Government 4.0

File this one under "aimless musings."

Having recently read an op-ed by David Brooks extolling the academic credentials of President-Elect Obama's metastasizing administration got me to thinking of something a good (and fellow-libertarian) friend of mine observed not too long ago about the Republican Party with George Bush at the helm. In essence, he noted that one of the most troubling aspects of Bush-style Republicanism is a certain repudiation of all things intellectual, in favor of governance by determination alone. I don't recall the exact circumstances, but didn't Bush famously sneer at a reporter as an "egghead" when he worked some passable French into a question he posed at a presidential press conference a while back?

Even if apocryphal, the image makes for good symbolism. The hallmark of Bush's tenure has been the attitude that government policy, especially foreign policy, ought to be forceful, direct and unwavering. Decisive action is a virtue, whereas long-winded theorizing and analysis, replete with all those annoying "What if" questions, is a hindrance to getting things done.

So not surprisingly, the largely liberal intellectual establishment is cheering Barack Obama for all the smart, academically polished people with whom he is populating his cabinet and administration. As Brooks notes with approval, virtually all of his supporting cast hails from hallowed Ivy League universities, with even an Oxford grad thrown in for good measure. As Brooks says, "This truly will be an administration that looks like America, or at least that slice of America that got double 800s on their SATs."

So why can't my inner geek get excited, after eight years of get-er-done governance?

It's not because I doubt that Obama, his advisers and his future cabinet members are intelligent people (how intelligent is a different story). Much as I believe that degrees from Yale, Harvard and their ilk can be overrated and overblown, I still harbor ample respect for a collection of people who could hack it at institutions where my application would have been used for scratch paper by admissions officers.

So I guess my unease has more to do with the limits of intelligence itself, and the difference between intelligence and wisdom. Because these days especially, with the economy in a worsening recession, there are calls from all sides for the new administration to "do something" to make it all better. As I noted in an earlier post, liberal columnist Bob Herbert wants a "tough" and "very, very smart" plan to save the Detroit Big Three automakers. Twit though he is, at least Herbert has the humility not to try to write that plan himself. Instead, he wants the smart kids to do it. And therein lies my worry.

I believe there are essentially two ways to view what's happening in our present economy. There is the enlightened liberal position that government must take certain actions to bring us out of this recession; and there is the competing position, that try though it might, the government can't save the day, and that we as a country are best off simply weathering the storm. The first view is predicated on the notion that if you get enough "very, very smart" people together in a room and tell them to solve a problem, they'll drink a lot of caffeine, stay up very late, and eventually find the solution. The second position is rooted in a much more pragmatic world-view, in which bad things sometimes happen and there's nothing anyone can do to change that.

Consider the implications of the "we can fix it" position: If it's possible for a government of very smart, very earnest people to design and implement policies that can end a recession, doesn't that imply that bad economic times can actually be warded off before they arrive? More simply, if it's possible to fix something that's broken, shouldn't it logically follow that the damage can be averted in the first place? If so, that would imply that, in theory, recessions are all avoidable.

I'm sorry, but I'm just too much of an empiricist to buy this Utopian vision. If life has taught me nothing else, it's that bad things sometimes happen. And just because there are comprehensible causes of those bad things, this does not mean we can head them off at the pass. After this recession, a lot of economists will no doubt study the factors that gave birth to it and get the postmortem right; however, this does not in any way imply that anybody can solve the problem in the present tense.

But do Barack Obama and his advisers know this? After all, we are talking about a group of people who are accustomed to succeeding at mental challenges, and the mindset that engenders does not lend itself to intellectual humility. Years spent integrating Taylor series and receiving high marks on term papers at the most prestigious universities in the world can go a long way toward convincing an intelligent person that there's nothing he doesn't know or can't figure out. And with the pro-Obama press clamoring for his administration to get to work "fixing" the economy, we are already hearing assurances that they have all the answers.

Such confidence frightens me. Consider: In 1933, Franklin Roosevelt took office and appointed "whiz kid" technocrats to combat the Great Depression. His administration was nothing if not energetic and well-intentioned, but six years later, the country was still mired in depression. Can Obama's Ivy Leaguers succeed where they failed? Or will they approach today's crisis with the humility that comes from recognizing their limitations as imperfect human beings?

Or more abstractly, have they considered the possibility that this is not a test, and there are no right answers?

Champions of Failure

I tried to have a pleasant, relaxing Saturday. I really, really tried. All was going well, up until about two minutes ago, when I read this op-ed in today's New York Times by Bob Herbert. And that's when my heretofore enjoyable day went completely off the rails. Just knowing that perhaps the most influential newspaper in the country employs someone as intellectually threadbare and vapid as Bob Herbert to write a twice-weekly opinion column fills me with despair.

To get right to it: In case you live under a rock, America's automakers, which have been on the decline for years due to high costs and a reputation for making bad cars, are now seriously flirting with actual bankruptcy. Particularly GM, which announced just recently that it is losing money at the rate of about $2 billion a month. At this pace, the company projects that it could be out of cash and in bankruptcy court by early in 2009. So naturally, GM is doing what every troubled business enterprise does these days: Demand a federal bailout. In GM's case, such a bailout would come in the form of a $25 billion (for starters) loan from the government.

It now appears that Democrats lack the support to pass such a loan, until the new Congress convenes in January, so at least for the time being, this latest transfer of losses from the private sector to the taxpayers is on hold. And much to the chagrin of Bob Herbert, who, as usual, knows just how our economy ought to be structured. Sniffs Herbert:

"If G.M., which is on life support, or Ford or Chrysler were to go bankrupt, the reverberations would kill the jobs of entire armies of American workers. It would undermine the standard of living of hundreds of thousands of families and shutter the entrances of untold numbers of small and intermediate businesses."

To stave off this potential economic nightmare, Herbert would have the federal government step in to instruct GM, which has been in the business of selling automobiles for exactly 100 years, on how to build cars people actually want. The Treasury would open its bottomless pockets yet again to lend GM however many billions it needs, but with conditions. In Herbert's own words: "That means dragging the industry (kicking and screaming, no doubt) into the 21st century by insisting on ironclad commitments to design and develop vehicles that make sense economically and that serve the nation’s long-term energy security requirements." (Italics mine.)

Is the man serious? In a single sentence, he proposes that the government force a for-profit company to operate profitably, AND serve the "nation's long-term energy security requirements." Does he really believe that GM's management hasn't been trying to make money all this time, and that a government-appointed technocrat will succeed where a once-mighty industrial giant has failed? Earth to Bob Herbert: If a group of people who've spent their entire careers trying to make money building and selling cars can no longer do it, the federal government is not going to lead them back to profitability.

And how about that "serve the nation" business? Is Mr. Herbert aware that the political system in which government coerces nominally private companies into "serving the nation" by building what the government decrees is called "fascism"?

So, allow me to offer a competing analysis (a very short one, I promise) of GM's woes: GM is a massive company with too many brands, too many dealerships, too many employees and prohibitively costly labor agreements. GM workers earn, between wages, pension and health care benefits, upwards of $70 an hour, whereas nonunionized workers at Japanese car plants located in the U.S. make considerably less (though by no means poorhouse wages). In recent years, GM, like the other two Detroit car makers, has depended heavily on SUV and truck sales to stay afloat, and demand for those highly profitable vehicles is evaporating.

In other words, GM's problems are structural, long-term problems that cannot be fixed by anything short of a major overhaul. And this is exactly what bankruptcy is designed to promote. Bankruptcy would allow GM to renegotiate the impossibly high wages it pays employees, sell off production facilities and entire brands to eliminate dead weight, and begin the painful process of scaling itself back down to a manageable-sized company that can compete with foreign rivals. Bankruptcy does NOT mean that all of a sudden, poof, no more GM, as Bob Herbert implies with all his doomsday scenarios. In recent years, US Airways, United Airlines and Delta all declared bankruptcy; surely he's noticed that those companies still exist today, right?

And really, what alternative to bankruptcy can Herbert offer? Well, here it is, in his own words: "The government should craft a rescue plan that is both tough and very, very smart." So let me see if I have this straight, Bob: Your plan is for someone else to come up with a good plan?

Good plan.