Tuesday, June 20, 2017

The Bureaucrats Will Scuttle Trump's Trillion-Dollar Infrastructure Boondoggl - by Gary North

Pres. Trump has proposed a $1 trillion boondoggle. He wants to spend this money on infrastructure. This is going to put Obama's shovel-ready, anti-recession boondoggle to shame.
Only it isn't going to happen. It didn't happen for Obama, either. Here is what happened -- or didn't happen.
Back in 2009, former President Barack Obama made some lofty promises about the infrastructure overhaul that his $800 billion economic stimulus plan would provide. Obama used the phrase “shovel-ready projects” in reference to construction projects that could begin right away.
In the end, however, only $98.3 billion of the $800 billion stimulus was dedicated to transportation and infrastructure. Of that $98.3 billion, only about $27.5 billion was actually spent on transportation infrastructure projects. Why?
“The problem is that spending it out takes a long time, because there’s really nothing – there’s no such thing as shovel-ready projects,” Obama said in a 2010 interview with the New York Times.
When it comes to economic stimulus, local governments may take years to begin actual construction even once they receive funding. The reason why such a small portion of the American Recovery and Reinvestment Act of 2009 ended up spent on infrastructure is that the projects are simply too slow to get off the ground to provide meaningful near-term stimulus.
That was Obama, who had a majority in both Houses of Congress and an electorate in panic mode over a recession. Here is what Trump has.
First, he is so tied up with special prosecutors and investigators that he is never going to get anything through Congress. For the next 3 1/2 years, there will be no major Trump political victories. Count on it.
Second, bureaucracies at the state and federal level are going to see to it that not one of his projects is launched, let alone completed. Even if he gets this boondoggle through Congress, which he won't, it will do his legacy no good. Another President, probably elected in 2024, will get the credit. But I may be too optimistic. Maybe it will be the President who is elected in 2032.
Trump is frustrated. I can hardly blame him. In a recent post on the White House website, he offered this cry of woe.
We are here today to focus on solving one of the biggest obstacles to creating this new and desperately needed infrastructure, and that is the painfully slow, costly, and time-consuming process of getting permits and approvals to build. And I also knew that from the private sector. It is a long, slow, unnecessarily burdensome process.
My administration is committed to ending these terrible delays once and for all. The excruciating wait time for permitting has inflicted enormous financial pain to cities and states all throughout our nation and has blocked many important projects from ever getting off the ground. Many, many projects are long gone because they couldn’t get permits and there was no reason for it. . . .
For too long, America has poured trillions and trillions of dollars into rebuilding foreign countries while allowing our own country -- the country that we love -- and its infrastructure to fall into a state of total disrepair. We have structurally deficient bridges, clogged roads, crumbling dams and locks. Our rivers are in trouble. Our railways are aging. And chronic traffic that slows commerce and diminishes our citizens' quality of life. Other than that, we’re doing very well.
Instead of rebuilding our country, Washington has spent decades building a dense thicket of rules, regulations and red tape. It took only four years to build the Golden Gate Bridge and five years to build the Hoover Dam and less than one year to build the Empire State Building. People don’t believe that. It took less than one year. But today, it can take 10 years and far more than that just to get the approvals and permits needed to build a major infrastructure project.
These charts beside me are actually a simplified version of our highway permitting process. It includes 16 different approvals involving 10 different federal agencies being governed by 26 different statutes.
As one example -- and this happened just 30 minutes ago -- I was sitting with a great group of people responsible for their state’s economic development and roadways. All of you are in the room now. And one gentleman from Maryland was talking about an 18-mile road. And he brought with him some of the approvals that they’ve gotten and paid for. They spent $29 million for an environmental report, weighing 70 pounds and costing $24,000 per page.
And I said, do me a favor. I’m going to make a speech in a little while. Do you mind if I take that and show it? So I’m going to show it. So they spent millions and millions of dollars. When I said, how long has this short roadway been talked about, the gentleman said, well, if you say 20 years, you’re safe. I said, yeah, don’t say anymore because I have to be -- you know, I have to be exactly accurate with these people. I was off by like two months -- it’s a major front-page story.
But these binders on the stage could be replaced by just a few simple pages, and it would be just as good. It was actually be much better. Because these binders also make you do unnecessary things that cost billions and billions of dollars and they actually make it worse.
As another example, the 23 -- if you look at it, in Ohio, the Ohio River Bridge -- $2.3 billion. The project amassed a 150,000-page administrative record -- 150,000 pages is a five-story-tall building. Think of it. If you put the paper together, it’s a five-story building.
The monstrosity of the federal bureaucracy is unstoppable. Trump will not change it. No one will change it. Only one thing will change it: the bankruptcy of the federal government. That day is coming a lot sooner than most politicians in Washington are willing to admit or even consider.
The federal government is a blind, lumbering giant. There is no central plan. There is no willingness in Congress to cut the budgets of any of the bureaucracies. The civil courts are clogged with other issues besides bureaucratic issues. The paperwork gets more obscene in its magnitude. This paperwork is never reduced; it always increases.
The bureaucrats have created lifetime employment for themselves. All they have to do is drag their feet. They need only require another form. Then require another study. They have the power to block virtually any project. This is not a hypothetical power. This power is used continually. The longer they delay the implementation of any project, the longer their careers will last. The more forms they require, the more employees they hire. The more employees they hire, the faster they get their promotions.
This is an inherently unsolvable problem. The great German sociologist Max Weber gave a speech on this in 1909. His words were prophetic. We are becoming ancient Egypt.
Take as an extreme example the authoritative power of the State or of the municipality in a monarchical constitution: it is strikingly reminiscent of the ancient kingdom of Egypt, in which the system of the ‘minor official’ prevailed at all levels. To this day there has never existed a bureaucracy which could compare with that of Egypt. This is known to everyone who knows the social history of ancient times; and it is equally apparent that to-day we are proceeding towards an evolution which resembles that system in every detail, except that it is built on other foundations, on technically more perfect, more rationalized, and therefore much more mechanized foundations. The problem which beset us now is not: how can this evolution be changed?—for that is impossible, but what will come of it?
We willingly admit that there are honourable and talented men at the top of our administration; that in spite of all the exceptions such people have opportunities to rise in the official hierarchy, just as the universities, for instance, claim that, in spite of all the exceptions, they constitute a chance of selection for talent. But horrible as the thought is that the world may one day be peopled with professors (laughter)—we would retire on to a desert island if such a thing were to happen (laughter)—it is still more horrible to think that the world could one day be filled with nothing but those little cogs, little men clinging to little jobs and striving towards bigger ones—a state of affairs which is to be seen once more, as in the Egyptian records, playing an ever-increasing part in the spirit of our present administrative system, and specially of its offspring, the students.
This passion for bureaucracy, as we have heard it expressed here, is enough to drive one to despair. It is as if in politics the spectre of timidity—which has in any case always been rather a good standby for the German—were to stand alone at the helm; as if we were deliberately to become men who need ‘order’ and nothing but order, who become nervous and cowardly if for one moment this order wavers, and helpless if they are torn away from their total incorporation in it. That the world should know no men but these: it is in such an evolution that we are already caught up, and the great question is therefore not how we can promote and hasten it, but what can we oppose to this machinery in order to keep a portion of mankind free from this parceling-out of the soul, from this supreme mastery of the bureaucratic way of life. The answer to this question to-day clearly does not lie here.
This is one of the greatest phrases in the history of academic rhetoric: parceling out of the soul.
In 1976, I published a chapter on bureaucracy in a book I edited. I began the chapter with this quotation. It is more relevant today than it was in 1976. It was more relevant in 1976 than it was in 1909.
I realize that a lot of people think that the federal government is becoming ever more true radical, ever more a threat to our liberties. Yes, very slowly the government is expanding. But it is the expansion of the cancer, not a systematic conspiracy of an elite. It is the expansion of 1,000 or 100,000 tenured cancer cells, each working systematically to expand its consumption of resources, each competing with all the others for its share of the weakening host.
This is no more reversible today by political means than it was in 1909. Trump is going to be thwarted. So is his successor. So is the successor's successor.
At some point, the host will die. The cancer cells are triumphant, only to die. I call this the Great Default. When the federal budget is consumed by Social Security, Medicare, Medicaid, the Pentagon, and interest on the federal debt, Congress is going to trim the budgets of the bureaucracies. The political battles of the next three decades are going to be fought over which bureaucracy gets what percentage of the remaining budget, most of which will be borrowed, either from naïve investors or the Federal Reserve System.
The reason why I don't worry about what the Democrats will do after Trump is out of office is this: the bureaucrats will always be the winners. They will move with all deliberate speed. They are permanent. Politicians come and go. Even the politicians who come and don't go have approximately zero authority over the tenured bureaucrats who occupy the federal executive bureaucracies. As long as Congress passes the budget of a bureaucracy, it has zero authority over that bureaucracy. As long as Congress authorizes the budget request, it provides positive sanctions for everything going on inside that bureaucracy, most of which is invisible even to the senior official of the bureaucracy.
The bad news is this: all hope of political reform in Washington is futile. The good news is this: all hope of political reform in Washington is futile. Here is why.