What to Do About Agency Capture

What to Do About Agency Capture
Then Republican vice presidential candidate Jack Kemp, former Secretary of Housing and Urban Development under President George H.W. Bush, gives a speech to a crowd of about 300 at a Labor Day block party, in Flint, Mich., on Sept. 2, 1996. (Matt Campbell/AFP via Getty Images)
Jeffrey A. Tucker
11/3/2023
Updated:
11/6/2023
0:00
Commentary

Let’s just dig beneath the headlines for a bit, especially the ones celebrating or condemning this or that head of a federal government agency (it applies to state governments, too).

The truth is that they have little to no power. They are always outsmarted by the embedded bureaucracy with institutional knowledge. They learn very quickly that if they want to keep their jobs, their best strategy is to do nothing but make speeches and issue statements celebrating themselves.

The bureaucrats never mind this. In fact, they are used to it, and hardly pay much attention to the comings and goings of agency heads. It’s true that political appointees get the best office on the first floor and the closest parking spot, and everyone defers to them. They bring with them to the job a slew of cronies who are given titles such as assistant or deputy or communications or something else. But they all figure out quickly, if they didn’t know already, that they are mostly there to play a role and nothing more.

Early in my writing life, I followed the career of Jack Kemp very closely. He was a serious intellect and a successful political figure. During the George H.W. Bush presidency, he snagged the spot as secretary of Housing and Urban Development. He came to the job with enormous passion and energy. He had every intention to privatize public housing around the country, selling units to the tenants and otherwise turning them over to private enterprise. He also had the idea of creating a range of enterprise zones to revitalize long-stressed neighborhoods.

He also wanted to clean up the agency and get rid of the waste and fraud, even cutting the budget. That part of the agenda immediately made him a target. I was writing articles on the goings-on at HUD at the time, which hardly anyone does, and that made me a target of the embedded bureaucrats, not for attack but for dishing the dirt on Kemp. They flooded me with papers, documents, stories, smears, secret meetings—you name it. Anything to throw sand into the gears.

Kemp’s first year was a disaster, hounded by the press and thwarted by the bureaucracy at every turn. He got nothing done. That’s when he changed tactics. He dropped the battle against fraud and waste and turned to the issue of privatization and enterprise zones. He was blocked again and got nowhere, not with the bureaucracy and not with Congress. So he pivoted again, this time asking for dramatic spending increases, which he made contingent on reforms. The spending went through but the reforms did not. He left the agency after a few years, and the agency’s budget ballooned more than ever before but with no reforms.

The trouble is that the more the civil service hates the politics of these agency heads, the more they plot to resist every change. As I think about the history of regulatory and spending agencies in my awareness, I can’t immediately think of even one who succeeded in overcoming this problem. They all fail to bring about fundamental reform—no matter how much in the way of ideas, passion, or energy they bring to the job.

I think often of Betsy DeVos, who was Trump’s pick to head the Department of Education. She was eminently qualified with vast knowledge and experience. She also came with an agenda of defanging the agency and getting its influence out of state and local public schooling, and paving the way for more tolerance and deregulation for private and homeschooling. From the first hour of her tenure, she was despised and so was her entire staff. The media treated her brutally, calling her every name and digging up and flinging dirt as widely as possible.

She struggled for four years in that position, surely the most stressful and unrewarding job she ever held. In the end, after four years in the role, did she accomplish any serious and lasting change? I don’t believe so. In one of her first interviews after leaving, she flat-out said the plain truth: This agency is unreformable and should be abolished forthwith.

That’s a very rare comment from an ex-secretary. Most never speak honestly about their experience. Instead, they pretend to have done a great job and had vast influence in reforming the agency to be better. They do this because it looks great on the resume and enables them to go to work for some mega private-sector company that does business with the agency that they left. Which is to say: They discover the revolving door. If you cannot beat the system, you might as well join it.

This kind of thing has been going on for many decades, dating back even to the Progressive Era. The fuel that fires these agencies is not political reformers but private-sector interests that use the power of bureaucracy to beat back competitors in their own industry. They are the ones with established relationships with lifetime bureaucrats and the reporters who cover the industry. Everyone knows how this works but hardly anyone talks about it.

The Department of Housing and Urban Development is captured by real estate and housing interests.

The Food and Drug Administration is captured by pharma and grocery retailers.

The Department of Agriculture is ruled by the industrial interests in agribusiness.

The Department of Education is the playground of the teachers’ unions.

So, on it goes for the Pentagon, the Federal Trade Commission, the Department of Commerce, the office of the U.S. Trade Representative, the Department of Labor, the Department of Energy, the Federal Reserve, and on down the list of the 200-plus agencies and bureaus in Washington.

They have all been captured—which is a funny way of saying that their real purpose is not to make life better for the public but to serve the most heavily capitalized and politically savvy of the cronies who swirl around them and the muckety mucks who traverse the revolving doors between government and industry.

The word “capture” is a metaphor obviously, but it is also historically dubious. If you read a serious history of the Progressive Era, something like Gabriel Kolko’s “The Triumph of Conservatism,” you find that there’s no such thing as the immaculate conception of a government agency. They were all born in sin, cobbled together not so much by visionary reformers but by industrial elites who use them as tools in competitive wars with other industrialists. That’s how the world works.

One of the most ridiculous performances by D.C. culture is the idea that the president appoints people to be the head of agencies. They aren’t head of anything. It’s an old game. Been going on for many decades. And yet everyone still pretends as if it is real. It will happen yet again in 2025 after the new president takes office. There will be great optimism in the air for change. But nothing will change.

Contrary to the reformists—and I do admire them—the only real path to genuine change is dramatic budget cuts and outright abolition. Let there be no compromise. These agencies specialize in resisting reform. They will only reform when they are gone.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Jeffrey A. Tucker is the founder and president of the Brownstone Institute and the author of many thousands of articles in the scholarly and popular press, as well as 10 books in five languages, most recently “Liberty or Lockdown.” He is also the editor of "The Best of Ludwig von Mises." He writes a daily column on economics for The Epoch Times and speaks widely on the topics of economics, technology, social philosophy, and culture.
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