clearly, businesses and private sector workers are under a constant threat of sunsetting.
     “By contrast, there is no structured method to sunset federal agencies when they are no longer useful or when more efficient private alternatives become available. In addition, federal agencies are often dreadful financial performers, but face no effective sanction to enforce better results. . . . Policymakers need a process to sunset . . . the many . . . failed and futile programs in the . . . federal empire.
     “The executive branch of government currently has no mechanism to create the constant renewal that every organization needs in our fast-changing modern society. Government agencies are the only organizations in society that can have immortality without good performance. Government employees are the only workers with near guarantees of lifetime jobs regardless of performance. In the private sector, poor performers are routinely weeded out and resources shifted to more productive activities. A federal sunset law could help bring that same healthy process of renewal to the government sector.” (Ref. 10)

     Government agencies are self-perpetuating. Their primary objectives are to continue in existence forever and, if possible, to grow. In that sense they behave like any other living creature whose goals are to survive and procreate. In order to justify their existence, these agencies must, at a minimum, not lose clients or encounter other reasons to shrink. Better yet, they should enroll new clients so that they can grow accordingly.

     Let’s consider those federal agencies tasked with the management of this nation’s entitlement programs. One might think that a meaningful objective of these agencies and their programs would be to help those citizens in need of temporary government assistance and to the aid them in returning to self-dependency once their temporary need was over. True, there would be some that would need more than temporary assistance and they would need to remain in the entitlement programs for longer spans of time or perhaps even permanently. But, the majority of entitlement recipients should be in need of assistance only on a temporary basis. Historical evidence clearly supports this contention.

     Now, take a look at the reality of our federal entitlement programs and the agencies that administer them. In 1962, 28.3% of total federal spending went to dependence programs. By 2010, this number jumped by 250% to 70.5% of total federal spending!!! Today, more than one in five Americans relies on government assistance. Over the year from the spring of 2011 to the spring of 2012, “dependence” jumped another 8.1%! (Ref. 11) Are these statistics the result of an explosion in the number of Americans requiring government assistance? Does it appear that everyone around you is out of work, hungry, homeless, sick, and destitute? Not likely! Is this growth in entitlement handouts partially or largely the result of federal entitlement agencies working overtime to enlarge their customer base and to maintain their clients in a state of dependency in order to justify the permanence and the growth of these agencies? Highly likely! Ask yourselves the following questions. How many people do I know that have received some form of government assistance but could have done without the assistance if it were unavailable? How many people do I know that have received some form of government assistance that honestly should not have been entitled to the assistance? How many people do I know that have received unemployment compensation because they preferred to temporarily get paid for not working rather than seriously looking for employment, i.e. they wanted a taxpayer funded paid vacation? How many people do I know that believe that you are a sucker if you don’t take advantage of government handouts even if you don’t need them?

     What’s the difference between a government agency or program and those in the private sector? Consider the following fable.

     Many years ago, a poor immigrant from arrived in America from his village in Eastern Europe. In the old country, he was a wagon driver. But America had progressed from horse drawn wagons to motorized busses, so he went to school to learn to be a bus driver. After his first day driving a bus, he returned to the garage and handed in his day’s fares, totaling some $500. The bookkeeper was shocked, explaining that no one on that route had ever taken in more than $50 in a single day, She asked the former wagon driver how he done so well.

     The former wagon driver explained, saying. “I drove the route for about an hour, but there were very few people that wanted to ride. So, I went off the route and just took people wherever they wanted to go. It took longer, but it made everyone happy, there were a lot more riders, and I took in a lot more money.”

     The bus company, with its fixed routes, its rules and regulations, and the drivers who follow all the rules, regulations and fixed routes are our government. The wagon driver is free enterprise. Good service and good products count. Which does the most good – the government that doesn’t satisfy the needs of its customers or the private company that caters to its customers, their needs, their comfort and their preferences?

     Government agencies and programs serve their own needs – to continue in existence, to grow as much as possible, to not make waves. Good companies serve the needs of their customers and their owners – the first being the most important, for if they fail to satisfy their customers, there is no financial reward for the companies’ owners and no jobs for the companies’ employees. Good companies need to continually improve, to innovate, to make waves – or else another company will replace them. The marketplace continually monitors the companies’ performance and quickly rewards or punishes them. Government agencies have no competitors, no feedback mechanisms to monitor and evaluate their performance. They exist simply to perpetuate themselves.

     I worked for many years in the private sector, managing programs and projects. The programs I managed had a start, a period of execution and an end. At the beginning, the end product or service was defined and the budget and the period of performance were specified. The defined objective of the program was to deliver a product or a service to specification, within budget and on time. At the start of the program, the program plan was defined – the step-by-step development of the product or service, the schedule, the spending plan, and the identification of the resources needed to achieve the end result. The program was monitored throughout – weekly, monthly and quarterly reviews and reports.

     The program termination was as critical an element as any other part of the program. The program had to finish on-time, within budget and deliver a product or service to the customer that satisfied him. Concurrently, project personnel had to be reassigned or released. All materials and goods used on the project had to be accounted for.

     The first problem with government agencies and programs is that many do not establish the correct goals. Should the goal of an entitlement program be to grow the program and keep the recipients on the program for as long as possible or should the goal be to provide the majority with temporary aid and then help them to eliminate the need for receiving the assistance?

     A second problem with government agencies and programs concerns the issues of reporting, monitoring, feedback and control. I claim that most, if not all, of these requirements are absent. Who is the watchdog over these agencies and programs? It’s the government bureaucracy itself which is akin to placing a fox in the henhouse to watch over the chickens.

     Shrinking a government agency or program is a calamity in the public sector. To end them is viewed as a disaster. There are pleas to Congressmen and Senators to: save the government employees’ jobs by the public service employee unions, stop the cutbacks or cutoffs in appropriations by the agency or program advocates, and prevent the reduction or elimination of the funds or services by the program/agency clients and their advocates. In the government world, the end of a program or an agency is something to be avoided at all costs. The impetus to shut down a government program or agency is non-existent. Instead, the opposite is true – survive, perpetuate, grow. That is one of the major problems with these programs and agencies. In the private sector, the pressure to terminate a program or organization within a company comes from the customer, the management and the owners. Who applies similar pressures in the world of federal, state and local government? Occasionally, but not often enough, such pressures are brought to bear by disgruntled taxpayers. Rarely is this the case with regard to federal programs/agencies; sometimes it happens at the state level, and most frequently at the local level, where the taxpayer is much closer to the problem.

     Let’s compare the features of a government agency or program with those in the private sector.

Feature	Government	Private Sector
Objectives	Stay alive; Grow	Deliver: On-time
		Deliver: Within Budget
		Deliver: To Specification
Closely Monitored?	No	Yes
Quantitative Evaluation?	No	Yes
Defined Termination?	No	Yes
Independent Reviewers?	No	Yes – Corporate officers/owners

     What can be done? One possible solution is to fund private organizations with the task of overseeing the agencies and programs of the government. Have these agencies report to the legislative branch of government, rather than the executive branch. BUT, keep the politicians out of the loop. Award oversight and monitoring contracts to these companies on a competitive basis. Provide them with incentives to reduce the size and number of government agencies. Let them put some private sector incentives and controls in place. Let them substitute for the corporate management and corporate ownership of the private sector. Let’s apply some free market principles to the operation of our government. Another worthwhile action is to impose "sunset provisions" on every government program and agency. Every government agency and program would automatically terminate on a specified date unless reviewed and extended for another specific period of time.

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References:

1. Health ‘reform’ law deja-vu (again), Cornelius Chapman, Boston Herald, Page 15, 23 August 2012.
2. Perk on, Marylou’s, Michael Graham, Boston Herald, Page 23, 25 May 2012.
3. EEOC Defends Marylou’s Hiring Probe, John Zaremba, Boston Herald, Page 5, 8 June 2012.
4. ’Everybody’s on our side’, John Zaremba and Christine McConville, Boston Herald, Page 5, 25 May 2012.
5. Into the sunset, Around the World in 80 Ideas; http://www.adamsmith.org/80ideas/idea/4.htm, Accessed 28 August 2012.
6. Resilience Is Not Enough, Amy B. Zegart, Hoover Digest: 2012 No. 3; http://www.hoover.org/publications/hooverdigest/article/124931 , 13 August 2012.
7. The Agency That Would Not Die, Richard Pollock, PJ Media; http://pjmedia.com/blog/the-agency-that-would-not-die/2/, 17 May 2011.
8. A Sunset Commission for the Federal Government: Recent Developments, Virginia A. McMurtry, UNT Digital Library; http://digital.library.unt.edu/ark:/67531/metacrs7742/, 11 August 2005.
9. Sunset provision, Virginia A. McMurtry, Wikipedia; http://en.wikipedia.org/wiki/Sunset_provision, Accessed 28 August 2012.
10. “Sunsetting” to Reform and Abolish Federal Agencies, Chris Edwards, CATO Institute: Tax & Budget Bulletin; No. 6; http://www.cato.org/pubs/tbb/tbb-0205-6.pdf, May 2002.
11. Destructive Dependence, Heritage Members News, Page 4, 8 June 2012.