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Posts Tagged ‘bureaucracy’
May 18th, 2015 at 6:13 pm
CMS Hush-Hush on New ‘Epic’ Medicaid Rules

The Centers for Medicare and Medicaid Services won’t say what’s coming before it announces new rules for long-term managed care, the first in 13 years.

“The number of people enrolled roughly quadrupled, from 105,000 in 2004 to 389,000 in 2012,” reports National Journal. “And overall Medicaid spending on long-term care is projected to balloon from $60 billion annually to more than $100 billion in 2023, the Congressional Budget Office has estimated, as the baby boomers get older and require more care.”

Health care industry leaders are anxiously awaiting the new regulations without any indication of what’s coming. CMS has been working on the updated regulatory scheme for more than a year, and so far is keeping the people most effected in the dark.

“It’s a lot like the recent Mayweather-Pacquiao fight,” a representative of managed care plans is quoted as saying. “There’s lots and lots of hype around it, and it’s either going to be epic or it’s going to kind of fizzle.”

With President Barack Obama’s penchant for going big, it will be shocking if his administration opts for fizzle instead of epic. That nameless bureaucrats have this much control over major policy decisions says a lot about the real do-nothing tendencies of Congress. Rather than debate and deliberate over such a consequential matter, Members of Congress have outsourced their lawmaking function to an executive agency.

That’s not leadership. It’s a dereliction of duty.

May 11th, 2015 at 3:01 pm
Resist the Nanny State with Private Citizen Defense Funds

Charles Murray at AEI has a thought-provoking idea for pushing back against the Nanny State: private citizen defense funds.

“People don’t build tornado-proof houses; they buy house insurance,” Murray explains. “In the case of the regulatory state, let’s buy insurance that reimburses us for any fine that the government levies and that automatically triggers a proactive, tenacious legal defense against the government’s allegation even if – and this is crucial – we are technically guilty.”

Defending the technically guilty is designed to make overzealous regulators think twice before going after someone. The point is to concentrate enforcement resources on the worst offenders – not the weakest targets.

Murray suggests two ways of funding his citizen defense initiative. “The first would be a legal foundation functioning much as the Legal Services Corporation does for the poor, except that its money will come from private donors, not the government. It would be an altruistic endeavor, operating exclusively on behalf of the homeowner or small business being harassed by the regulators. The foundation would pick up all the legal costs of defense and pay the fines when possible.”

But wait, there’s more!

“The other framework would be occupational defense funds. Let’s take advantage of professional expertise and pride of vocation to drive standards of best practice,” says Murray. “For example, the American Dental Association could form Dental Shield, with dentists across America paying a small annual fee. The bargain: Dentists whose practices meet the ADA’s professional standards will be defended when accused of violating a regulation that the ADA has deemed to be pointless, stupid or tyrannical. The same kind of defense fund could be started by truckers, crafts unions, accountants, physicians, farmers or almost any other occupation.”

Though it would be nice if some of the great ideas touching on regulatory reform – for example, the REINS Act – are signed into law someday, the wonderful thing about Murray’s idea is that it could go into effect without any helping hand from government.

You can read the entire article at the Wall Street Journal.

March 30th, 2015 at 7:23 pm
Supreme Court Declines Challenge to ObamaCare’s IPAB

The Obama administration got a rare piece of good news today when the U.S. Supreme Court declined to overturn a Ninth Circuit Court of Appeals decision upholding part of ObamaCare.

The case, Coons v. Lew, is an Arizona-based challenge to the Independent Payment Advisory Board (IPAB), the 15-member group of experts empowered to reduce Medicare spending below a certain threshold.

In declining the plaintiffs’ appeal, the Supremes did not in any way indicate that this case is without merit. Rather, it may have been filed too early. Courts are typically loathe to strike down parts of laws that have yet to go into effect. IPAB won’t be making any decisions until 2019 at the earliest.

As usual, the issue is whether IPAB is constitutional. “Its decisions cannot be overridden by Congress without a super-majority and cannot be challenged in court,” explains a report in Politico. If that sounds like near monarchial power for an unelected bunch of experts, well, this is the Obama administration after all.

For now, IPAB is a dormant legal issue. Time will tell if it becomes a political rallying cry in next year’s presidential election.

January 22nd, 2015 at 8:20 pm
Obama Admin Shirking Legal Duty to Inform Congress of New Regulations

As Republicans turn to the Congressional Review Act (CRA) to rein in the Obama administration’s executive overreach, they should scrutinize a recent trend to shirk the CRA’s reporting requirements.

In my column this week I explain how the CRA works – a federal agency proposes a rule and Congress gets about 60 days to kill it (so long as the president agrees). Even if the president vetoes Congress’ disapproval, the process helps define each party’s stance on the proper role of regulation.

Importantly, the CRA imposes a reporting requirement on federal agencies to inform Congress about final rule proposals. It turns out, however, that the CRA doesn’t create an oversight process to ensure compliance.

Enter the Government Accountability Office (GAO), Congress’ watchdog over the administrative state.

“Shortly after the CRA was enacted, GAO voluntarily developed a database of submitted rules, began checking the Federal Register to ensure that all covered rules were being submitted, and periodically notified the Office of Management and Budget (OMB) about missing rules,” says a 2014 report from the Administrative Conference of the United States.

“However, in November 2011, GAO decided to reduce its checks of the Federal Register, and to stop notifying OMB about missing rules.”

As a consequence, GAO lost track of whether federal agencies were complying with the CRA. Between 2012 and 2014, “[m]ost of the 43 missing major and significant rules also did not appear to have been received by both houses of Congress – thereby preventing a Member of Congress from introducing a resolution of disapproval under the CRA.”

Since Congress can’t disapprove what it doesn’t know about, the Republicans that control the legislative branch should instruct GAO to ratchet up its oversight to ensure the Obama administration is CRA-compliant.

January 21st, 2014 at 7:46 pm
Time to REIN-in State & Local Govt. Too

Steven Hayward is out with a blistering piece on the need to remember that state and local governments can be just as mind-numbingly bureaucratic as the feds.

“A key principle of federalism is that state and local government would resist the centralization of power in Washington, and defend the principle of ruling with and by the consent of the governed,” writes Hayward. “It is time to recognize that this kind of government no longer exists…”

As proof he cites several stories of local cops shutting down kids’ lemonade stands, and county air pollution regulators that make more than the top officials at the federal EPA. One could add to this Santa Monica’s “ban the [plastic] bag” campaign, and any of former New York City Mayor Michael Bloomberg’s wars on salt and soda, among many others.

And it’s not just in deeply blue states that bureaucrats revel in meddling. The four lemonade stand shut-downs that Hayward spotlighted occurred in Texas, Georgia, Iowa and Wisconsin.

In a nutshell, states and localities have succumbed to a me-too mentality that simply creates mirror images of federal bureaucracy all the way down. In order to justify their existence, each level imposes fines, collects fees and issues regulations – many times at odds with each other. The duels over rule have gotten so pervasive, there’s even a judicial doctrine called “preemption” to help courts sort through competing claims over which gang of regulators gets to control citizens’ lives.

One way to limit any bureaucracy’s social footprint is to make its decisions subject to approval by the legislature that creates it. At the federal level, the REINS Act would require congressional approval before any regulation costing $100 million or more annually goes into effect. Similar efforts, with lower thresholds, could and should be pursued at the state and local level.

Putting state legislators and city council members on the record when it comes to imposing increases to the costs of living will likely reduce the number of increases imposed. After all, if it makes sense at the federal level, why not closer to home?

May 2nd, 2013 at 8:06 pm
Obama’s Regulatory Legacy To Date: 131 New Major Regs Totaling $70B

With the first half of President Barack Obama’s regulatory legacy behind us, the folks at Heritage tallied up the cost thus far – 131 new major regulations totaling $70 billion.

Major regulations are those imposing a cost on the economy of at least $100 million or more each year.

In 2012, the two biggest profit-killers were (1) a joint EPA-Dept. of Transportation rule to boost fuel-economy standards that will result in an average new price increase of $1,800.00, and (2) an EPA Utility MACT regulation designed to shut down coal plants by making it cost prohibitive to meet new emissions standards.

On deck are the literally hundreds of regulations spawned by ObamaCare and the Dodd-Frank financial reform law. Since those are still working their way through the bureaucracy, it’s too early to estimate what their financial impact will be. One this is certain, though; they won’t be cheap.

Get a copy of the entire report, Red Tape Rising, here.

January 29th, 2013 at 2:30 pm
Dodd-Frank Missing Deadlines, Hurting Businesses

A new GAO report says that Dodd-Frank, the 2010 law that enormously expands the federal government’s regulatory role in the financial markets, is being implemented at a snail’s pace:

Overall, GAO identified 236 provisions of the act that require regulators to issue rulemakings across nine key areas. As of December 2012, regulators had issued final rules for about 48 percent of these provisions; however, in some cases the dates by which affected entities had to comply with the rules had yet to be reached. Of the remaining provisions, regulators had proposed rules for about 29 percent, and rulemakings had not occurred for about 23 percent.

At first blush, limited government conservatives might cheer the slow growth in regulation.  But limited government is only good if it’s for the right reasons; for instance, relying on the current legal (fraud) and market (bankruptcy) framework to police financial bad actors.  Here, however, the delays are due to Dodd-Frank’s perpetuation of flawed regulatory methods.

For example, the report lists obstacles such as regulators with overlapping jurisdictions and inconsistent rules, impossible-to-meet statutory deadlines, and lack of consumer confidence in the regulators’ ability to produce fair and reasonable guidelines.  To cope with these realities, bureaucrats are opting to miss deadlines in favor of more collaborative rules.  But while the benefit may be more buy-in from stakeholders inside and outside the government, the costs are huge to the businessman on the street.

The two biggest casualties are the rule of law and regulatory transparency.  The first is undermined because bureaucrats allowed to ignore statutory mandates are bureaucrats allowed to operate outside the law.  Think a private business could just decide to miss a deadline because compliance is too hard?

Moreover, part of the difficulty complying comes from the lack of transparency.  Businesspeople need certainty in regulations to plan for the future, but that can’t be done when deadlines are waived at the discretion of the regulator.  So instead of being able to act on distasteful yet concrete information, businesses are left wondering how to position themselves as the regulatory elites “collaborate.”

In this type of environment, the safest bet is not to take risks like hiring or expanding.  With government like this, is it any wonder the job market is so lousy?

H/T: The Hill’s RegWatch blog

July 25th, 2012 at 5:55 pm
REINS Act Gets New Champion

The important reform bill, the Regulations of the Executive In Need of Scrutiny (REINS) Act, is getting new champion with the retirement of Rep. Geoff Davis (R-KY).

From an emailed press release announcing the change:

“Todd Young is one of the hardest-working and most diligent new members of Congress.  He has enthusiastically championed the REINS Act at home and in Washington,” said Congressman Davis.  “Congress has excessively delegated its constitutional responsibility for making the law of the land to unelected bureaucrats for too long.  The REINS Act is one of the most important structural reforms to restore this accountability.  I am confident that Congressman Young will be a tireless champion for the REINS Act going forward.”

Calling Young “tireless” is a good word choice.  According to the Congressman’s official bio, he put himself through night school to get an MBA from the University of Chicago and a law degree from the University of Indiana.  Prior to that, he enlisted in the Navy en route to securing an appointment to that branch’s academy.

Young will need that doggedness to pass the REINS ACT into law.

Currently, there is no congressional oversight of bureaucratic “major rules” costing the economy $100 million a year or more in compliance costs.  The REINS Act would change that by requiring administrative agencies to submit proposed major rules to Congress for an up-or-down vote in both chambers before becoming law.  The aim is to stop rogue agencies like EPA or HHS from legislating through rulemaking what they can’t get Congress to pass through the normal lawmaking process.

What are Young’s prospects?  This year, Rep. Davis convinced the GOP-dominated House to pass the bill, but like every House reform, the REINS Act died from inaction in the Democratic Senate.  But if after the November elections the GOP can hold the House and gain the Senate with conservative reformers – or Republican incumbents scared straight by conservative primary challengers – then expect to see the REINS Act make great strides towards passage.

Our constitutional system needs Congress to get back in the game on regulation, if for no other reason than to reestablish accountability between the laws that govern us and the people we elect to pass them.

Good on Davis for picking Young to succeed him.  Now voters in the several states need to send another crop of conservative reformers to the Senate to help him out.

July 13th, 2012 at 1:56 pm
Obama Repeals Welfare Reform By Administrative Fiat

The Heritage Foundation picked up on a little noticed administrative policy change announced yesterday by the Department of Health and Human Services that removes the work requirements in the landmark 1996 welfare reform legislation.

Here’s how Heritage characterizes the Obama HHS’s new policy:

[On Thursday, July 13, 2012] the Obama Administration issued a new directive stating that the traditional TANF work requirements can be waived or overridden by a legal device called the section 1115 waiver authority under the Social Security law (42 U.S.C. 1315).

Section 1115 states that “the Secretary may waive compliance with any of the requirements” of specified parts of various laws. But this is not an open-ended authority: Any provision of law that can be waived under section 1115 must be listed in section 1115 itself. The work provisions of the TANF program are contained in section 407 (entitled, appropriately, “mandatory work requirements”). Critically, this section, as well as most other TANF requirements, are deliberately not listed in section 1115; they are not waiveable.

In establishing TANF, Congress deliberately exempted or shielded nearly all of the TANF program from the section 1115 waiver authority. They did not want the law to be rewritten at the whim of Health and Human Services (HHS) bureaucrats. Of the roughly 35 sections of the TANF law, only one is listed as waiveable under section 1115. This is section 402.

Section 402 describes state plans—reports that state governments must file to HHS describing the actions they will undertake to comply with the many requirements established in the other sections of the TANF law. The authority to waive section 402 provides the option to waive state reporting requirements only, not to overturn the core requirements of the TANF program contained in the other sections of the TANF law.

The new Obama dictate asserts that because the work requirements, established in section 407, are mentioned as an item that state governments must report about in section 402, all the work requirements can be waived. This removes the core of the TANF program; TANF becomes a blank slate that HHS bureaucrats and liberal state bureaucrats can rewrite at will.

This newly created waiver authority builds on the unprecedented work of the Education Department waiving No Child Left Behind requirements, and HHS’s previous ObamaCare waivers.

It also reaffirms the Obama Administration’s commitment to its “We Can’t Wait” vision of governance, which says that if Congress won’t cooperate in passing liberal policies, then the President and his bureaucratic administrators will rewrite the law without them.

The administrative state remains constitutionally suspect because the Supreme Court has never explained how bureaucracies that exercise quasi-judicial, executive and legislative powers align with the separation-of-powers principle enshrined in our Constitution.  (Hint: They don’t.)

But because the Supreme Court has chosen to allow an unconstitutional barnacle to be grafted onto our ship of state, we now have liberal policy wonks passing, enforcing, and adjudicating laws through waiver requirements that are completely beyond the reach of democratic accountability.  (Sound familiar?)

The Obama Administration’s use of waivers to replace existing law with its own policies is bringing us to a tipping point.  If taken to its logical conclusion, Congress need not pass another law so long as the Executive can waive-and-replace its contents at will.

Like so many other issues this election cycle, Mitt Romney and others need to stress the importance of the Obama Administration’s lawless disregard for our constitutional system.  Administrative fiat cannot be accepted as a valid substitute for legislative deliberation.  If it is, then America will in every sense be a nation of men and not laws.

July 5th, 2012 at 1:35 pm
Roberts’ ObamaCare Decision a Job Creator?

It’s no secret that Chief Justice John Roberts’ opinion in the ObamaCare case last week is already helping President Barack Obama on the campaign trail by giving the unpopular law constitutional legitimacy.

But Fox News reports that Roberts’s opinion may also help the President make another boast: ObamaCare is a job creator.

Much bigger than the mandate itself are the insurance exchanges that will administer $681 billion in subsidies over 10 years, which will require a lot of new federal workers at the IRS and health department.

“They are asking for several hundred new employees,” Dorn said. “You have rules you need to write and you need lawyers, so there are lots of things you need to do when you are standing up a new enterprise.”

For some, though, the bottom line is clear and troubling: The federal government is about to assume massive new powers.

According to James Capretta of the Ethics and Public Policy Center, federal powers will include designing insurance plans, telling people where they can go for coverage and how much insurers are allowed to charge.

“Really, how doctors and hospitals are supposed to practice medicine,” he said.

The health department is still writing regulations, which can be controversial in and of themselves. One already written, for instance, requires insurance plans to cover contraception. It has been legally challenged by Catholic groups in a case likely to end up in the Supreme Court.

So, there are likely to be many more chapters to go in the saga of Obama’s health care law

And none of it would be possible without the Chief Justice.

June 26th, 2012 at 12:42 pm
Domestic Drones Turned Into Terrorist Missiles?

Previously, I’ve agreed with Charles Krauthammer’s concerns about unmanned aerial vehicles (UAVs or drones) being allowed into domestic airspace because of the threat to privacy from so-called “eyes in the sky.”

Now, Todd Humphreys, a professor at the University of Texas at Austin, is showing how tech savvy terrorists can, and very likely will, exploit a “gaping hole” in the government’s flight security structure.

Last Tuesday, in the barren desert of the White Sands Missile Range in New Mexico, officials from the FAA and Department of Homeland Security watched as Humphrey’s team repeatedly took control of a drone from a remote hilltop. The results were every bit as dramatic as the test at the UT stadium a few days earlier.

DHS is attempting to identify and mitigate GPS interference through its new “Patriot Watch” and “Patriot Shield” programs, but the effort is poorly funded, still in its infancy, and is mostly geared toward finding people using jammers, not spoofers.

According to Humphreys, “Spoofing [a drone’s GPS receiver] is just another way of hijacking a plane.”

For about $1,000 and with a little bit of technical training a terrorist could take control of any civilian-operated drone and wreck havoc.  Without a human pilot at the controls, the drone’s onboard computer will simply follow whatever commands it is given, regardless of where they originate.

And while some terrorists may be interested in taking over surveillance drones for intelligence gathering purposes, the real danger is if a drone as large as a cargo plane – which FedEx plans to use when domestic drones are approved – is overtaken and flown into planes carrying people or into crowded buildings.

As Humphreys says, “In 5 or 10 years you have 30,000 drones in the airspace.  Each one of these would be a potential missile used against us.”

So not only would a terrorist hacker not need to buy a drone in order to fly one, he wouldn’t even need to go through an invasive TSA screening to reenact the 9/11 tragedy.

Because of pressure from the military and drone manufacturers, Congress is requiring the Federal Aviation Administration to fast-track regulations as part of the FAA’s reauthorization act.  Significant rules that will impact every American are to be conceived, written, and finalized within weeks of each other, and an entire regulatory scheme is mandated to be implemented in less than a year.

If you think that kind of statutory mandate translates into greater bureaucratic efficiency, think again.

The time-crunch – and the deliberate lack of oversight from Congress by pushing the rule writing onto an agency – means that everyday Americans will not be privy to the decision making process that will dramatically impact their safety in the air and on the ground.

Congress needs to rein itself and this process in.  With arguably illegal waivers being given to certain groups to avoid provisions of ObamaCare and No Child Left Behind, we’ve seen how arbitrary and capricious federal regulators can be when it comes to expedited rulemaking.  There’s no reason to expect a more coherent approach from an FAA trying to balance competing interests like privacy, profit, and public safety on an irrational deadline.

We need open debate and deliberation from our elected officials about the costs and benefits of domestic drones.  If Congress won’t engage the issue because it’s too politically painful, then the American people shouldn’t suffer a lapse in safety and privacy because their representatives would rather pass the buck than take responsibility.

June 6th, 2012 at 2:36 pm
Europe: In For a Penny, In For a Pound
Posted by Print

Pity our poor friends in Europe. They just can’t seem to stomach the lesson that the faltering state of the continental monetary union has made all but impossible to ignore. Rather than making a clean break from the common currency, it now appears that the smart set wants to double down. This item, appearing earlier this week in the Wall Street Journal, is nothing short of chilling in its implications:

Germany is sending strong signals that it would eventually be willing to lift its objections to ideas such as common euro-zone bonds or mutual support for European banks if other European governments were to agree to transfer further powers to Europe.

If embraced, the move would deepen in fundamental ways Europe’s political and fiscal union and represent one of the boldest steps taken by the bloc since the euro was launched. Germany has never before been willing to discuss the conditions it believes necessary to move toward assuming common risks within the euro zone. Now, although the end may be a long way off, it appears willing to discuss those conditions.

“The more that other member states get involved with this development and are prepared to give up sovereign rights to get European institutions more involved, the more we will be prepared to play an active role in developing things like a banking union,” a German official familiar with the discussions told The Wall Street Journal. “You can’t have one without the other.”

Translation: the Europeans are seriously considering throwing the car in reverse and seeing just how far they can push the speedometer. It’s true that an economic union without a matching political consolidation was always doomed to fail (the practical effect has been Southern Europe living off the North), but the move towards a true United States of Europe brings to mind James Madison’s observation from Federalist #10 about destroying liberty in order to cure the problem of political faction: the cure is worse than the disease.

A continent-wide government will destroy all pretense of national sovereignty throughout Europe, leaving the bureaucrats of Brussels to steer a bold new course that will vanquish the national character of some of the world’s proudest nations, perpetuate a failing economic model, and cede previously democratic powers to unelected technocrats.

Let us pray that Europe doesn’t go down this road. If it does, the burden of Western leadership will fall even more disproportionately on American shoulders than it does already.

April 18th, 2012 at 6:31 pm
Getting Rid of ObamaCare Means Shutting Off Spending

Politico has a great article grappling with the question, What happens to all the agencies and personnel funded by ObamaCare if the Supreme Court rules the health care reform bill unconstitutional?

Unless the Court spells out in great detail how to unwind a bureaucratic behemoth that has already created 500 new positions in 2 new agencies – with another 3,000 new jobs in the Office of the Health and Human Services Secretary alone – it seems the answer is, no one knows.

Realistically, the issue will boil down to which party has control of the public’s purse:

“The issue you’re looking at here is cash flow,” said Jim Dyer, a former Republican staff director of the House Appropriations Committee, who is now a principal at the Podesta Group.

The federal spending pipeline is complex and secretaries have a lot of tricks up their sleeves. Even if the courts strike down the health reform law, Dyer said, the onus will still be on Congress to fully shut off the tap.

“If I’m an appropriator, … I would want to draw a hard line in the sand,” he said. The committee could immediately demand HHS stop its spending if the court strikes down the law so that it can exert tight control over how it winds the program down. Exactly how that would shake out if a Republican-controlled House committee wanted HHS to stop the spending but a Democratic-controlled Senate did not would be part of the uncertain political terrain.”

Here’s one more reason to ensure that next year’s budget process is dominated by fiscal conservatives.

March 5th, 2012 at 2:13 pm
The Obama Energy Famine, Continued
Posted by Print

In my column last week, I focused on how the Obama Administration’s energy policies harm the economy by subsidizing “clean fuels” that are not viable at market while handicapping the energy sources that actually work (and are affordable) in the here and now. An editorial in today’s Washington Examiner drives the point home:

The number of approvals for drilling in the Outer Continental Shelf in the Gulf of Mexico — which accounts for a third of all U.S. oil production — under Obama has plunged from more than seven per month to only three. Measured in terms of how long is required for the government to consider a permit application, the average for the five years before Obama was 60.6 days. The average is now almost 110 days, according to the Institute for Energy Research. Viewed in terms of the percentage of all permits sought that are approved, the five-year average before Obama was 73 percent. Today under Obama, it is 23 percent and falling. In other words, it is almost certain that the oil-drilling rig count will head back down in coming months, but it will be in response to government interference rather than as a result of price fluctuations. And the price of gas at the pump will continue to go higher.

Read that again. A 2/3 reduction in the number of permits issued and a doubling of the time it takes to get said permits. And the president really wants us to believe he doesn’t have any “silver bullets” for gas prices?

November 16th, 2011 at 5:29 pm
State Department Creates Energy Bureau, Redundancy

The Wall Street Journal reports that Hillary Clinton’s State Department is opening a brand new “Bureau of Energy Resources” today.  Amid the bureaucrat gushing about a “six-fold increase in personnel,” perhaps it’s worth considering just how unnecessary is this new office since its mandate seems to overlap substantially with other agencies.  Here are the “new” duties according to the article:

  • Shore up stable supplies of affordable energy for the U.S.
  • Promote clean energy and changes in markets to make alternative-energy technology more competitive
  • Manage the geopolitics of the energy world
  • Unabashedly support the export of U.S. technology, working with countries to put in a level playing field so U.S. goods can compete internationally
  • Direct the development of the shale gas revolution in the U.S.

If you thought all of these mandates already apply to other entities, you’re right.  Someone should alert the Department of Energy, the U.S. Trade Representative, the Department of the Interior, and the Department of Commerce – as well as a host of smaller outfits known only to the industries they regulate – that yet another federal agency is open and ready to do business harm.

June 13th, 2011 at 7:22 pm
GM’s Misguided ‘Culture of Excellence’

If last week’s column about the cluelessness of General Motors’ management got you in the mood for some “how did we get here” info, former GM and Chrysler executive Bob Lutz has an app…er, book for that.

The book is titled Car Guys vs. Bean Counters: The Battle for the Soul of American Business.” Lutz’s experiences have been the subject of superb interviews in The Atlantic and the Wall Street Journal.  In both, Lutz describes how an overreliance on metrics – in particular, counting the wrong things like volume instead of profit – over time destroyed the creativity and dominance of the American auto industry.

All of the hyperlinks are worth reading, but here is the funniest – and saddest – story I’ve read so far:

The Outside Speaker Effective Analysis Group

A revealing window into GM’s misfiring “culture of excellence” in the second half of the 20th century came by way of my late friend David E. Davis Jr., dean of automotive writers, lecturer, author, pioneering writer at Car and Driver, and founder of Automobile magazine. A sought-after speaker highly knowledgeable about our industry, David told this anecdote in the mid-1980s when speaking about GM.

Sometime in the early ’80s, he’d accepted a gig as speaker to a large group of GM executives. The speech appeared to go well, and the applause felt genuine. David went home pleased and thought no more about it until he received the following letter:

Dear David:
You asked for feedback on your remarks at our recent conference. The data is just now available.

The rating scale was zero to ten with ten being “best.” The five non-GM speakers had scores ranging from zero to ten. Yours ranged from three to ten. The five “outside speakers'” average scores ranged from 5.25 to 8.25.

Your average was 7.35.

Two speakers had higher scores than yours. Your standard deviation from the mean was 1.719 and ranked second among the variances, showing that most people had a similar opinion about your remarks.

I personally enjoyed your remarks very much. Your refreshing candor, coupled with your broad understanding of people, product, and the market, gave us exactly what we asked you for—”widened competitive awareness.”

Thank you for your participation.
Signed:

Outside Speaker Effective Analysis Group

An “outside speaker effective analysis group”? This was the result of too much money and too many overly educated, almost academically oriented people focusing their ray guns of unbridled excellence on targets of complete irrelevance.

That last paragraph almost sounds like a gaggle of bureaucrats, doesn’t it?  Of course, nobody in D.C. could be accused of wasting time and money on inappropriate expenditures, right?

May 25th, 2011 at 1:56 pm
California’s Listless Fourth Branch of Government

An editorial in today’s Stockton Record crystallizes one of the reasons California is facing a $20 billion deficit: it has no master list of state-funded commissions and boards.

Per the Record:

…apparently no one really knows how many are out there although 300 is the number most often cited. A 1989 report by the Little Hoover Commission put it at 400. More recently, the California Performance Review evaluated 339 state boards and commissions. Others have put the number as high as 1,000.

How much they’re costing also is unknown, although getting rid of the 37 panels Brown has targeted would save about $10 million. Admittedly, that’s a drop in the proverbial state budget bucket, but do the math, and if 37 panels are costing us $10 million, what are all of them costing?

And lest anyone think this scandal isn’t bipartisan:

When he swept into office, Gov. Arnold Schwarzenegger vowed to dismantle the forest of boards and commissions that had grown like weeds in state government. That led to the creation of another panel to review government operations.

Among the panel’s findings: “These entities are so scattered and numerous across government that arriving at a firm number is nearly impossible. In our search, there was no single source we could turn to find out which commissions existed and why. In fact, state government has no master list of all boards and commissions and the thousands of political appointees that populate them.”

Incredible.

Indeed.

February 6th, 2011 at 12:58 am
British PM Cameron Takes Aim at Multiculturalism

In a bold speech at Saturday’s Munich Security Conference, British Prime Minister David Cameron lashed the rise in Islamist extremism to the permissive multicultural attitude of state bureaucracy.  Announcing a dramatic shift in policy, Cameron called for “making sure that immigrants speak the language of their new home and ensuring that people are educated in the elements of a common culture and curriculum.”

Kudos to the British Prime Minister for delivering a stirring alternative to the bureaucratic-enabled formula of claiming a grievance against the government, getting public funding, and still working to violently attack the hands that coddle.  Care to wager how long it will be to get a similar statement of national principle from the American President?

December 4th, 2010 at 12:10 am
Obama Labor Department Announces Business Harassment Strategy

There are two kinds of licensed professionals you don’t want to see the word “creative” describe: accountants and lawyers.  Unfortunately, the top lawyer at the Obama Labor Department just released a to-do list that could double as a well-conceived strategy memo for business-hating bureaucrats concerned they may not have enough power.

In Wall Street Journal columnist John Fund’s recent article the solicitor at Labor proposes the following actions to increase the regulatory burden on private enterprise:

  • Identify a public affairs liaison in each Regional Office to send stronger, clearer messages to the regulated community about DOL’s emphasis on litigation.
  • Engage in enterprise-wide enforcement. (A euphemism where multiple sites of a business are visited by surprise on the same day by more than one enforcement agent.)
  • Engage in greater use of injunctive relief (i.e. litigation and court orders), while also identifying and pursuing test cases to “stretch the meaning of the law.”

With the workforce experiencing 9.8% unemployment, this kind of strategy – and heaven forbid, enforcement – will only make matters far worse.

December 1st, 2010 at 4:56 pm
Too Long Without a Chris Christie Update?
Posted by Print

I thought so too. Check out the Trenton Thunder as he takes a shot at the self-interested bureaucrats attempting to stymie his plans for education reform in the Garden State: