Economist and author Arnold Kling talks about improving government regulation with EconTalk host Russ Roberts. Kling suggests ways to improve the administrative state--the agencies and regulatory bodies that often write the regulations that they enforce. The conversation concludes with Kling's idea for holding public intellectuals accountable for their pronouncements.
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Arnold Kling on the Three Languages of Politics, Revisited. EconTalk. Robert Frank and Russ Roberts on Infrastructure. EconTalk. Sam Peltzman on Regulation. EconTalk. Sam Quinones on Heroin, the Opioid Epidemic, and Dreamland. EconTalk.A few more readings and background resources:
Emily Oster on the Pandemic. EconTalk.A few more EconTalk podcast episodes:
Paul Romer on the COVID-19 Pandemic. EconTalk. Sam Quinones on Heroin, the Opioid Epidemic, and Dreamland. EconTalk. Podcast episodes with guest Allan Meltzer. EconTalk. Podcast episodes with guest Emily Oster. EconTalk. Podcast episodes with guest Cass Sunstein. EconTalk.* As an Amazon Associate, Econlib earns from qualifying purchases.
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| 0:37 | Intro. [Recording date: September 14, 2021.] Russ Roberts: Today is September 14th, 2021, and my guest is economist and author Arnold Kling. Arnold blogged for many years at EconLog, part of the Library of Economics and Liberty, as is EconTalk. He currently writes provocative essays at Substack, which I recommend. This is his 17th appearance at EconTalk. He was last here in April of 2020. We took a fresh look at his book, The Three Languages of Politics. We have two topics for today, if we get to them--we'll see. They're both innovative ideas that Arnold has, one for improving government and one for improving our assessment of expertise--and public discourse, I would add. Arnold, welcome back to EconTalk. Arnold Kling: Thanks, Russ. Great to be here. |
| 1:22 | Russ Roberts: We're going to start with this interesting idea you have for making government more effective. In recent years there's been a lot of talk about what is sometimes called the administrative state, the part of the government that's regulatory and does a lot of administrative stuff that has gotten quite large over the last 50 years and often doesn't work quite as well as we might like. Some people think that's a feature, not a bug, you don't. Well, what can we do to make it better? Arnold Kling: Okay. Let me start out by trying to create a contrast between what I'll call naive libertarianism and what Tyler Cowen calls state capacity libertarianism, which sounds a bit like an oxymoron. Basically a naive libertarian, as I term it, is somebody who just wants the state to be as small as possible, just protect property, keep the peace, don't do anything else. Keep the state in this small box. What I'm calling a state capacity libertarian says: modern life has many threats and opportunities that seem to call for government, that most people expect government to do something about. Better that government do those well than do it poorly because if government does those things poorly, it ends up even infringing on liberty even more. That's how it becomes less of an oxymoron. So, let me give two examples of that. One is the pandemic. I think anyone with any libertarian sensibility at all would say that our government has really abused power and taken a lot of power in dealing with the pandemic. Misused power, abused power. I think this week there's a recall election for Governor Newsom who imposed restrictions on Californians and then himself dined maskless at a fancy restaurant, and that's part of the reason that there's a recall. There are many examples that I think all libertarians would agree are outrageous abuses of power, much more significant than just dining maskless at a restaurant. So, the question is: What do you do about that? Again, the naive libertarian might say, 'Well, rip your mask off. Don't be a sissy, take whatever risk you need. Dine indoors at a restaurant. The authorities shouldn't be telling you what to do. We'll end up with herd immunity as the solution to the virus.' A state capacity libertarian says, 'No, I think most people expect the government to do something about this pandemic and it should just do things well. The CDC [Centers for Disease Control] and the FDA [Food and Drug Administration] shouldn't have screwed up as much as they did.' And, 'If they hadn't screwed up, a lot of these abuses of authority and excess grabbing of power might not have taken place.' So, that's a contrast, in that example. Let me use a less emotionally charged example: the fragility of the power grid. We've seen that recently with a hurricane and I think people supposedly are going to lose power for several day, businesses lose power for several days. This far into the 21st century, I think it's wrong to have a power grid that's that fragile. A naive libertarian might say, 'Well, just let the private sector work it out. It's not an issue for government.' But, a state capacity libertarian would say, 'Well, wait a minute. If government doesn't ensure that the power grid isn't fragile, we're going to be in situations where the government is going to be stepping in and taking harsh steps.' Like, imagine that there was a situation 10 years from now where people have to flee a disaster, and the power's out, and most of them have electric cars. Now the government has to say, 'Well, you get to leave and you have to stay in this toxic environment,' or whatever it is. Or, the government has to come in with generators and say, 'All right, you get to use the generator, or you get the food supplies that we have and you don't.' I think that if we continue to have a fragile electrical power grid, the government is likely to end up in situations where it's abusing power. So, we're better off with an effective government that does something about a fragile power grid. Anyway, those are a couple examples of the contrast. I guess I've converted over the last year or two from a more naive libertarian point of view, to the more state capacity libertarian point of view--that the government ought to do its things well. And I also think that the modern life has created many new threats and opportunities that did not exist 250 years ago when we wrote the Constitution. The Constitution does not mention the words 'electrical power grid,' amazingly enough, given when it was written. Russ Roberts: Go figure. Arnold Kling: But, it does have the words, 'promote the general welfare' in the Preamble, which of course can be used as an excuse for almost any government activity. But, I think the power grid example is legitimate. And, I think there are more and more legitimate uses of government power these days. A few weeks ago, I guess by the time this appears it'll be longer than a few weeks ago, but you had the podcast on the challenges of property rights nowadays. I think those have just become much more ambiguous for a variety of reasons. You have of people living closer together so that more of the things I do with my property affect you and your property. I can block your view. I can put up a noisy establishment next to you, whatever. The more of our assets are intangible--and intangible assets give rise to a lot more ambiguity in terms of property rights. If I'm on a farm I know what my land is, I know what my farm animals are, I know what my machines are. But, when you have something, let's say as complicated as an iPhone, based on a lot of inventions and ideas, who really owns what has to be negotiated a lot. Things like spectrum, the use of the spectrum for communication, that has to be settled somehow. The use of ideas, trade names, reputation. So much wealth is now intangible, and this intangible property is just not as clearly delineated as to who owns what. That makes modern life more complicated, and you get a lot more regulation. Financial transactions are way more complicated than they were 250 years ago, and that probably requires a lot more regulation and government involvement. I think all these trends--all these threats and opportunities for government involvement. As an opportunity I could cite maybe research into nuclear power or research into longevity. Health-related research, whatever. They've just multiplied over the last couple hundred years. And, life has become very complex, harder to regulate, and so there's just going to be more governance. Now, I think what we're going to see more of is more governance by private sector entities. I mean, the classic ones, the things like underwriters laboratories setting standards and so on, or the Internet engineering task forces--that's basically private sector governance. But, I think some of it is going to be more additional, more formal governance from government. I think that that's just the reality that we have to deal with. |
| 10:49 | Russ Roberts: Let me push back on that a little bit. I know this is not your--you're not defending this, but it is striking how poorly government has dealt, as a regulatory body, with innovations of the Internet and other things like it. You correctly mentioned that intangible property leads to some new questions, I would say. How big government has to be to deal with those is a different question. Whether the courts could deal with them or not is a different question. But, certainly the regulatory response to Uber, Lyft, etc., Airbnb--it's struggled to respond to that in a thoughtful way. Not surprisingly: no one would say the government is nimble or innovative in that kind of response. It's slow. It might get better. The other thing I think that I'm concerned about is thinking about why the administrative state has grown as much as it has. We could debate with how big it should be, how much room should be left for private sector governance. Well, there's a lot of public sector governance now, and the question is why. You talk about that in your essay on this, that we will link to if you've published it yet--I don't remember if you have. But, if we think about why the administrative state is so large, the right word really is intrusive. It's not so much the magnitude of it as it is meaning you can measure magnitude in dollars, you can measure in employees. But, just the scope for intervention, everything from soft drinks to standards that you've alluded to, but sometimes are not necessarily productive standards or exclusionary to keep out competitors. It's a form of rent seeking and so on. But, I think the overall growth of it is a fascinating and somewhat alarming response of Congress to the kind of economic changes you're talking about. Congress is supposed to be the regulatory arm, I think, of the federal government. It's not the Supreme Court, it's not the Executive Branch. And, what they really appear to like to do--and I can't remember who's written about this, you probably will--what they really like is to write a kind of vague law--excuse me--write fairly vague legislation, that the courts interpret and that eventually builds out the actual legislation, the actual regulation. And, Congress likes not being in charge of that because they don't have to take any of the blame for how it actually turns out in practice. If it turns out decently, or at least they can wave around the fact that they, 'did something about it.' And, I think the lack of accountability of the current administrative state is deeply alarming. I think I should--this is maybe a good segue and then you can say some other preface-like things if you'd like. But, certainly the current administrative state does not have the kind of accountability and incentives for performance that we'd want to have, given its size. If it was a small little backwater you'd say, 'Well, I wish the Department of Motor Vehicles ran a little better.' It actually does, by the way. Libertarians and others like to complain about the Department of Motor Vehicles in America. It's quite a bit improved over my lifetime--I think partly because service has improved in other parts of the economy. So, even the government has some embarrassment. Those agencies feel like they have to at least keep up in some dimension. But, if that were the main problem is that, 'I wish the Department of Motor Vehicles is a little quicker,' well, that would be one thing. But, that's not what we're talking about here. You might want to respond to that by talking about some of the range of things the administrative state has gotten tangled in, why you think it needs an overhaul. Arnold Kling: Okay. I mean, I think all those criticisms are valid. I think a lot of people say that it would be a good idea to have Congress take on more responsibility, not delegate as much to these agencies. But, be careful what you wish for, because Congressmen are really, really deeply ignorant about these issues, including technology. And, that would actually be very dangerous. So, I think we need to address two things. We need to make an administrative state that's effective, and we need to make an administrative state that's accountable. So, you've raised both of those issues. And, effective includes not stepping into areas where it doesn't need to step into. That's an important part of it. You can think of a bunch of potential errors, almost like Type One/Type Two errors. So, you could have the administrative state not do enough in areas. I would say, keeping the electrical grid robust is an area where it's doing too little. You can see areas where it's doing too much. I mean, I think the TSA [Transportation Security Administration], the airport screening process is just out of control. I mean, including that costs to the users are huge relative to what I think the benefits are. So, yeah--so there's doing too little, doing too much, and then doing things badly. Then, all along there's this lack of accountability, which means that with some exceptions, like the Department of Motor Vehicles, bad policies and bad regulations can persist, and incompetence can persist and so on. |
| 16:39 | Russ Roberts: Let me--can I take an example for a sec, Arnold? You mentioned it, you alluded to it in your opening. The CDC did a particularly bad job encouraging testing in the early days of the pandemic and the FDA-- Arnold Kling: I would say they've never done it right [crosstalk 00:16:59]-- Russ Roberts: Okay, so they did a bad job-- Arnold Kling: Yeah-- Russ Roberts: It's fascinating to me. I had[?] to think about it until we have this conversation: Who made those decisions at the FDA site? You could say, 'Well it doesn't matter, the head of the FDA is responsible.' That's very possible. You could argue that that person should be responsible for that decision. But, it's interesting to me that while a lot of economists complained about--particularly Paul Romer on this program very early on in the pandemic, that there were rapid tests available; that this would help in contact tracing and it would be great with contact tracing, and that would be great--I don't know a name. Now, I don't even know who was the head of the FDA in that time, which is fascinating by itself. But, no one at the FDA stood up and said, 'Well, I did that, and here's why I did it. Maybe I was wrong, but--' No one said at the time, 'So, and so pulled the sign that made that decision, that said you had to use the FDA handful that had been approved,' or whatever it was. Isn't it interesting that that's not like--there's no shame or blame. Forget the fact that nobody got fired as far as I know: No one even got embarrassed by it. Arnold Kling: Yeah. That's kind of a major characteristic of bureaucracy. One of its functions, it's certainly not--maybe it's even intended, but often unintended--is to diffuse blame to the point where you don't have anyone you can blame. And so, businesses discovered, especially in 1980s and 1990s, that you wanted to have people accountable. You wanted the CEO [Chief Executive Officer] to be able to point a finger and say who was responsible for something, because CEOs were actually encountering their own bureaucracy and not being able to figure out who had made a decision, and so on. So, one of the ideas that I have, they're kind of twin ideas for improving the administrative state. One is to actually have the administrative state organized like a business organization, not[?]--profit-seeking, obviously, there obviously are things you can't have. But, actually to have a Chief Operating Officer [COO] who can reorganize, fire, hire, put in systems of accountability. Do the things that businesses do to make their organizations function. Get rid of overlapping responsibilities as much as possible, or manage those overlapping responsibilities. Install a culture into the organization where people are trying to be effective and people are being held accountable. So, it's a very ambitious idea. We should also be wary of having a chief operating officer become a permanent or a semi-permanent almost autocrat. I mean, a J. Edgar Hoover or an Alan Greenspan who's got so much individual power that they kind of overpower everyone else in government. I think that would be--we can talk about plenty of downsides of this COO model. So, that's one thing. And the other key element, structurally, is I think we need a very powerful audit agency. An agency that can step in and evaluate how the regulatory agencies are doing, make sure that they're not abusing power, and question them when they're not being effective. Things like, the government is notoriously poor at using technology. The Obamacare website rollout illustrated that. They were trying to hook together old mainframe systems and create something that would immediately serve the public in real time. It was a mess and a disaster; it was poorly organized, and so on. An audit agency would maybe be able to identify ways in which technology needs to be upgraded or systems need to be upgraded. Maybe the biggest example or the most compelling example of the use of an audit agency is on the issue of surveillance. So, as I've said, threats and opportunities have multiplied, and threats include bioterrorism, cyber attacks, what have you. I think it's inevitable we're going to have a lot of surveillance by government agencies. There's going to be constantly pushing whatever boundary you set. You want them to be subject to checks and balances. You don't want to have them just wait for your Edward Snowdens or types to expose them. I would want to have an audit agency able to look in on the National Security Agency [NSA] or the FBI [Federal Bureau of Investigation] or whatever, and say, 'Okay, clearly they're abusing their power here. They shouldn't be doing this. Maybe--here's ways they could use surveillance better or whatever.' But, I want somebody with authority, and technical skill, and resources looking in on these surveillance agencies and making sure they behave. And, I think that holds for all of these regulatory agencies. The Federal Reserve is notoriously resistant to any sort of auditing and I think that's wrong. |
| 23:12 | Russ Roberts: Your idea--I want to call it a good idea, if I might. I mean, it's not a bad idea if it worked. My skepticism is mainly my unease as to whether it would actually work. But, it reminds me a lot of the role that we used to think journalism played in our democracy. So, journalism, great journalists, investigative journalists look for money that's being wasted, look for corruption, look for overlapping responsibilities, and so on. Would it be possible to fulfill some of the role that you suggest an independent or a new regulatory oversight body would perform, if instead we allowed--not allowed--we made government less opaque, forced some kind of transparency on agencies, and let journalists and others who were interested in it expose those inadequacies? Arnold Kling: A couple of reactions to that. First of all, journalists are way under-resourced relative to what I think is needed. I mean, the amount of expertise that's needed to second-guess the Fed on bank regulatory matters or to--and so, deal with things like that. Also, for something like surveillance, it's not that you want to give that to journalists to put on the front page-- Russ Roberts: Yeah, not the surveillance. That would be an exception. But, I'm thinking about the other things. And by the way, by the way, the Shadow Fed, which in the old days was Karl Brunner and Allan Meltzer and their friends, kind of did exactly what we're talking about. They audited the Fed and used what public data and information they had to critique it, and had the expertise to do so. Arnold Kling: They mostly focused on monetary policy. There was also something called a Shadow Regulatory Committee, and that group should have been listened to. Actually, had they been listened to, I believe we would not have had the Financial Crisis [Financial Crisis of 2008--Econlib Ed.] that we had. I mean, it's a whole digression to go into, but I'll just put it out there. And, I actually put it out there in writing somewhere, I can't remember where. But, they had things right, on how to regulate risk-taking by financial institutions. But, they got nowhere, and that's--so, there's just this lack of institutional power. And I would say that that would be the same thing with journalists. A big challenge with the approach I'm suggesting, which is sort of this powerful chief operating officer, and this also-powerful audit agency is maintaining the balance of power. You don't want the audit agency to be so powerful that the regulatory agencies forget who their real customers are and just focus on passing the audits. And you don't want the regulatory agencies to be so powerful that they can blow off everybody--so that, you say you want them being transparent but then they hold off and have secret meetings where they make the real decisions, and so on. So, maintaining that balance of power is critical in this approach. Stepping back a bit, I'd say that a disadvantage of the government process relative to the market process is the market process has these natural checks--that's competition. So, if a business does something ineffectively or does something wrong, a competitor will come in and do it better; and so it forces some positive evolution. And what I'm trying to do is create some of that tension between the regulatory agencies and a powerful audit agency, so that you don't just have this static regulatory agency without any checks at all. |
| 27:31 | Russ Roberts: But, as we know--and this FDA/CDC example is a perfect example--where journalists were very good at informing us what was going on I think at least pretty good. I think the public had a pretty good idea what went wrong at the CDC and what went wrong at the FDA. Maybe they made a different type of error in response to those mistakes. And similarly, I would point out that the World Health Organization [WHO]--which is a not unimportant body was, it seems to me, overly responsive to China in the aftermath of the pandemic. And a lot of journalists correctly pointed that out. The challenge, I think, is that, having pointed that out, there weren't a lot of consequences--as we've been talking about. So, the hard part of your proposal would seem to me, would be fleshing out what exactly that COO would be able to do. So, we had--one of my all time favorite episodes of EconTalk is I had a--it was actually a debate, there are very few on this program. But, Robert Frank and I had talked about infrastructure as part of an NPR [National Public Radio] interview that they ended up using like 10 minutes of. And, we argued about it for about an hour and it was deliberately combative in a respectful way. Bob Frank and I both respect each other, so it was really fun. I love that conversation. We'll put a link up to it. But, the disagreement there fundamentally was that Bob basically wanted infrastructure--you know, I'd point out--he'd say 'We need better infrastructure.' I'd say, 'Sure we do, you're right. We already spend a lot on it.' He said, 'Yeah. So, we need to spend it better. How would we do that? We'd have a committee of people who decide.' Well, that's a lovely idea. We have a committee now: It's called Congress. They don't do a good job. The incentives aren't there for them to do a good job. And so, it's all well and good--I'm picking on Bob [Robert Frank] here now, but respectfully, I hope. And I'm making the same challenge to you, which is: It's all well and good to say, 'We need better oversight,' or 'We need better auditing.' Why would they do a good job? What would be this incentive structure and power that they would have that would be different than what the current structure has, which is not very good? Again, I'm not an anarchist. I'm not saying we should have no regulation or no government because it's poorly run. But, there are a lot of things government does, I think, that are poorly done. It's okay that they do it, like pollution control. And they do it badly: they respond to political incentives. But it's probably a better world with that bad, politicized pollution control than having none at all. Probably. But, so, how would we get there from here? What's your idea for what this all-wise COO--it's a great idea, by the way. The President, for example, is really bad at running the Executive Branch--can't, really, it's too much-- Arnold Kling: And, no experience. I mean, Obama had never supervised an organization larger than a Senate staff; and he had no idea what he was getting into. And very few have. I think the last President with real broad administrative experience we had was Dwight Eisenhower, who I think was underrated and pretty good compared to what followed. Russ Roberts: He was a President in the 1950s, for those listening, in the United States. Arnold Kling: Yeah. We have very little [crosstalk 00:30:59]-- Russ Roberts: As we date ourselves. Arnold Kling: Right. Well, I have no memory of him, actually--of watching him on TV. Russ Roberts: Neither do I. Arnold Kling: Right. Russ Roberts: I was four. I think I was, excuse me, I was six when he left office. Arnold Kling: But, yeah. I think you need that level of administrative experience to really run the government. And of course the President has other jobs as well besides just sort of running the agencies, and he has very little control over the agencies. The agencies are created as independent and they're--I think I once calculated, in the org chart there's something like 150 direct reports to the president. And, no corporation has 150 direct reports to the CEO. So, yeah, there is just lots of room for somebody who comes from the business world, a COO of a large corporation to organize things and make people accountable. There's definitely room for improvement--as you know. And then the question [crosstalk 00:32:14]-- Russ Roberts: Yeah, I'm with you there. Yeah, yeah, I'm with you there-- Arnold Kling: The issue of how to get there would be, I mean-- Russ Roberts: We should add-- Arnold Kling: Yeah, a few steps at a time. Russ Roberts: We should clarify: a COO is a Chief Operating Officer, often of a large corporation, responsible for day-to-day execution of the goals of the organization. Having such a person in government seems like a very good idea. The question would be: What would constrain that person? Arnold Kling: I think a few things. First of all, the President and Congress in that model become sort of like Chairman of the Board and Board of Directors, respectively. So, they're responsible ultimately for receiving the reports from the audit agency and for firing the COO if he's doing a bad job. And just generally overseeing their activities, and examining sort of the most important activities pretty regularly. And just saying, 'Here things are going well; here things are not going well.' So, they would have that kind of high-level oversight responsibility. And then the audit agency would hopefully be a very powerful check. If an audit report comes back and says, 'This agency'--let's call it the Federal Communications Commission [FCC]--'is really falling down on the job. Here's point one, point two, point three.' Then, presumably the President and the Congress would step in. If the COO doesn't want to do something about it, the President and the Congress could step in and say, 'Okay, something has to be done about this or the COO is going to get fired, or there's going to be some consequences if these audit issues aren't addressed.' |
| 34:16 | Russ Roberts: Let me try a radical softening of your proposal--you may be more attracted to it--if I could. What if we had, if the only thing the COO ran was the audit agency. So, the audit agency has a lot of power. It has a lot of ability to discover what's going on. It can force open the books, and so on. Now, of course, there are such agencies now in the government, they mainly audit private sector activity, and sometimes-- Arnold Kling: There's things like GAO [Government Accountability Office--sometimes unofficially called the Government Accounting Office]. Russ Roberts: Well, yeah. There is the General Accounting Office? Government Accounting Office? The GAO. But, it's--I challenge our listeners, I wonder if there is--there'd be about something like over 100,000 people are going to at least download this episode, Arnold. They may not all listen to it, I'm sorry to report, but of that 100,000, how many of them have consumed a GAO report? It might be 100. It's not more than 100, I don't think. And it might be as few as 10. So, the GAO does not have a lot of, I would say, traction in encouraging effectiveness. I'm not saying they're ineffective. And they may be a really important agency. It's interesting how little I know about them. But, they don't get a lot of attention. But, what if we took, we created a new one, that was explicitly designed to audit regulatory agencies. It was under the leadership of this, of a COO or an audit president, whatever we call the person. Arnold Kling: Yeah. Call them an 'audit president' just to avoid confusion. Russ Roberts: Yeah. We'll call it the president of the auditing organization. And, all that did, all this agency does is audit the agency that it's responsible for. It might be one for each agency, actually. Arnold Kling: Right. Russ Roberts: And we publicize the heck out of the annual findings. And that's all we do. They have no power: they can't fire people, they can't change policy, they can't reduce budget, they can't do anything. But, all they could do is wave it around. Is it imaginable that a government agency like the FDA, or the CDC, or the FCC [Federal Communications Commission], or the Fed would ever quail in fear, quake in fear of--why did I say quail? I think I meant quake--quake in fear of that annual report that could highlight, let's just start with embarrassing things. Is there any way we could use public shame as a way to encourage performance? I mean, there are a lot of places that don't--that are scared of being observed. A lot of agencies, a lot of organizations don't want to be publicly--now, it could work the opposite way, of course. It could be so frightening and so discouraging that they would be more cautious than we'd want them to be. But, anyway, does that have any appeal to you? Arnold Kling: I mean, yeah. You know. That gets to this whole balance of power issue. In the absence of a chief operating officer, would a powerful audit agency be effective? And, I think it would have too little power because of the problem that you highlighted with the CDC and the FDA: There's no one to take responsibility for the decision. The bureaucracy just has so many--it can just absorb criticism without doing anything. And, the goal with a COO to get somebody who's experienced in business and can't live with that. A business--a COO can't be defeated by his own bureaucracy. I mean, if something really important is wrong, he has to be able to fix it. He or she has to be able to fix it. That's why I think that that's an important part of the proposal. Russ Roberts: But, I mean, think about this. A lot of economists, especially market-oriented economists, like to blame the FDA. It goes back to Sam Peltzman's paper that suggested the FDA's caution in approving drugs has cost so many lives because it's raised the cost of compliance to such a point that it discourages innovation, and so on. Then what economists then say is, 'Yeah, because the committee that votes on such a drug, if something bad happens they'll get blamed. And if something good happens they aren't going to get much of the credit.' But, I'm not sure they get blamed. We're talking about a case right now where they don't get blamed. We don't know who they are. What difference does it make? I don't think it's a secret that there's no one to point blame at, to point the finger at. It's just, I'm not quite sure what the reason is. It fascinates me, actually. Arnold Kling: Yeah. Well, it is an interesting question, but I think it probably goes to the incentives and organization of government. The goal of the chief operating officer is to shake that up and maybe change that. But, there are just countless examples of--you know, somebody comes in, a political appointee, and can't get the bureaucracy to change. And maybe the same thing would happen to the chief operating officer: just, for all his effort and so-called power and publicity might end up being absorbed by the blob. I mean, it could happen. But, I think that's a tough challenge. |
| 40:22 | Russ Roberts: Well, before we leave this topic, I want to ask you about government bureaucracy generally. There are a handful of places that I know of, and there might be more, where the bureaucrats that we're talking about have a positive reputation. They're respected, they're thought well of. And, I think that's quite rare in the United States, but it's not rare, at least, in my vague understanding, in places like France. Historically, China has been known for its well-educated and high-level bureaucracy. I think of Whitehall in England, the Foreign Service-- Arnold Kling: Or Singapore-- Russ Roberts: Singapore. I don't know if those are true, but what I think is true is that there are cultures in foreign countries that respect the people who have the task of enforcing the laws and the regulations. And, you talk--we didn't get to talk about it--but, in your essay you talk a lot about we need to improve the culture of the bureaucracy or the humility of the regulators. This is a very tough thing to do. I'd say close to impossible, but I'll give you a chance to defend it in a second. But, my point is, is that, in America the bureaucratic infrastructure is not well-respected. And, presumably that does not thereby attract the most talented people. We could argue that's a good thing. We could say that's [crosstalk 00:41:42]-- Arnold Kling: I'd push back on that. I mean, if we think people-- Russ Roberts: Go ahead. Says the man who used to work at the Fed. Okay, go ahead. Arnold Kling: Yeah. Well, the Fed is--I mean, there's a lot of deference to the Fed. You know. People just want to throw more responsibilities to the Fed. During the debate over health care, former Senator Tom Daschle said we need something like the Fed to oversee healthcare. The Fed is the classic example. The CDC was an example, and even some people to this day say, 'Listen to the CDC, they're the experts,' even though a lot of us have lost respect for that. There may be, in America, this kind of residual, populist, anti-elite, anti-expert point of view. That's definitely there. But, I think the real problem, or a real problem, is among the so-called experts themselves. That could almost lead into our second topic. |
| 42:28 | Russ Roberts: Yeah, let's do that. We have 20 minutes or so. This is a really--so, Arnold, your first idea, I'm going to give a B to maybe, a B- if I were a harsher grader. When I was younger I'd have given at best a C+. It's interesting; it identifies a serious problem. I'm not convinced by the solution. I know you're not, like, convinced of it either, but it's a provocative idea. Your next idea is even crazier. So, go ahead. Arnold Kling: Okay. Those of you who are familiar with fantasy sports, the idea is you pick a team of players, I'll do baseball even though most people do football. But, you pick a team of players and their statistics are aggregated and you compete with other fantasy owners and the ones with the best statistics wins. I thought-- Russ Roberts: There's a set of rules about how the statistics are aggregated: it's not just batting average. It's going to be a whole bunch of things, and those are all adding different points to your team score. Yeah, yeah. Arnold Kling: Yeah, right. So, what I created for a couple months--it proved to be a little bit too much work for me--but something called Fantasy Intellectual Teams where I'd--first of all, you have to come up with statistical categories for intellectuals. The idea was that if on your team you've picked your fantasy intellectuals, the people you want to follow. So, you could follow Russ Roberts, you could follow Tyler Cowen, you could follow whoever. And, you take their writings and their podcasts and you try to--and we count points. Well, the crucial thing is: how are these points counted? I think I had eight categories [crosstalk 00:44:42]-- Russ Roberts: I think Number of Podcast Episodes, Lifetime would be an important score. Okay, go ahead-- Arnold Kling: Sorry. Sorry. But, Russ actually scored a lot of points for asking Devil's Advocate questions. So, that was one of the scoring categories: it's provoking the guest into answering a tough question. Another thing was thinking in bets. So, actually stating the odds of your position. Another category was caveats: admitting that there could be a problem with one of your proposals. Another one was showing an open mind, showing a willing--saying, 'I would change my mind if.' Like, recently Larry Summers said, 'I would change my mind about these deficits' being inflationary if such and such happened.' That was a very clear open-mind point that he would have scored. Looking at research, not just, 'This supports my point of view,' but really evaluating the quality of the research. So, Scott Alexander and Emily Oster are great examples of people who do that. And Russ is holding up his hand, saying, 'I do that.' Russ Roberts: No, I wasn't. No, I was going to say Scott Alexander wins that category beyond--I mean, no one is writing today, in my view, as objectively and fairly as he does in assessing our state of knowledge about a question based on the research that's out there. He looks at it incredibly thoroughly; he appears to be open-minded about it. He critiques his own side. He scores points relentlessly on the Kling Intellectual--Fantasy Intellectual Team. He's a superstar. Arnold Kling: Yeah. Russ Roberts: I like Emily, too. She's coming to EconTalk soon to talk about her new book, so, no problem. Arnold Kling: Yeah. So, anyway, so the basic goal of this project was to take the status-producing things away from Twitter Likes and Facebook Shares, and give it to these points, so that if the public were paying attention to these points, they would be looking at more rational discourse, less tribal discourse. And the result would be to raise the status of the Scott Alexanders and Emily Osters, and lower the status of the, sort of, partisan hacks. Russ Roberts: Yeah. You don't have to name them. Go ahead. Arnold Kling: Yeah-- Russ Roberts: So, it's a brilliant idea. Of course, as you point out, the implementation depends on how you keep score. And, the methods that you mentioned, the only problem there is that showing up in somebody's blog that has 43 readers and saying, 'I might be wrong,' is different than saying that in the New York Times. So you'd have to--you could weight for that, correct it by weighting the venue, and all that. And, somebody has to keep track of public pronouncements of those folks. Arnold Kling: Yeah. Another issue, and this is something raised by a couple of--I mean, not that they looked at this topic, but just generically by a couple of fantasy intellectuals, namely Daniel Kahneman and Cass Sunstein is the problem of noise. It's a judgment call whether this person really gave a caveat or didn't, or whether this person steelmanned the opponent--you know, the other point of view--or didn't. So, there were a lot of judgment calls and there are a lot of--and when there's judgment there's going to be what they call noise. You know, just, on a different day I might score a point or not score a point, or two different judges might score points differently. So, there's a lot of work to be done to lower the noise level in your judgments to a reasonable amount. And then a ton of work to be done in getting the--either hiring lots and lots of judges to judge these things, or better yet, developing artificial intelligence and machine learning to learn how to do it. So, I think, you know, with enough institutional resources behind it, you could make something like this work, but I haven't lobbied for that. |
| 49:10 | Russ Roberts: But, the part about it that's fantastic, that I love, is that, as you point out implicitly in your earlier remark, right now the thrill you get as a public intellectual from a nasty slam of a alternative viewpoint which gains you a lot of extra Followers on Twitter or Facebook Likes is the currency of public intellectual life right now, up to a point. I mean, some people get paid for what they do; and how much you get paid though is often related to what you're talking, to the negative side of how much of a hack you are, how partisan you are, how ideological, how arrogant, how ranty you are, versus calm and thoughtful. But, what you're suggesting is that, if you've finished on the All-Star team and you thereby rewarded the people who had been visionary in drafting you, it might change how you spoke and how you talked. We could have, of course--I don't remember if you did this--but you could have a negative team, a team--you could have, it's like golf: You want to have a high score for obnoxious people and a low score for humble people. And the high scorers would have to, again, be embarrassed, and it might change what they say and do. You could take the top 100 economists on Twitter, the ones with--just purely based on the most followers--and do this based on their tweets, and rank them. The problem with that, of course, is that, who cares what you or I think about that? But, if the New York Times published it or the Wall Street Journal, or it got some footing and people started to pay attention to it, you could affect discourse. So, it's a brilliant idea. What happened to it? Arnold Kling: I'd say a couple things--mostly it was just, it was consuming my life for the two months I did it, just doing the grading of these things. And that was with only a few owners. So, my dream was not to get it publicized sort of top-down for the New York Times, but sort of bottom-up by lots of people joining leagues and drafting teams and so on. But, if that had actually happened, I mean, I would have just been a basket case keeping track of all these people. Also [crosstalk 00:51:24]-- Russ Roberts: How many people played? Arnold Kling: I forget. I think I had roughly 10 or so. Russ Roberts: Yeah. Okay. That's what I was thinking, [inaudible 00:51:31] say, seven. Ten is small. Arnold Kling: Yeah. They each pick, you know, like, five people to follow, and that's a lot of people. The other thing--and you'll appreciate this--is that a lot of the highest points scored were not in individual essays, but in podcasts. I mean, I listened to more podcasts when I was doing this than just the rest of my life put together. Because, it turns out--I was forced to think about this because it surprised me how strong the podcasts were--it turns out that having another person in the room makes you be more civilized. Russ Roberts: Yeah. For sure. Arnold Kling: And, just an awful lot of the points were scored in podcasts. Robert Wright was great. Coleman Hughes. I mean, Glenn Loury and John McWhorter. Andrew Sullivan did better in his podcast than his essays, and so on. Just-- Russ Roberts: But, it just adds another category. Right? The gap between your podcast and your--I mean, it'd be better to have the gap between your, say, essays and some [inaudible 00:52:49] say, high-end newspaper versus, say, how you acted at your dinner table. But, we don't usually have access to that. And, I've noticed that many times by the way on this program. One of the things that frustrates me a great deal, and I'm not good at dealing with it, is the guest who writes a really nasty book; but when I interview them they're sweet and kind, and somehow they don't have those criticisms they did in the book. There are a lot of possible reasons for that, but again, no one holds them--I should hold them accountable, and I'm not so good at it. But, if we had a way to hold them accountable that they were inconsistent, that would be a cool thing. Arnold Kling: Yeah, I agree. But, yeah, I wish we had more content generated in podcasts but all those podcasts have transcripts, because it's so much, it's so time-consuming to listen to them. That's the downside of them. |
| 53:46 | Russ Roberts: So, one response to this would be: Well, you did it for two months; it's a pain in the neck, so you stopped. But, of course, it's an ongoing thing. There isn't a literal fantasy intellectual team. But, just by laying out the principles of what you think would make a good expert that is thoughtful, respectful of the other side, willing to admit that they're wrong, and so on, these are things we can all take with us and can all use to evaluate--maybe not attribute a particular exact score as to who's better than someone else, but I just raved about Scott. Scott Alexander is a phenomenal--I hate the term 'public intellectual,' but that's what he is. Call him a commentator if you want or something else. But, he's an academic who's not at a college. Just like you are, right? That's a real public intellectual, actually, is a better way to say it. And, they're incredibly valuable, people who are able to do those things. It's interesting that it's not necessarily where most people find their sweet spot. They tend to be more drawn to the alternative system that you were critiquing earlier. And it's just interesting to think about ways that we might-- Arnold Kling: [crosstalk 00:55:00] or to just what I would call go-along-to-get-along system. Like, there was just--Tyler, just this morning, linked to a guy's Twitter feed on how to be a successful academic economist. It says, 'Well, when you're earning your Ph.D. thesis, don't work on any major questions because that's too risky. Just do something straightforward.' And it's like-- Russ Roberts: Slice the salami. Take another slice off the salami. Arnold Kling: Yeah. There's just--there's a lot of that going on. People just trying to keep their--duck their heads. They're obviously not public intellectuals, but I think that's the more typical academic. Anyway, the--no, I think, a lot of, about half of my Substack essays are, I call them catching up with the fits [inaudible 00:55:58] of the intellectual teams. I just take, mostly, people who are highlighted as fantasy intellectuals and point to things where they kind of exemplify their reason discourse, so that people can--if people were to read the links on those things, they would see, you know, what good reason discourse looks like and so they would keep it top of mind. |
| 56:30 | Russ Roberts: What's going to happen to this? And the answer is nothing in the short-run because you're too busy and it just was too much work. But, I think it's a fruitful question-- Arnold Kling: Also, I think it's ahead of its time or weird of its time. It's kind of an oxymoron. Something like, you know, take: How many people are interested in fantasy football and following intellectual discourse? It's an interesting intersection. Russ Roberts: Do you play fantasy football, by the way? Arnold Kling: No. Of course not. I'm way too snobby for that. I only play fantasy baseball. Russ Roberts: Do you play fantasy baseball? Arnold Kling: Yes, I do. My team has emerged into first place. Amazing luck. I have the Toronto Blue Jays offense. People forced me to take it and I took it and they are, yeah [inaudible 00:57:21]. Russ Roberts: Good year for you. |
| 57:26 | Russ Roberts: But, I think it's worth thinking about. I mean, I think it's an incredibly fun idea, and I think rewarding quality expertise with honor--which is what your effort is about, was about--is a lovely idea. But, I think it's worth thinking about what else might encourage that kind of improved performance on the part of experts. Right? It would be really fun for somebody in authority--either intellectual authority or actual authority--to say, 'I really messed that one up.' You don't hear that very often. You'd score a lot of points. That one might be--you might just overweight that in the--actually I think I maybe should write a book with this idea where you could highlight, you know, the all-stars and the people who should be relegated to the second tier, if I could use a European football analogy. Arnold Kling: Yeah, yeah. But, yeah, possibly, that's an interesting thought. But, yeah, somehow I think the process by which people get to the top in terms of status has really fallen apart. It's particularly noticeable in academia and journalism. I think--I just don't think--maybe some of the best journalists end up at the New York Times and Washington Post, but it seems like a lot of the worst ones do. And there's not great quality control. [crosstalk 00:59:12]-- Russ Roberts: Based on what criteria, are you/we making that bold claim? Arnold Kling: I'd say-- Russ Roberts: Reliability? Honesty? Arnold Kling: Well, first of all, non-partisanship is an important one. Shoe-leather effort rather than sort of opining from their desk. The real investigative reports. I mean, look: you've had some on yours, like Sam Quinones. You know, there's still some real shoe leather journalism being done but it shows up in odd corners like that rather than in mainstream, in the leading outlets. And the claim is that it's too expensive to do real shoe-leather reporting. Russ Roberts: By shoe-leather reporting you mean people going out and actually digging around, trying to find what's going on, interviewing lots of people, traveling and so on. I'll mention-- Arnold Kling: Going back to what you said about the earlier thing: Why can't journalists be the ones who audit, you know, regulatory agencies? First of all, the amount of expertise required, and then the time and effort, and then no monetary reward for it. I mean, if you expose the mistakes made by the Federal Communications Commission [FCC], how many clicks is that going to get? Russ Roberts: Yeah, well, that's a different problem. I mentioned that I think it will be out by the time this comes out, Sam Quinones has a new book out called The Least of Us, that we'll be coming with a conversation about that. But, I think the idea of ProPublica was this idea that, bankrolled by a large philanthropic effort, journalists would have the freedom and the resources to dig deeply into various issues. And I think they've done some, quite a bit, actually. I don't read them carefully, but every once in a while something comes across my screen from them that's thoughtful and interesting. And maybe that was a long time ago; I don't know if they've maintained that quality. But, it's a lovely idea. And, it's not the greatest idea that--unfortunately in today's world, as you point out, not everybody wants to pay for it. So, that's just the way it is. Arnold Kling: Yeah. |
| 1:01:40 | Russ Roberts: Anything else you want to add? We're almost done, but anything else you want to add about expertise and the current state? As you point out, I think one of the most depressing things about the current world is how hard it is to figure out who's actually a reliable expert. I think there are still some out there who you can trust. It's gotten harder despite the fact that we live in a world with more information. That paradox is something we've talked about on the program, but what are your thoughts on that? Arnold Kling: I think the focus ought to be on the selection process. Of course, the Fantasy Intellectual Teams is a clear attempt to revise the selection process, at least for some types of people. Somehow--I think you've talked about this before many times--the selection process selects against humility. I mean, people want you to sound confident and assured. Someone like me who, I'd say, 'Well, on the one hand, on the other, here's a caveat'--that's not who we select for. And, whose fault is that? In some sense maybe we've met the enemy and he is us. But, selecting for the Scott Alexander--in a fair world, we would select for the Scott Alexanders of the world and not the people who sound so self-assured and, you know, seek a lot of personal power and glory. Russ Roberts: My guest today has been Arnold Kling. Arnold, thanks for being part of EconTalk. Arnold Kling: Thanks. |
READER COMMENTS
Infovores
Oct 4 2021 at 9:07am
Great to hear Arnold’s Fantasy Intellectual Teams discussed on the program! I write about my experience as a participant here:
https://infovores.substack.com/p/what-i-learned-from-fantasy-intellectual
Paul A Sand
Oct 4 2021 at 9:53am
The GAO recently released a report on the multiplicity of agencies giving food advice/regulations. Pretty clearly duplicative efforts, probably somewhat cross-purposed, and (it’s the way to bet) many if not all victims of regulatory capture.
The MSM reporting as near as I can tell was zero. The only way I heard about it was an article at Reason.
I don’t think enough people care about this stuff to make Arnold’s reforms politically realistic.
Arnold Kling
Oct 4 2021 at 11:06am
Having a Chief Operating Officer raises the question of what role Congress and the President should play. I think that one of their roles would be to make sure that audit reports don’t just collect dust. Make sure that the COO cares about them.
Floccina
Oct 4 2021 at 3:32pm
It seems to me that Government functions have grown to broad and so it would be better if we elected people by function. Elect one guy to run the military and state department, another guy to run government health insurance. Obviously the USA probably will not get there but perhaps some country coming from a dictatorship.
Jon Breslau
Oct 4 2021 at 6:11pm
Thank you for media that reminds people that there’s more to Libertarianism than “Hulk no like state, state is bad”. Too many think that if there were a majority Libertarian government, the first thing it would do is melt down any traffic light or signal, any government record keeping (ex: Bureau of Labor Statistics), or any entity provides guidance or information (ex: State department travel advisories).
I feel much of Libertarian thought is “I’m not sure if the state should do this, but if it does, let’s make sure it does it well”. I think more than any faction, since we view taxes, laws, and establishment as such an onerous, easily exploitable thing, we in equal amounts want such things done well, fairly, and transparently.
I dislike property taxes, the government education system, and government-administered welfare. What I hate worse? Those things done poorly, deceptively, secretly, and with blatant political bias.
Libertarianism is a big tent. We shouldn’t gatekeep it by saying “Only anarchists need apply”.
Kenton Hoover
Oct 4 2021 at 9:00pm
As to executive Presidencies, both Carter and Reagan had been governors of states with sizable administrative structures. While Eisenhower certainly ran a large administrative body as SACEUR, the parameters are slightly different when you can fire anyone at will rather than dealing with an entrenched civil service.
While the two examples of state-capacity libertarianism were nice, the “naive libertarian” position seemed as cartoonish as the support for the state-capacity form seemed lacking. I’ve had an issue with state-capacity libertarianism not because I think it has deep flaws but because the definition never seems to be given strictly enough to see its limits.
Lastly, the COO & Department of Audits sounds great. In fact, it sounds an awful lot like the existing Article I and II parties of the Congress (exercising oversight) and the President presiding. It doesn’t seem like we need new agents as much as we need a manner to better evaluate what we have. I have been mulling over a Congressional metrics approach; there is an existing one but it is scored almost entirely on proposing legislation and getting it passed and not at all on things like committee hearings and laws voted down (which can be as much a positive but admittedly harder to score in a neutral manner).
Luke J
Oct 5 2021 at 12:59am
Count me in with the libertarians still complaining about the DMV. Here in Oregon, we reportedly have a 3 month backlog due to covid-related office closures and RealID act deadline. In May, our Gov. put a moratorium on citations for expired driver licenses, permits, vehicle registration and disabled parking placards. I bought a vehicle in June and I’m still driving with the temp. tags.
Chad Assareh
Oct 5 2021 at 1:33am
Arnold’s suggestion about the COO model seemed to also include the assumption that it would be a person with experience running large/successful firms like a Fortune 500 company. I foresee the compensation delta between public and private sectors as being too high for someone like that to take these government positions.
Generalizing that thought to all government positions, I’ve always wondered whether increasing government worker compensation would improve government efficiency/effectiveness and avoid bureaucracies. If salaries were raised to meet or exceed a top paying public sector position, then I’d expect we would also find the competition amongst workers to hold these jobs would also increase. The incentives created by the competition to earn and keep a highly sought position should be enough to establish a high functioning organization throughout the ranks.
I suspect that prestige of holding a government position varies widely between countries/cultures, it’d be interesting to see some research into how that correlates to good governing.
M Boardman
Oct 5 2021 at 5:06pm
I am grateful to Arnold Kling for “The Three Languages of Politics,” among other things. But what he envisions requires a change to the Constitution. The administrative state already lacks constructional legitimacy, and I’m afraid that giving administrative actors more independence (of the CEO variety) only worsens the constitutional defect.
To be transparent about my priors, I’m also not convinced that trying to keep the “newly useful” part of government in a complicated age while eschewing the “bad by libertarian standards” part is possible. But I am quite certain that much good would come of Kling partnering with a constitutional/administrative law scholar. I’m a law prof but not that kind, so I won’t offer my services.
Todd Weiler
Oct 5 2021 at 7:45pm
At around the 30 minute point, Messers Kling and Roberts discussed the former’s suggestion that government could be made more effective if there existed a governmental auditing agency with a whole-of-government purview, which would publish annual reports that would engender improvement under the threat of public shaming.
For what it’s worth, just a such an organization exists in [North] America. It’s called the Office of the Auditor General of Canada. Each Canadian province has one too.
Thanks to our first-past-the-post electoral process (with more than two parties participating), we too often get majority governments that are able to ride out the scathing criticism that is often to be found in an auditor general’s annual report. But if the election is near or a minority government has been elected, an auditor general’s report can have quite an impact.
So, just look north, gentlemen. It’s no panacea, but it’s a real-life mechanism to consider.
Greg Ross
Oct 6 2021 at 10:26am
Arnold’s claim for a need for a government COO is based on the recognition that government lacks market forces which create great inefficiencies. But isn’t there a remedy for this already in the Constitution? The broad reaching powers of the vast administrative state is not authorized by the Constitution. Per the 10th Amendment, those numerous powers were reserved to the states and the people respectively. Competition among the states addressed this problem previously. Do we really need to recreate the wheel, when the system we discarded worked so well?
Richard Fulmer
Oct 6 2021 at 3:07pm
By pejoratively labeling his philosophical opponents, “naive libertarians,” Kling tries to win the argument without having the argument. He then goes on to demonstrate his own naivety.
For example, his “big” idea is to run government like a business, as if:
Politicians since at least Herbert. Hoover haven’t run on the idea, and
Attempts to implement the ides haven’t all failed miserably
He proposes appointing COOs to run agencies without addressing the issues of:
Who selects the COOs and what qualifies them to do the selecting?
What prevents the jobs from being handed to political cronies or to big campaign donors?
COOs need to be able to make personnel decisions and have the ability to hire and fire. Government rules and public unions make firing very difficult. How will Kling handle this?
Government managers have an incentive to increase their agencies’ headcount. How will Kling change this incentive given that there is no profit motive to discipline the COOs?
Will there be a huge personnel turnover every time a new president is elected? If so, what will this mean for the effectiveness of Kling’s big idea?
Government agencies have an incentive to use up their budgets every year rather than economize. How will Kling change this incentive?
Kling wants government to ensure the stability of our electrical grids but ignores that government green energy mandates are a big reason that our grids have become less stable.
California has banned building new coal, natural gas, hydroelectric, nuclear, and bio-waste power plants and is closing such plants that currently exist. Yet Kling is apparently now joining Gavin Newsome in declaring that the “free market” is failing to keep California’s lights on!
The story is similar in Texas. The state government has mandated that power companies invest in wind power. During last February’s freeze, there were blackouts largely because of the failure of the state’s traditional power plants. The defenders of wind power rightly point out that wind turbine failure wasn’t a factor because the turbines don’t work in the winter and the power companies weren’t counting on them. Think about that as a “defense.” We can’t rely on the power sources the government demands that we rely on!
Kling declares that the FDA and the CDC shouldn’t have screwed up the COVID response. And he proposes waving the magic wand of agency auditors to prevent future screw ups. But we have a long history of regulatory capture, and what is an audit agency if not a regulator? What prevents the FDA from capturing the FDA auditing agency?
Kling’s claim that government can be run like a business simply ignores public choice theory and the well-documented history of government failure.
So, let’s back up and actually have the argument about which libertarians deserve the label “naive.”
Andy McGill
Oct 6 2021 at 4:55pm
If you are going to talk about “accountability”, then let’s be accountable.
Arnold Kling: There’s things like GAO [Government Accountability Office–sometimes unofficially called the Government Accounting Office].
The General Accounting Office was renamed the General Accountability Office in 2004 in the GAO Human Capital Reform Act.
So, the GAO does not have a lot of, I would say, traction in encouraging effectiveness. I’m not saying they’re ineffective. And they may be a really important agency. It’s interesting how little I know about them.
The GAO is not a federal government agency. It is the research staff of the U.S. Congress and a part of the Legislative Branch. It is categorized as a federal legislative agency. It does NOT report to the President and the President has zero control over it.
The GAO is an import budgetary audit entity because the Legislative Branch is in charge of appropriations. But Congress has to do the enforcement — they have no direct control or power in the Executive Branch.
Alan Goldhammer
Oct 6 2021 at 6:05pm
I read a bunch of GAO reports during my days and the utility is extremely variable. I was also involved in the original negotiation of the Prescription Drug User Fee Act (PDUFA) and the four subsequent reauthorizations. One of the things we worked hard to achieve was to improve both transparency and performance standards in the drug review process. There is a lot that goes on behind the curtain prior to the drug approval process. I think we were about 70% successful in achieving our goals. FDA published yearly progress reports on meeting the goals.
Jason Ligon
Oct 7 2021 at 1:47pm
I just wanted to suggest Arnold’s model of the COO and Auditor may be conflating two functions that are distinct in corporate structures.
An auditor’s job is to mitigate risk by confirming in various ways adherence and transparency to a set of minimum governance standards. It is fundamentally interested in “we say we are doing X specific thing but sample testing indicates we are doing Y very often”. The goal is to create a control environment that prevents large systemic risks to develop. An example might be customer intake via some open text box online vs customer intake via some specified input box that didn’t allow invalid or irrelevant data in. The former creates interpretation burden by various humans and may result in systemic inaccuracies. The latter is a control on the intake process. This is what audit cares about.
OTOH, there is the issue of performance against some Key Performance Indicator. This is different in that it is looking at here are the stated measures of success. Are we hitting those or not. This is fundamentally not an audit issue but a COO type issue. Leadership decides the KPI, COO creates a regime of incentives to execute against the KPI.
So when we talk about CDC v being ineffective, we have to ask are they failing through their control environment to mitigate systemic risks (failing audit), are they failing to meet specified KPIs (COO), or is there a lack of coherent measurable KPIs that line up with expressed goals (CEO).
Arnold Kling
Oct 8 2021 at 8:25am
I have worked in an organization that had an internal audit function that focused on more than just compliance. I have in mind such a broader concept.
Seth
Oct 7 2021 at 3:01pm
I enjoyed the discussion. I have a couple thoughts:
I think Arnold knows this, but blame-avoidance-bureaucracy is ever present in business, as well. As he mentions early on, the best feedback on this is competition.
It struck me as I watched Arnold’s FIT that a key problem he’s trying to counter is the comment governance on social media platforms. The “like”+block environment on Twitter, for example, doesn’t appear to naturally foster productive exchange that would encourage the types of things that Arnold was scoring folks on the FIT. Maybe there are other environments where more productive exchanges could emerge?
A thought as an example. For Twitter, I think (and maybe these exist and I don’t know) it would be useful to have an AI filter setting where I might collapse all the comments that are ad hominem attacks. If I want to see the ‘sick burns,’ I can choose to, but if I want to avoid scrolling through all of them to find the 1-2% of comments that make thoughtful points, I can keep the ad hominem attacks collapsed.
JonB
Oct 9 2021 at 11:54pm
The solution to regulatory bloat is simply competition among different regulatory schemes. The incentive of the bureaucrats now is to stay relevant if the market finds another credentialing process more credible and practical
Example 1: FDA drug-approval for aggregate disease (expensive and slow) OR N=1 Right-to-Try trials which are exempt from administrative review by statute.
Example 2: Prison vouchers. Upon sentencing, each inmate is given a voucher for X dollars and allowed to select from competing for-profit prisons.
Example 3: Either FDA drug approval or European drug approval allows for legal prescription.
Example 4: allow a choice between state and Federal EPA mandates
Rinse and repeat for every regulatory agency. I can hear the scream from Washington now….
Improved command and control as a solution is just digging the hole deeper. Stop digging…
Alex
Oct 12 2021 at 9:31pm
I’m sorry. Your both Ivory tower libertarians. The pandemic examples you chose are misguided. New Zealand and Australia have death rates 1 to 2 orders of magnitude smaller than the US Show us the libertarian example
Dave Robert’s the climate change Econ trained ex Vox reporter now at Volts sums up “libertarianism” best.
“this is what the ex-libertarians at Niskanen realized — if you simply remove gov’t restrictions, the economic & social spheres end up crushing freedoms just fine on their own. Lack of gov’t restraint unburdens the already-powerful, but only at the expense of others.
So if you want the most freedom for the most people, you end up needing something like the high-tax, high-redistribution Scandanavian states.
The larger point here is that philosophies that focus on unlimited negative freedoms, like libertarianism & laissez-faire hold immense appeal to groups & demographics who enjoy entrenched social & economic power, because, under the guise of fairness or procedural neutrality, they reprise existing power relationships.”
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