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Forty Years of Marginal Reforms

Nothing makes conditions more unbearable than the knowledge that no effort of ours can change them.”

—Friedrich Hayek

America’s governing philosophy began to leave the rails about five decades ago. The tumultuous decade of the 1960s resulted in important improvements to the social contract, including civil rights, environmental protection, and product safety. Almost as an afterthought, reformers also changed how government made decisions day to day. How could those prior practices have persisted for so long? While we’re rewriting codes, reformers concluded, let’s modernize the operating philosophy of government to preclude bad values ever again.

The philosophy of correctness was born. Law going forward would be like an instruction manual. Once law is perfectly clear, people will know exactly what to do. Bureaucrats would be more like workers on an assembly line. It’s too dangerous to let officials be arbiters of right and wrong.

In the excitement over broad purification of government, the Supreme Court soon expanded the coverage of “due process”—the constitutional guarantee against the state improperly putting us in jail or taking our property—to daily management choices in schools and agencies. Any aggrieved person had the right to challenge a decision. The onus was on the official or employer to demonstrate that the decision was proper.

This shift in operating philosophy didn’t generally make the front pages. I was in law school at the time, and pretty much everyone accepted these changes as prudent safeguards to abusive authority. Liberals were the main drivers of this new way of governing, as they were of the civil rights and environmental reforms. But conservatives saw a silver lining in detailed rules and rights. Clear lines would prevent officials from overstepping their bounds; business too could assert its rights. Who can be against “clear law” or “individual rights”?

Controlling small incidents of life was a dramatic expansion of legal reach beyond anything contemplated even by central planners. Only people who have spent their lives in a bureaucracy could think that it is helpful to mandate, as worker safety regulations do, seven pages of rules on ladders.

The idea of using law to redress ordinary disagreements in schools and the workplace soon infected the broader culture. People with a certain disposition, for example, began to threaten schools with claims that their child was treated unfairly, including over grades and extracurricular activities.

Almost immediately, Americans began to react against Big Brother breathing down their necks. A Harris poll in 1973 found that a “crisis of the most serious magnitude” was brewing in citizen dissatisfaction toward government—a stark reversal of attitudes only a decade earlier. The poll also revealed a sharp divergence between the discontent of citizens and the complacency of political leaders, who saw no serious issues with government.

In ten of the next eleven presidential elections, starting with Jimmy Carter in 1978, Americans elected outsider candidates who promised to get government off our backs. (George H. W. Bush was the sole exception, and he ran as Reagan’s successor). None have succeeded.

Jimmy Carter came to Washington promising “to reorganize a Federal Government which had grown more preoccupied with its own bureaucratic needs than with those of the people.” With ideas from his domestic policy adviser Stu Eizenstat, Carter deregulated several industries, including airlines, trucking, railroads, and beer. He also initiated the “senior executive service” to promote leadership within agencies. Carter had a sense that government was out of control, leading to a broader sense of futility within society. He made sunset laws a priority, writing to Congress in 1979: “Too many Federal programs have been allowed to continue indefinitely without examining whether they are accomplishing what they were meant to do.” But that effort stalled, and his ambitious domestic agenda in his one term is largely overshadowed by the Iran hostage crisis and the “stagflation” that doomed a second term.

Ronald Reagan asserted in his first inaugural address that “in this present crisis, government is not the solution to our problem; government is the problem.” By executive order in 1982 he created the Grace Commission, headed by corporate leader J. Peter Grace, and tasked it with identifying waste in the federal government—“a problem that’s been 40 years in the making,” Reagan declared. In January 1984, the Commission released a 656-page report proposing almost 2,500 reforms. Some of these were implemented by executive order, and Congress in 1988 authorized another of its cost-saving proposals—“base closing commissions” to make politically difficult decisions about which defense bases should be closed. The Commission focused on specific public management inefficiencies, however, not on how Washington governed.

Bill Clinton came to office advocating a “third way” to deal with government ineffectiveness, and empowered Vice President Al Gore to lead the charge. Instead of tackling a long list of inefficient programs, as the Grace Commission did, Gore’s “reinventing government” program in the 1990s looked more broadly at how decisions were made. Procurement officers were given freedom to buy products off the shelf, at a fraction of the price paid through formal bids. Social Security provided customer service that won awards in the private sector. Forms were simplified and consolidated in some agencies. Several pilot projects showed how regulation would be more effective by focusing on results instead of compliance. At the end of the day, however, the improvements were more pronounced in internal administration of government than, for example, in making regulation and permitting more practical for citizens.

George W. Bush had been a practical and effective governor of Texas, but didn’t seriously try to fix Washington. Where Al Gore might be mocked for being overly earnest in his pursuit of good government, George W. Bush under the tutelage of Karl Rove elevated the failure to fix problems as an accepted technique of cynical partisanship: propose an extreme bill that no moderate would support, and then blame the other side for not fixing the problem. I watched this firsthand when trying to lead medical malpractice reform. George W. Bush proposed a tort reform bill that he knew would fail, instead of a bill for reliable health courts that had bipartisan support. Then he blamed Democrats for not solving the problem.

Barack Obama was the freshest face since JFK, promising “change we can believe in.” He appointed the prolific law professor Cass Sunstein to the job of “regulatory czar.” Acting as a gatekeeper to new rules, Sunstein made new regulations less convoluted. Although he acknowledged the need for “retrospective review”—i.e., looking back at how regulations and programs actually work—Sunstein didn’t do much to clean out decades of accumulated regulations and processes. Nor did Sunstein, who advocates using law to “nudge” people towards sensible decisions, tackle the disastrous behavioral effects of a rigid regulatory system. Sunstein is so prolific that, like the body of law itself, he can be cited for almost any proposition. Sometimes he talks about the need for flexibility; at other times he talks about the virtues of clear rules. When he left government, Sunstein wrote Simpler, a book detailing how he and Obama had simplified government. “I must have missed that,” said one Washington insider.

Voters also missed Obama’s simplification of Washington. In the 2016 election, eight million Obama supporters turned around and voted for Donald Trump. Trump has proved disruptive, as many voters wanted. Playing the bull in a china shop, Trump has undone what was legally handy—for example, rescinding many Obama executive orders. He has also stimulated business initiatives by the clear signal that federal regulators will use a lighter touch with industry. But the core of Trump’s promise to “drain the swamp” is the same goal of deregulation that Republicans have sounded for decades.

Looking back at decades of reform promises, there was little in the way of an overarching theory to galvanize public support in the way that, say, the rights revolution did in the 1960s, or the progressive movement did at the turn of the last century. Efforts at reform in recent decades focused on specific rigidities, and were not more broadly aimed at, say, giving people responsibility to be sensible.

At this point neither political party has any serious proposal to fix Washington. An angry public is presented with cartoon clichés of reforms that can’t possibly work. Deregulation promises amputation, but that’s not the right cure for mindless bureaucracy; voters want clean air and clean water, safety oversight, and Medicare. That’s why deregulation goes nowhere even when Republicans are in control of Congress. Conversely, trying to prune the bureaucratic jungle, as we learned with President Obama, only has marginal impact. The overbearing rules just grow back with renewed density as bureaucrats obsessively clarify each new ambiguity.

Washington needs more than reform of the current system. It needs to make government work. That requires replacing its massive bureaucracy with a simpler structure that relinks real people with public goals. That’s why Washington will resist—not only will that put officials on the hot spot, but decades of arcane expertise will go down the drain. History indicates, however, that inertial forces can only keep the lid on broad discontent for so long. Public opinion is boiling. In 2016 voters elected someone who, by background and temperament, was literally inconceivable to the political establishment. Where will voters push the needle next? One thing seems clear: leadership will not come from the existing parties.