I came across this opinion piece I wrote for Memorial Day three years ago. How little has changed:
Who kept the faith and fought the fight;
The glory theirs, the duty ours.
I would like to make this quote from Wallace Bruce the theme of today’s newsletter on Memorial Day, May 30th.
We often take for granted the institutions that our ancestors sacrificed so much to secure. Have we fulfilled our duty to preserve the freedoms that they sacrificed so much for? And have we held the members of our institutions to account for the neglect of their duties?
Some legislators only wish vengeance against a particular enemy. Others only look out for themselves. They devote very little time to consideration of any public issue. They think that no harm will come from their neglect. They act as if it is always the business of somebody else to look after this or that. When this selfish notion is entertained by all, the commonwealth slowly begins to decay.
Little seems to have changed since Thucydides made this observation in about 400 BC, a century after the foundation of democracy in ancient Athens. The fundamental weakness of democracy seems to be that those who are elected to office tend to place their own interests ahead of the interests of their electorate — and ahead of the interests of the nation. Not surprising when, as Thucydides pointed out, they believe that little harm will come from their neglect. But if enough legislators place their own interests ahead of those of the country, they will cause irreversible damage.
The First Rule of Politics is to Get Re-Elected
By placing their own interests first, I do not necessarily mean that office holders seek to enrich themselves at the expense of the taxpayer — although that does occasionally happen. Rather that they define their primary duty to their country as re-election. The pressure to get re-elected is bound to influence their thoughts and actions on almost every issue.
The Presidential Cycle
The temptation to manipulate the system to maximize your chance of re-election is too great for most politicians to resist. In fact it has become so ingrained that the whole economy, and the stock market particularly, is subject to the political cycle. Jeremy Grantham explains the presidential cycle in his last quarterly newsletter:
In the first seven months of the third year (of the presidential cycle) since 1960, Year 3 has returned 2.5% per month for a total of 20% real (after inflation adjustment)…. Now, 20% is perilously close to the total for the whole 48-month cycle of 21%. This means, of course, that the remaining 41 months collectively return a princely 1%.
It’s the economy, stupid
The third rule of politics is don’t run for re-election during a recession. Ask George H. W. Bush who, despite successful prosecution of the first Iraq war, was beaten by Bill Clinton in 1992 with the slogan “It’s the economy, stupid.” (The second rule, by the way, is: never forget Rule #1)
Successive presidents/governments have failed to find a way to re-schedule elections to a time that bests suits them (despite many examples in the rest of the world). They soon, however, came up with an ingenious alternative: re-schedule the recession.
How to Re-Schedule a Recession
As soon as politicians realized they could spend future taxes as well as current taxes, the demise of the current system became inevitable. Prior to the Great Depression of the 1930s, governments were assessed on their ability to balance the books. Previous disasters with fiat currencies (continental and confederate dollars) were still fresh in the national consciousness. Only during times of war could they justify running a deficit. So much so that Herbert Hoover refused to run a deficit despite the deflationary spiral following the 1929 Wall Street crash.
When FDR lifted that constraint in the 1930s, with the acquiescence of a desperate public who were willing to try almost anything, an immense new power was born. Unfortunately with immense power comes immense responsibility — and successive governments have proved themselves unequal to the task.
Spend Future Taxes and Leave your Successor a Pile of Debt
It has become too easy for whoever is in power to spend future taxes to stimulate the economy and postpone a recession. The result is that their successor inherits a pile of debt, which if they attempt to repay, is likely to lead to a recession. So the game becomes one of pass the parcel, with each elected government adding to the debt and passing it on to the next.
If the ancient Greeks had the same power, the decline of Athens may have been a lot sooner. Their modern counterparts have demonstrated that the game cannot continue indefinitely. At some point the market will begin to question government’s ability to repay, raising interest rates to compensate for the risk of sovereign default. Their fears become a self-fulfilling prophecy, with higher servicing costs increasing the burden on the already-precarious fiscal budget.
Fed Compliance
The second actor in this modern form of Greek tragedy is the Federal Reserve. Without a compliant Fed, government efforts to kick the can down the road would be largely negated. An independent Fed could put the brakes on government efforts to stimulate the economy with borrowed money, merely by acting as a counter-balance to their actions. Unfortunately the Board of Governors are political appointments, nominated by the President and confirmed by the Senate. The Federal Open Market Committee (FOMC) may be more evenly balanced with the addition of the president of the Federal Reserve Bank of New York and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis, but is still dominated by the seven Board members. You can be sure that very few mavericks are appointed as governors and that most dissenting votes come from the regions.
Washington, Inc.
Elections are an expensive business and no candidate is likely to achieve re-election without financial backers, making them especially vulnerable to outside influence. The finance industry alone made $63 million in campaign contributions to Federal Candidates during the 2010 electoral cycle, according to the Center for Responsive Politics. That will buy you a lot of influence on the Hill, but is merely the tip of the iceberg. Interest groups spent $3.5 billion in that year on lobbying Congress and federal agencies ($473 million from the finance sector). While that money does not flow directly to candidates it acts as an enticing career path/retirement plan for both Representatives and senior staffers.
The revolving door between Capitol Hill and the big lobbying firms parachutes former elected officials and staffers into jobs as lobbyists, consultants and strategists — while infiltrating their best and brightest into positions within government; a constant exchange of power, influence and money. More than 75 percent of the 363 former senators or representatives end up employed by lobbying firms, either as lobbyists or advisors.
Can the Present System Evolve?
Are we likely to experience slow decay that Thucydides predicted? The present system is entrenched and likely to resist any attempts at reform. Evolution, however, does not occur in small increments. The norm is quite the opposite, with species enjoying long periods of stability followed by violent change when threatened with extinction. The current GFC presents just such an opportunity for change. The Tea Party movement, for example, is attempting to re-define the way that the system works, while I am sure that there are many Democrats who mistrust the motives of Washington.
If they fail to succeed, there is bound to be a next time. And probably sooner than we think.
The state that separates its scholars from its warriors will have its laws made by cowards,
and its fighting done by fools.~ Thucydides (c. 460 BC – c. 400 BC).
To paraphrase the late Kurt Vonnegut: “We are led by captains who have no charts or compasses, and who deal from minute to minute with no problem more substantial than how to protect their self-esteem.”
Such behaviour may be acceptable at a personal level, but as elected representatives of the nation, politicians should concern themselves with the nation’s self-esteem, not their own.
You can trust people to follow their own self-interest…. and to confuse this with the public interest where the two conflict.
Lesser men and women, perhaps. But shouldn’t we seek to elect those who are better than that? Or are you saying there are no such people?
I guess we all follow our self-interest, but it is how we define that self-interest that matters. You might give money or support to a homeless person because it makes you feel good, but someone else might persecute that person because it makes them feel better. Some of us value money and material goods highly while others do not. We are all motivated by a vast array of underlying needs/drives. We are also complex, so someone may be both self-sacrificing and humble as well arrogant and egotistical. There are no saints…..or if there are, they are not in politics.
Far better to amend the system so that self-interest and public interest are closely aligned.
…In a company, management are offered assistance to buy shares because this closely aligns their interests with those of shareholders. Something that eight-figure salaries, options and performance bonuses seldom achieve. I wonder if the same could be achieved with government.
Yes, that is the challenge. We haven’t ever agreed (or even attempted to define) the performance measures by which we might judge performance of a government in real time, let alone an individual politician. Business does it all the time because (ultimately) it has the ability to fire non-performers. Voters don’t have that ability. All we can do is wait four years and vote for someone else equally as unmotivated. KPI’s for government and pollies might be a good start. I once wrote to The West Australian to do that, but never heard back. Also asked Crickey.com and received the same level of disinterest.
Direct democracy may be a partial answer. It gives voters the power to call a referendum (if they can gather enough signatures) on any decision made by political leadership, forcing politicians to consider the broad political will in their day-to-day activities.
Second, as you suggested, is to develop a broad long-term measure of government performance. GDP on its own just doesn’t hack it. And the measure has to consider the long-term, otherwise it will just encourage more kicking-the-can-down-the-road. Here are some basic measures for starters:
Other functions are more difficult to measure, such as maintaining an effective military deterrent, restricting levels of corruption, and so on…
We need to consider politicians as the stewards of our money and hold them to account for performance in much the same way as shareholders are supposed to hold the directors of a company to account:
The third standard may appear a bit vague but it is important. Spending nothing on defense, for example, may yield short-term gains but impair our security in the long-term.
These are all good measures and worth expanding how to measure them. Maybe other readers have a view? Come to think of it, wouldn’t one expect the Bureau of Statistics to be thinking about and measuring such things?
Having just Googled “measuring government performance” and read some of the stuff available on numerous websites, I would have to conclude that you and I have done more constructive thinking about this in a few minutes that anyone else in the nation, ever.
There’s a truly mind-numbing document called “The Australian Government Performance Measurement and Reporting Framework Pilot Project to Audit Key Performance Indicators”, which was published last year by the Auditor General’s office available at:
http://www.anao.gov.au/~/media/Files/Audit%20Reports/2012%202013/Audit%20Report%2028/2012-13%20Audit%20Report%20No%2028.pdf
which illustrates my point. Eighty seventy pages and 25,000 words about KPIs without an actual KPI in it. The European Union seems to be working steadily towards self measurement and improvement, but it’s very high level.
Maybe we should get an Australian Government Scoreboard website going?
Thanks Frank. There is a happiness index that attempts to do something similar to this. But the range of measures could be expanded. Some of the most difficult values to measure would be defense, political freedom and security.
The solution to weak and incompetent politicians, is not a logically difficult problem. We improve the competence of politicians by better selection processes.
The people who are best able to judge the competence of a candidate are those that know them best . So logically, “more democracy” in selection cannot help, because “more democracy”, just increases the number of people who don’t know much about the candidate, and dilutes the vote of those that do.
We reduce the weakness of politicians by making them stronger. Ie more resilient to short term shocks. Increasing the ability of a politician to withstand political pressure empowers them to take unpopular actions.
The simple solution that unites both of these elements is to strengthen the party system. That is why the Pirate favours parliamentary political systems over presidential ones.
We should not expect such a proposal to be popular, but we know where trying to be popular leads us; We become weak and incompetent.
I’m not sure I follow you. Taken to the extreme (a good way to test any logic) means the person who best knows a potential candidate is him/herself, or taken to a lesser extreme, a clique of his/her friends. That might mean they are competent, but it doesn’t make them representative. Or have I missed your point?
Nor do I follow how strengthening the party system would help. In fact the party system seems to limit representation since elected persons who are also party members show more loyalty to the party than to their constituents. Voluntary Euthanasia is one example, where valid polling shows 80% of voters are in favour of it, but parties won’t touch it. As far as I can recall only independent members have ever proposed bills for VE.
You choose: you can have competent, or you can have representative. Will you sail east or west?
The parties are weak now. Often they choose candidates that don’t belong or have not belonged long. Loyalty has no meaning to such people. Loyal to what or whom?
Their campaigns are dominated by PR professionals, who have no understanding of politics. So their publicity is evasive, their message trite, their candidates handsome, and as shallow as a birdbath.
In expensive training sessions they teach candidates how to answer questions without answering questions. At all times they must avoid getting caught out. No one must know how empty they really are.
Statistics tell us that larger groups give increased possibility for exceptional outcomes. Bigger parties are better parties.
Surely you believe in competition and hard work? In stronger parties these factors have increased relevance.
I don’t expect you to agree. Hardly anyone does.
In my opinion and experience those that float to the top are generally those that are least interested in democracy and more motivated by the potential for their income to rise as well as their status. So until we discover a kpi that discovers ones genuineness to the cause nothing will change, call me skeptical but human nature is human nature and power corrupts most of us and if we think the pursuit of happiness and democracy is only brought about by money and materialism it will only continue down the same path we have been on.
Reality.
I think Scott Doran has a point, and human beings certainly aren’t going to sponaneously become altruistic (or even particularly fair minded) in politics or any other matter when power is in the mix, but that sholdn’t stop us aspiring in that direction. I also think something that stops us being unified in a common vision is that there is no common vision. Australia doesn’t have a ‘mission statement’ to act as a general guiding principle. We have no “Life, Liberty and the Pursuit of Happiness” to act as a binding ethos.
As we used to say at work, we need a simple mission statement that everyone can remember in the car park when they go home.
Australia doesn’t have that, so we don’t have a common vision. It’s always going to be every man (read: politician) for himself.