of a Washington Reject
by Gary North: The
Next Financial Crisis
this for Remnant Review in 1977. Multiply dollar figures by 4 to
correct for price inflation.
the middle of June 1976, through January 3, 1977, I was serving
my country on a full-time basis, meaning that I was deep into the
Federal trough, but not paying Social Security taxes. When it is
all said and done, not paying Social Security taxes for seven months
was probably the single most important benefit I received for my
stay in government service.
serve as an introduction to the nature of government service. I
was an employee of the sovereign state of Congress. You think I'm
joking. Not a bit. It is indeed a sovereign state. First of all,
it employs its very own police force, and the force is probably
the fourteenth or fifteenth largest police force in the United States.
Second, Congress has wisely determined that laws passed by Congress
to protect this nation's citizens do not apply to Capitol Hill.
That, one must admit, is a sign of sovereignty. Equal Employment
Opportunities Commission bureaucrats have no authority on Capitol
Hill, so the secretaries are better looking, lower paid, and work
harder than in other businesses. (The good-looking ones, by the
way, are not the over-worked ones, if by work you mean typing.)
Nobody has to hire minority group members, except for political
reasons. There are no contracts. Congressmen hire and fire at will.
Or at least they think they do. (We will cover that a little later.)
There is a great pension plan, assuming anyone is so stupid as to
believe that any pension is great in an era of inflation. But you
do not have to belong to it. The boys at OSHA do not prowl around
the halls of Congress, since they would be able to shut the place
down if they were allowed to apply OSHA rules on safety. There are
no Nader belts on the official cars of Congress, unless the Congressman
wants them. You cannot subpoena a member of Congress for anything
relating even remotely to his official duties. You must subpoena
the House itself, at its discretion, and the House may or may not
compel the Congressman to testify. In short, the rules and regulations
that are strangling the citizens of the United States do not apply
on Capitol Hill. They know what they are doing at least to this
extent. The pollution of legislation from Congress is matched by
the pollution from Congressional furnaces and Congressional vehicles;
the Environmental Protection Agency has no jurisdiction here. The
Post Office on Capitol Hill is run by Congress, not the U.S. Postal
Service. Congress is the 51st state. Wait! Congress is the first
state; Hawaii is the 51st.
features of Washington politics are not really under- stood by the
average voter. Consider the vastness of the output of activity and
the minimal productivity. In any given two-year term, Congress will
see the introduction of about 25,000 separate pieces of legislation.
This figure includes about 1,500 resolutions. Of these 25,000, about
450 will actually survive the legislative process and be signed
into law by the President. Some of these bills are virtually automatic,
such as the annual raising of the Federal debt ceiling. In short,
535 legislators on both sides of Capitol Hill are able to achieve
about a 1.5 percent "success rate" of proposed legislation
actually enacted. This represents less than one bill per office.
For this we should be thankful. It might have been two bills per
office each term.
this "vast output" of actual legislation, hundreds of
millions of dollars are expended on staff salaries, office supplies,
plane trips, and computer hook-ups. A Congressman receives over
$260,000 for staff salaries each year. He can hire 18 people with
this money. Senate staffs receive up to $650,000, in the case of
the most populous states.
are printing costs. The Government Printing Office produces 200
pages of the Congressional Record each day at an estimated $300
per printed page. It is sitting on each legislator's desk the day
following the proceedings, waiting to be read. (No one ever reads
it.) Then there is the Federal Register, another daily production
of 200-plus pages, filled with new regulations from the bureaucracy,
all having the force of law. For a brief example of what kinds of
material appear in the Federal Register, you can call a taped
message and listen to a summary of the "highlights" of
tomorrow's edition: (202) 523-5022.
pages of these regulations are published each year, in three-column
fine print, most of it incomprehensible. No one but lawyers read
it. This is the law of the land. Congress proposes, but the Federal
bureaucracy disposes. It is a good thing that the Congress can get
only 450 laws passed every two years. If it were more, the Federal
Register would have to start going to morning and evening editions.
are the hearings. A few bills on each side of the Hill actually
make it to the hearings stage. Experts are flown in to testify.
The liberals are flown in courtesy of the majority members of the
particular committee. The conservatives are allowed their witnesses
one day's worth. It does not make much difference. No one
pays the least attention to the testimony. Then the testimony is
printed in several thick volumes. No one reads it. Then the committee
votes yes or no. If it goes to the House or Senate, the bill will
then die, or be amended, or pass. Then it goes to the other branch
of Congress. At this point, the whole process begins again. The
witnesses are flown in to testify, very often the same witnesses.
No one pays any attention. Then the hearings are printed. In one
classic case, the 1976 hearings for the Senate Appropriations Subcommittee,
the hearings were faked. The hearings were to have covered the $56
billion worth of appropriations for various Federal welfare agencies.
Half of the scheduled twenty-four days of hearings were held "live."
The other twelve days were simply reports inserted by witnesses.
Yet all eight volumes of these reports were printed as if they were
held "live," with greetings from the chairman, a few faked
questions and answers, and a pleasant goodbye to each witness. There
was no way of distinguishing "live" from "dead"
testimony. Nevertheless, we have 4,500 pages of fine-printed hearings
for the record. And for the record, no one will ever read them.
(An account of this classic deception appeared in the Washington
Star for October 4, 1976.)
This was the
world I entered when I joined the staff of Congressman Ron Paul
of Houston, in the summer of 1976. He had been elected in an interim
election when the seat was vacated by a long-term Texas Democrat
who had resigned to accept a position on the Maritime Commission.
Dr. Paul came to Washington in April. He was defeated by 268 votes
(out of 193,000-plus) in November, and if his Special Report
(June 1977) is to be believed, only about 3,100 of these votes,
mostly for his opponent, were flagrantly illegal, indicating that
for Texas politics, this was a fairly clean race. In short, he was
America's only Bicentennial Congressman: elected and defeated in
Dr. Paul was
as amateurish a politician as I have ever seen. He believed in principle
and voted that way. He did not have an administrative assistant,
so he hired his own staff. He never went on junkets. He was consistently
outvoted by 403 to 3, or 407 to 2. Instead of going to the endless
rounds of lobbying "socials," where the booze flows, the
food is superb (unless some cheapskate right-wing group is putting
it on), and off-hours business is conducted, he would go home after
work to his aunt's house out in the Virginia suburbs. He left his
family in Texas, flew home on the weekends, and (you won't believe
this) spent the time with his family instead of campaigning. He
voted against NASA's boondoggles, despite the fact that NASA was
in his district. He voted no on everyone's boondoggles. In short,
a clear-cut amateur. He lost.
Yet, in his
brief stay in Washington he made a lot of headlines, something which
mid-term, unknown, freshman Congressmen do not do very often. He
fought against abortion, gun control, inflation, and higher taxes,
yet he confounded the conservative wing by fighting the B-1 bomber
in favor of the cruise missile and the atomic submarine program.
He opposed Federal guarantees to the atomic power industry, another
vote that astounded both liberals and conservatives. He baffled
them all, simply because he voted small government, start to finish.
No one in Washington I repeat, no one does that on a consistent
The day I walked
in, I was told to draft an opposition statement on the International
Monetary Fund bill. I had not heard of the IMF bill. This was the
disastrous piece of legislation that revised the Bretton Woods Agreements
after thirty-two years the first major revision. It made
the IMF the world's new engine of mass inflation. ("The Transformation
of the IMF," Remnant Review, August 4, 1976.) The Administration
was pushing it with all its might. The Democratic liberals were
pushing it. So I sat down, and by Saturday afternoon I had nineteen
double-spaced typewritten pages cranked out. We had to have them
at the printers by Monday at noon, since we had been told that we
had until Tuesday at noon. Sure enough, Congressman Gonzalez's opposition
statement, submitted "on time," was too late. When shrunk
by the typesetting process, my (Dr. Paul's) statement was 11 pages
long the only opposition statement. In the Congressional
Record, it was shrunk to 3.5 pages, yet it was word for word what
I had submitted. (If you think there is a lot of stuff cranked out
each day by government writers, you are correct. It boggles the
mind.) The bill finally was passed at 5 A.M. on the last day of
the 94th Congress in the Senate's chambers. There was no opposition.
(A trade had been made: the IMF for the legalization of gold clause
contracts.) One of the co-sponsors of the IMF bill, who sat on the
House Committee on Banking, Currency, and Housing, admitted to Dr.
Paul that he really did not know anything about the IMF. If he did
not know, you can be certain that at least 300 of the 435 House
members do not know, and that may be too generous. It passed, ignorance
So it went,
bill after bill. The billions flowed. The opposition capitulated.
The conservatives were out-talked, outmaneuvered, outspent, and
out-voted almost every time. Occasionally, we won one, like the
Hyde Amendment (no Federal money for abortions), but rarely. It
was one long, difficult, grinding series of defeats. It will continue
to be so.
Is it any wonder
that people with principles get eaten up and spit out by this system?
How to manage 200 pages of Congressional Record every day, plus
the hearings in committee, plus the Federal Register, plus the speeches
on the road, plus the party (political organization) pressures,
plus the party (riotous escape) pressures? No one can do it. No
group can do it. The dreams of messianic legislation and comprehensive
political predestination have not come to heavenly fruition, but
they have driven mad those who had such visions. The pursuit of
total planning has eaten up the legislators who assigned to themselves
the role of minor gods. The work is killing, especially in the last
fifteen years. They are retiring in droves. Something like 50 percent
of the men in the House in 1977 weren't there in the late 1960s.
The whole system is collapsing, and both the conservatives and ideological
liberals know it, but the conservatives can not do anything about
it, and the liberals won't do anything about it. They are caught
on a sort of demonic treadmill to legislative oblivion.
get ground down. They give up after three terms. I will not mention
any names, since we can be thankful for whatever "no"
votes we get, but these men have let their constituents down. One
man always promised to lie low for three terms, get the ropes learned,
and then really get things changed. With every term, he has voted
for more and more welfare boondoggles. He chases secretaries, is
not bright enough to read very much, and his staff is mediocre,
meaning it is one of the better staffs. Yet he is considered one
of the hard-liners. The pressure on them by their peers is enormous;
indeed, this is the crucial factor in the decline of the conservative
opposition. Congress views itself as a club. The Senate is notorious
in this respect. They have little use for the rabble in the House.
They are gentlemen. Fortunately, like gentlemen, they do not get
much accomplished each day. They are the brake on government planning,
not by ideology, but by inertia. Inertia grinds down the conservative
opposition, too. So the booze flows, the secretaries smile, and
the wives get dumped. Yes, Virginia, by conservatives, too.
Let me tell
you of the catalogue of horrors.
Seldom in the
history of man have so many incompetents, cronies, idiots, goof-offs,
hangers-on, and nincompoops been assembled in one geographical area.
The mediocrity of the Congressional staffs is, above all, the fact
that struck me hardest. Grafters are to be expected in government,
but these people are yo-yos. You would not believe how second-rate
these people are. I am speaking about the conservative staffers.
You are fortunate to find one good, solid, competent staffer per
It is not the
lack of money. Congressmen can pay up to $50,000 per year to some
staffers. They could buy up the hottest of the hotshots from the
universities in every field, and I do not mean just newly graduated
Ph.D.'s. I mean their professors. You could rent one for his sabbatical
year, year after year, getting big-name people in there who could
call upon the services of students back home to do research. Nobody
has thought of this, apparently. The only office that I saw that
used outside people on a regular basis was Larry McDonald's. He
got his money's worth out of the part-timers. Frankly, they were
the sharp people on his staff.
What goes wrong?
It is a complicated problem. Here is my evaluation. First, Congressmen
do not want to hire people smarter than they are. This reduces the
level of competence to levels undreamed of. Second, they do not
hire anyone anyway. Their administrative assistants do the hiring.
This leads to the most insidious aspect of the Congressional bureaucracy
problem: the administrative assistant. If there is a single source
of the conservatives' failure, look here. Forget about the great
conspiracy. Forget about pay-offs. Forget about their lack of time.
Just look at the AA.
The AA is the
top dog. He gets the $50,000, if anyone does. He gets the prestige.
He hires and sometimes fires. And like any person in a no-contract,
high-risk, high-pay job, he wants one thing above all: tenure. He
can get it only in one way: be absolutely certain that no one coming
in contact with the boss is more competent than he, the AA, is.
This reduces the general competence of the staffs an additional
notch. The AA is enormously defensive about his position. He sees
to it that the level of incompetence is kept high by adhering to
another unwritten rule:never hire anyone who hasn't had Hill experience.
This screens out the threats to your position. Your competition
is limited to the walking wounded: Hill rejects.
Hill rejects? Why not hire good people from other congressional
staffs? Simple: there is an unwritten rule, a sort of "gentlemen's
agreement," that one Congressman will never hire anyone away
from another Congressman's office. This keeps the bidding wars from
ever getting started. Only with the blessings of the first Congressman
can the staffer move to another office. Of course, there are violations
of this rule. Usually, a violation will be limited to lower-level
staffers. A secretary may take an offer to be a somewhat better-paid
researcher in another office. It is a promotion. But senior staffers
are supposed to be left alone. This keeps salaries down. In short,
Congress is a kind of cartel. Its hiring policies are very much
like those of some illegal monopoly or oligopoly. But Congress is
legal. This has been determined by law. The primary beneficiaries
of this system in restraint of trade are the least competent administrative
assistants who are not good enough to be recruited anyway, but who
now face less competition from other, more competent AAs (or potential
AAs) who might otherwise be recruited away from another office.
be a universal rule for any serious, dedicated Congressman: no one
making over $15,000 per year should be hired by the AA. Let the
AA hire the secretaries. Yet, if anything, the rule is inverted:
the Congressman is very often exceedingly interested in hiring the
secretary who makes $12,000 or less. Are you getting the picture?
the rest of the article
North [send him mail]
is the author of Mises
on Money. Visit http://www.garynorth.com.
He is also the author of a free 20-volume series, An
Economic Commentary on the Bible.
2011 Gary North
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