Firedoglake is pleased to welcome Donald F. Kettl and his timely book, The Next Government of the United States: Why Our Institutions Fail Us and How to Fix Them. Donald Kettle is the Robert A. Fox Leadership Professor at the University of Pennsylvania, where he teaches political science and is a nationally recognized expert on government administration. Please welcome Professor Kettl in our comment section.
Suppose you’re a new Administration inheriting the nation’s enormous problems on January 20. In the last eight years, those problems, from expanding and paying for health care to restructuring the economy to redesigning our energy system have become more serious, urgent and complex. The challenges seem virtually impossible, so how do you create a government equal to the daunting task?
Professor Kettl confronts this question in The Next Government of the United States, using anecdotes of his mother-in-law’s experiences with Medicare/Medicaid juxtaposed with government responses to Katrina, 9/11 and other crises. Kettl’s meticulously researched and engagingly written descriptions of these events are worth the read alone, but his object is not just to tell stories but to draw from them principles of good governance.
A central message is that what government is expected to do has become hugely complicated while its approaches have become extremely complex, virtually unmanageable. As Kettl traces Mildred’s experiences through Medicare and Medicaid in her final years, we find the paradox that most of her health care and expenses were covered by the government, yet she never encountered a single government employee; instead her ever changing needs were handled by a bewildering network of public and private institutions, for-profit and non-profit entities, numerous services and types of care professionals, none of whom were actually government employees.
The "Mildred Paradox," of being with and subject to a vast government-sponsored enterprise but never encountering a government employee combines with the "Mildred Corollary" — that there was never any single person or entity in charge of managing Mildred’s care. And yet, Kettl observes, her care was almost universally good. How did this happen?
Kettl contrasts that experience with government’s initial and follow-up responses to Hurricane Katrina, as well as anecdotes of response efforts after the Exxon Valdez spill, the Oklahoma City bombing, and 9/11. Failed responses are traced to government’s inability to grasp the complexity of the crisis, to realize that no single entity could solve the interrelated problems; a crisis is the hardest time to form the relationships that must exist between disparate response entities.
"Successes" occurred only when key individuals understood the crisis’inherent complexity and unpredictability. Leaders emerged who were committed, flexible and creative in adapting to changing circumstances and good at developing relationships with those in other institutions whose skills and resources were needed to solve the problem. Kettl calls these and related leadership qualities "rocket science." (Forget the "rockets" and instead think of how scientists confront complex problems.)
What we need, Kettl argues, is to develop and nurture a new class of "rocket scientists" — people who understand how complex and interrelated our problems are and who can form and leverage partnerships across the network of government (local/state/federal) and private (for- and non-profit) entities and professionals who all own a piece of the problem and part of the solution.
We can then choose from such accountability mechanisms as government regulations and standards, industry standards, market and/or tax incentives, and so on, to monitor results and promote transparency and accountability.
Is Kettl right? There’s no doubt our most difficult government problems are hugely complex, that some may require not legions of government employees but networks of government/private/profit/non-profit people and institutions working cooperatively. We obviously need smart, dedicated people — Kettl’s "rocket scientists" — who can adapt to and creatively deal with complexity, and who can leverage networks to make it all work. Most of all, we need people deeply committed to solving the problem. All of Kettl’s "successes" fit that pattern.
Kettl’s analysis, however, is non-partisan, outside an explicit ideological framework (though not outside historical context — his discussion of the "Progressive" eras is fascinating). While this might make his arguments acceptable no matter which party won the elections (the book was completed before), it runs the risk of underestimating the relevance of post-Bush conditions. Thus, while he notes Reagan’s phrase that "government is the problem," Kettl chooses not to emphasize the implications and the toll that governance philosophy took not only on trust in government but the foundations of government effectiveness and accountability. Both suffered, so was "Reaganism" a cause that needs correcting?
I also wonder why the concluding discussion on how to build government accountability does not focus on what appears to have been unprecedented levels of corruption, cronyism, ideological politicization, secrecy, misleading propaganda and deliberately appointing senior agency officials who defined their "mission" as undermining their agency’s mandates. Accountability is a serious problem, so why aren’t reversing these conditions and restoring the integrity of each agency’s mission, Inspectors General and the Justice Department top priorities? Kettl notes Congress’ demoralizing lack of oversight, so how do we react to Joe Lieberman, who remains Chair of the Committee overseeing DHS but has done little?
Kettl praises "rocket scientists," but he doesn’t focus on "whistleblowers." Yet in an era of lawlessness, the dedication and courage of whistleblowers suggest they may be true "rocket scientists." Should they be better protected, encouraged, rewarded? And what of those who were purged/demoted for ideological reasons during the Bush years? Were they not precisely the leaders Kettl says we should now nurture? Doesn’t accountability mean reaching back as well as forward?
With those questions to start the discussion, please welcome Professor Kettl to Book Salon.



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Donald, Welcome to the Lake.
Scarecrow, Thank you for Hosting today’s Book Salon.
It’s great to be with everyone this afternoon!
Welcome to FDL, Professor Kettl. Fascinating book. In reading about mother-in-law Mildred’s experiences I kept wondering if her experiece was typical or atypical. That would seem to make a huge difference in how hard it would be to reform government around the model you describe.
For example, if nursing homes are generally as good as she experienced, then there’s hope that the leveraged network model, with “rocket science” leaders, can become widespread. But if more homes are warehouses with indifferent care, corruption is widespread, and costs are out of control because of that, then something else is needed. And it’s not clear what. Your thoughts?
Hi Scarecrow, Hi Donald, thank you for coming to chat with us.
So what about accountability?
I see it as crucial, for our sakes, our souls, and for our future. Iran/Contra proves the case in point, those criminals should never have been allowed back in government. treason.
I fear her experience–the exceptionally good care she got–isn’t typical. But I am impressed with the high level of care many nursing home residents get, even though cost-cutting is always a priority.
The good thing about this leadership model is that it shows that outstanding leaders, even on a person-by-person basis, can make a big difference. It gives hope to others who serve the public that their work can also make a difference–that it’s worth taking chances.
I don’t think it’s the case that corruption is rampant. I worry most about people who serve the public and fear that hard work won’t be rewarded or appreciated. The key is often making it safe for people to do the right thing, and to do it the easy way.
Wecome, Donald, and thanks for spending part of your Sunday with us.
DW
Welcome to FDL Prof Kettl.
I have not had the opportunity to read your book but would like to offer this comment. In the introduction, Scarecrow writes:
Given how historically unaware the folks in charge have been for the past eight years, it seems as if having an historical awareness and context almost by definition places you into the “Reality Based” camp whether you want it or not.
Accountability is crucial, as you point out, Elliott. We have the BIG issues, like Iran/Contra. Bit problem here, and we have to investigate carefully to get to the bottom of issues like this.
But a larger problem is that it’s getting harder all the time to ensure accountability in many of the routine functions of government. Government is in charge, spends the money, but relies on contractors and grantees and a large collection of proxies to get the work done. The challenge is devising strategies to make sure that those who act on behalf of government are accountable.
That’s been increasingly true–but the financial bailout is making this all the more crucial.
Glad to be with you! This is as important a collection of issues as we’re likely to see.
So much of the problem is learning–understanding the problem, its context, what the possibilities are, how not to be trapped by the past. One of FEMA’s big problems in New Orleans, for example, was that its approach was heavily conditioned by lessons from September 11, which worked poorly in a flooded city.
History is critical. Learning the wrong lessons the wrong way can be paralyzing.
Don: if you note at the bottom of each comment is a Reply link. If you hit that, it lists the comment you’re responding to and brings up the response box.
I want to explore the atypical issue a little further. Suppose the empirical evidence shows more poor nursing homes than good ones. That suggest the potential for both fraud and abuse, which could mean a lot of corruption. Or we might examine the prescription of care, drugs, or medical devices. Are they correct? Appropriate/needed?
If not, this would suggest that the network model functions only when you’re lucky enough to find a “good” home, but the model is not easily replicated and may not, by itself, confront the accountability problem.
The anecdotes are suggestive, but not as comforting as better empirical studies. What’s out there, and do you see your book as encouraging more?
Professor,
On the issue of accountability. What do you think of the general proposition that a new government that ignores the criminal behavior of the previous government accepts a share of the blame and responsibility for the acts that were criminal.
Can the Obama administration refuse to investigate and charge the Bush administration members with torture, spying et al and still be seen as a virtuous and progressive reform?
The question of the moment, and perhaps of all the moments which shall follow …
Hi Scarecrow and welcome Mr Kettl.
Why don’t you like whistleblowers? Don’t they help make sure work places and products are safe when the owners and managers are ignoring problems?
My book is, at its core, positive. You’re right about getting more–and better–empirical studies about the overall effectiveness of programs.
I am convinced that there in fact are big problems of fraud and abuse, in part because it’s so hard to track the programs–and track the money.
But I’m also convinced that many of the problems of government performance occur because the system is so complex. As I argue in the book, the fundamental problem is that the government we have isn’t a very good match for the problems we’re trying to solve.
Look at the NASA space shuttle program. More than 90% of all the money spent in the program is spent through contractors. It’s very hard for NASA to oversee its contractors and ensure high performance.
Or look at the “high-risk” list put out by the Government Accountability Office. It’s a list of programs especially prone to waste and abuse. About 27 items, and almost all of them deal with the government’s programs in managing contracts and leveraging the complex systems policy makers have created.
Fraud is real. I’m convinced that the management problems of leveraging complex networks is a much, much bigger problem.
Hi. I didn’t mean to suggest Prof. Kettl doesn’t like whistleblowers; he just didn’t focus on them in the accountability discussion near the end. So it’s worth asking how he views them. Do they have the traits of “rocket scientists” or is this something else?
I love whistleblowers. Some of my best friends, in fact, are recovering whistleblowers. (Really. Two of them, in fact.)
My goal is to make life safer for those who need to blow the whistle. And, more important, to make the overall management of government far more effective. My big worry is the poor performance that creeps into too many programs because we don’t have good systems for managing them.
More on the whistleblowing: You’re right. I don’t focus on them at the end. The kinds of problems on which they need to blow the whistle are, typically, pretty important. Fortunately, I don’t think they’re typical of most government work.
It’s the balance between Abu Grahib (very bad) and managing the war in Iraq with one contractor for every soldier–and the fact that, in Abu Grahib, many of the people making the calls were private contractors overseeing soldiers. It’s getting the accountability and management straight that’s the key to making the real core of government programs work better.
Thank you. That makes a lot more sense.
I was in the USAF (Accounting and Finance) and worked a couple of years in a Defense Logistics Agency Contract Administration position.
One of the biggest difficulties is how to balance competing needs in the Government. If folks get rewarded for managing their budget and spending, they will spend every dollar whether needed or not. If they are rewarded for Saving and not spending then they won’t spend even when it is necessary. How does the government learn to reward appropriately so that the various balances are maintained?
Yes, that’s an interesting list, If I recall correctly, a large number of problem cases were at Department of Defense, which suggests the problem may be partly an excessive amount of dollars sloshing around for military budgets and too may Congresspeople making sure their districts get a piece of the action. The major accountability problem is thus with our elected officials and their priorities.
We need these rocket scientists managing the federal Bureaucracy as well as allocating funds. How do we get Rocket Scientists in government jobs?
How do we get them elected to Congress to allocate funds?
Heck getting Congress to read and do their own research rather than listen to the paid lobbyists buying them lunch would be a step up in the right direction.
Again the question is how do we do this?
Putting responsibility where it truly lies, Scarecrow.
Getting the incentives right for good performance is one of the tough things for government. If most of government’s work is being done by non-governmental officials, then it’s easy for government work to drift back to checking boxes and keeping the budget under control. Important. But not enough to ensure accountability.
Part of the answer is to make it safe for good performance. That’s the role of higher-level leaders.
Part of the answer is to focus on these accountability issues. That’s the role of Congress and the president.
Part of the answer is going to have to come through performance incentives. That’s very, very hard, and there’s a lot of opposition. But it’s a path we’re going to need to take.
Think I don’t agree with the central hypothesis of the book as described in the introduction, but I haven’t read it, so ignore this comment if it’s out-to-lunch.
I think when the government doesn’t work it’s because those in charge don’t want it to work and deliberately undermine its functioning. Complexity has nothing to do with it, nor are rocket scientists (who now have a dirty name on Wall St.) needed. Much more complicated multinational business can function well (not all do, of course), and do so because each worker comes in the morning and does the job. It’s organic. I observed it in my 25+ years on Wall St, where the firms functioned despite management because we all did our jobs.
Look at the rescue effort of the USAir plane crash on the Hudson. That was complex and needed to occur at lightning speed. It was self-organized and no one directed it. It was wildly successful.
W and the movement conservatives hate the government. So what happens when they get in charge of government? The obvious.
DOD does dominate GAO’s “high-risk list.” But the problem, in my view, isn’t having so much money sloshing around. It’s the difficulty that government has in identifying what it wants to accomplish, how best to do it, and how to assess how well it’s done. DOD, too often, doesn’t have enough capacity to design the systems it’s buying and it relies on contractors to do the job.
It’s not just DOD. The census is now in the middle of the same problem. It’s not the money sloshing around–it’s the problem of knowing enough to get leverage over the system.
When government does not want to do a job they do it badly. Katrina people are still waiting for the place to be fixed up again.
The Bank Bailout no waiting.
Our Government needs to get its priorities straight. Otherwise the Rocket Scientists will still ignore Katrina (assuming that they were picked by loyal Bushies) and if anything work faster to save the banks.
Maybe a voter poll on what we consider the most important issues could address this.
You put you finger on the core issue, ThingsComeUndone. The simple (too simple) answer is that we, as voters, need to do a better job of holding government officials responsible for getting results. The media need to do a far better job on this. And the President and Congress, in particular, need to make this job one or the job won’t get done.
It would take a MUCH longer conversation to get into the details of how. For example, Congress just isn’t good at this kind of oversight. (It better get good fast–the success of the multi-trillion bailout depends on it.)
But, the good news: there are lots and lots of these “rocket scientists” out there, below the radar, doing great work. The key is encouraging them: making it easier for them to do the right thing–which they’re trying to do.
Even with the “incentives programs” though, they are rife with and subject to abuse. I also worked as a DoD contractor for a number of years. Occasionally on Firm Fixed Price contracts but often on Cost Plus Award Fee contracts. It was amazing how many contractors manage to perform in the 95%-99% range. Especially when the contractors are also writing their own award criteria.
Katrina is a fascinating story, one I explore in-depth in the book. No one saw it as a low priority. The players, at all levels of government, struggled to figure out how to make things work. The biggest failure: their existing routines and sense of how to solve problems paralyzed them in responding to things that lay outside their experience. They didn’t learn fast enough.
Sound like the problems we’re drifting into with the financial bailout?
I swear I didn’t read your comment when I posted mine…Great Minds do think alike given the same data or lack of it I have not read the book either.
Is part of the answer supporting our current rocket scientists in the congress against the incompetence of the congressional leadership? Conyers wants to hold the government to accout but Palosi wont have it.
Do we need to develop more effective ways to pull the chains of those who hold power without behaving in accountable ways? If so how?
Any signs Obama people and Congress are getting on the stick?
The last part of your comment, dakine01, is often a big part of the problem. Government often tries to do hard things, doesn’t know enough about how to do it, contracts out the job (including design of the system and assessment of results)–and then we wonder why contractors play the game well and we don’t get the services we want.
We aren’t going to do better until government becomes a smarter buyer. One lesson of good private companies: know what you’re buying, who you’re buying it from, and whether what you’re buying is any good.
How did we get into the financial mess? Too many people were buying things they didn’t understand. Same problem that DOD, too often, gets into. The lesson here stretches well past government—and it has long legs.
Any sign Obama will encourage them?
I love Great Minds.
I researched this book by talking to the people actually doing the work. They’re pretty smart people and taught me a lot.
How did Bush disencourage them? We learn from our mistakes as well as our success.
There are more than a few here:)
The system is now so very complicated that it’s hard to use hierarchy and traditional accountability methods. Look at the bailout. No one really knows where all that money is going and what effect it’s having.
We need to rebuild accountability around a system of transparency that puts goals and results out there, in real time, in ways everyone can see. If we can’t use 20th century techniques to manage 21st century problems, we need to employ 21st century tools–based on information–to drive better performance.
Will Obama encourage the high performers? I think so. He’s appointed a chief performance officer, and he’s designing a new performance management system.
The trick will be getting this in place without having the bailout tsunami swamp everything.
The Bush administration actually made some progress, especially with a performance management system in the Office of Management and Budget. FEMA is actually better than it was during Katrina.
But there’s a long way to go . . . .
Don, Dakine01,
Is that not the problem? In most cases the government does NOT have the expertise to specify, and design the equipment / systems it needs.
How do we gain the expertise in the government in the first place? It would save a lot of money, put that in salaries.
In the debate over health care reform, a major issue is the role of insurance companies. The Medicare/Medicaid model is one approach; SCHIP is another, exclusive reliance on private insurance is another, and we have an ideological split, as we just saw on the SCHIP vote. But I would think the choice either simplifies the task of your leveraged networking or complicates it. How do you see your models playing out in that debate?
Why were they paralyzed? What was their sense of solving problems? Did they not communicate with each other and work together?
Was their a grand plan organizing the players? Did they stick to much to the plan and fail to improvise? Did they fail to discard the plan when it became clear that it wasn’t working?
I thought Bush as a Harvard MBA and the people he brought with him into government were taught this very kind of thing?
We’ve gone through a long period in which the people who work for government have been viewed as a dead weight on the budget, a regrettable carrying cost for getting work done.
How many leaders of private companies treat their employees that way? How well would private companies work if they did so?
There are lots of good ideas for getting expertise back in government. There are lots of young people who are eager for public service careers. New management approaches that share leadership responsibility can go a long way.
But it has to come from the top, too. The President and Congress simply have to make performance a priority. We’ve seen from Katrina what happens when they don’t.
One core point about Medicare, Medicaid, and SCHIP: The government is funding the services, but it isn’t delivering them. My favorite statistic about the federal government: the number of federal employees managing Medicare and Medicaid, which account for 20% of the budget, is just 4500, or 0.5% of the number of federal employees. Government’s central problem, increasingly, is getting leverage over systems they don’t directly control. Medicare, Medicaid, and SCHIP share this issue.
Actually, many of the folks I worked with as contractors had been in government at some point. Some as retired military officers, some as retired Civil Service and many who worked for a few years in government service and moved on because they could make more money as a contractor.
Part of the deal that used to be was that Civil Servants took less pay “because of the benefits.” But since the Reagan years and on down, the benefits aren’t all that great anymore.
Instead, folks get their knowledge from the government, then go market themselves to the favored contractor for the agency where they were formerly employed (and most agencies and divisions DO have favored contractors).
Han Fei Tzu wrote about government before Christ and how it should act. He held that those who encourage government to act on a new idea must present the costs, benefits, etc and be punished if costs get to high.
Bush holds nobody accountable is that his personal belief or is that something he learned in the Harvard MBA program.
“No one knows really knows where all that money iis going ..,”
I don’t mean to be dense, but it appears to me that that is precisely the idea.
I don’t, for a moment think ‘complexity’ is the issue, I think it is the logical extension of neoliberal sensibilities that ONLY the ELITE are to know AND benefit.
I agree with Prof. David Harvey that it is a deliberate ‘coup’.
And that is entirely consistent with my research over the past forty odd years.
Q: What’s worse than a public monopoly?
A: A private monopsony, i.e. a single provider of services to the government under a no-bid contract.
The economy structure of the government (monopoly) is set up to be inefficient vs. private industries where some competition exists.
Nonetheless, government often functions reasonably well, unless, as in W, it hires managers for political loyalty rather than knowledge of the job. Or responds to desires of campaign contributors rather than voters. (On the theory that if you have enough money for campaigns you can get elected regardless of voters needs and wants, I suppose.)
The Katrina problem is fascinating (and I spend a lot of time in the book peeling back the covers). The tragedy: everyone was trying their hardest to attack and solve the problem, but they didn’t do very well at it.
In part, that’s because it was a huge problem. Anyone who visited the Gulf after the storm struck came back overwhelmed by the scale.
But the mayor was stuck in the Hyatt for 48 hours without a phone. The governor asked the feds for help but couldn’t communicate effectively about what they needed. FEMA struggled for days to leverage federal resources.
In the book, I argue that the core problem is that there isn’t any problem that matters that any one organization can control. All of these organizations tried to control the problems they faced, and they stumbled badly. Things didn’t get better until new leaders came in, who were effective in leveraging resources (from boats to buses) across organizational boundaries.
There is a huge revolving door problem, in which government trains the people who then leave government, for more money, and end up being responsible for government policy.
We aren’t going to do away with contractors. And we shouldn’t. (Caesar used them, too.) But government needs to be MUCH better at managing its partners to make sure it’s the public interest they serve.
Two problems that the Bush people struggled with.
They often made decisions without working through the how-to consequences (think Iraq, Katrina, and the meltdown).
They also made decisions based on a sense of what they thought was right and wrong, and hoped that the results somehow would emerge from the force of their ideas. Too often they didn’t.
I give them credit for their work in focusing on performance and advancing the management systems to support it. But there was, in key cases, a disconnect between the top decisions and the efforts to make them work.
Yeah, when I first started as a contractor, it made sense that contractors were available to fill in around the edges and supplement the basic government knowledge but a t all times knowing that the government reps knew what they were doing and how to manage things.
Now, the government person “managing” things is often very junior in knowledge and experience and is far more easily led by the contractor.
There surely are theorists who argue that there is a deliberate conspiracy to drive government into an unaccountable system, where some individuals can get rich.
Put me into the complexity camp. I almost wish I believed in the conspiracy theory–we could drive out the conspirators and solve the problem. But the problems recur in Democratic and Republican administrations, even when well-intentioned people are trying their best. There’s something more systemic going on here, based in the complexity of how we’re trying to do government’s work.
Evidence? Look at how the bailout is being managed.
If the contractors know more than the government officials who are in charge of managing them, the odds are stacked against the government.
People could argue things are still not better.
I am hoping the Chief Performance Officer can actually do something, have “teeth” to improve performance.
I’ve seen contracts of over $120 million, budgeted with $10-20 million set aside to “write-off” disputes that will occur because of the poor government requirements (in the past 15 years).
I think you’re right. For lots of very complex jobs, government doesn’t have many alternatives in deciding who to turn to. We have just one consortium for space shuttles, a tough choice for military tankers (Boeing, or a European consortium), one manufacturer of submarines.
We have expanded the contracting out of government on the grounds that the market would prove more efficient. But market efficiency assumes large numbers of buyers and sellers to discipline the market. If there’s just one seller (say, one supplier of space shuttles), the government loses that market discipline. If it also contracts out its expertise to the contractor, the problems compound.
There’s been some progress in New Orleans. But they have a long, long, long way to go. The Lower Ninth is still in very sad shape.
Don’t Forget to Digg pups
That, as they say, is not a good plan. We simply can’t afford to let that kind of money slip away.
The only alternative is for government to be smart enough to manage what it’s spending–and to have enough transparency for everyone to keep track of the results.
Okay, I’ll take the bait on “look how the bailout is being managed.”
What we see:
Billions given way
No transparency (it’s not true no one knows where the dollars went; Treasury people do know; they’re refusing to disclose to Congress/public).
No coherent theory of what they’re doing (or shifting theories)
No coherent set of conditions for receiving money
No accountability against the non-conditions.
One could argue this is not a complex problem so much as a serious of bad government traits: incompetence, secrecy, deliberate evasion of accountability, etc. So the top of our list of solutions would be: fire them.
Pretty good list.
But on “fire them”: we’ve done that. Bush is packing up and on the way out.
I think it is a really complex problem–we’re enmeshed in problems we’ve never seen before, and no one (to be frank) really knows how to solve them. One thing is for sure: we can’t solve the problem simply by flooding the markets with money. If we’re not exactly sure where we’re going, it’s better to take our best shot–but then pay very careful attention to how we’re doing it and to track, in real time, what results we’re getting. So far, we haven’t paid much attention to either the how or the what.
How can we change that even with Rocket scientists if the government is structured to be less efficient it won’t work.
Although getting rid of incompetent but loyal Bushies and No bid contracts will help allot.
How should the structure be changed. The French, Germans and Scandinavian countries do a better job why?
First, there are lots and lots of these rocket scientists out there now, working hard and getting good results. We don’t see them often because they’re below the radar, but they are out there. I tell lots of stories about them in the book.
Some of this requires a fix from the top down: a president and Congress who pay more attention to results. Barney Frank is doing this on the bailout. But we need much more attention, from our important institutions, focusing on this.
We need better performance systems that track what we’re doing, on line and in real time. And we need incentive systems that reward good performers.
From the bottom up, we need leaders who help build other leaders. They’re out there. We just need to make it work, more easily and more predictably, across the government.
Our separation-of-powers system divides power, compared with parliamentary systems, and that undoubtedly makes performance harder. It limits the concentration of power, but it makes leadership for results harder.
But when I talk to my friends in other countries–the UK, Scandinavia, the Netherlands–they tell me that they are dealing with many of these same issues. Many of these things are universal.
I came late.
I have no idea what this means. When did the Bush Administration ever prioritize performance? Performance would be related to results and those I know of were uniformly bad. I would say that Bush and company steadfastedly refused to deal with complex problems as if they were complex. All they ever had were simpleminded black and white formulae based on ideology not facts and the festering results are all around us.
What do you know about this person and what are his influences in designing a new performance system?
If he is a Chicago School of Economics person then nothing is changed. If he looks to Europe it would change for the better but the GOP will fight it.
Can Obama get these changes implemented without the GOP?
Yeah Magic thinking based on their own belief that did not take into account reality, Bush has been wrong about and failed at everything.
It hasn’t gotten much attention, but there is a group of high-level Bush administration officials in the Office of Management and Budget who have been working very hard–and very effectively–to devise a system to measure the performance of all government programs. There are some problems with it, but it’s an impressive effort and it’s had real impact.
These are a lot of the same people who have run a pretty classy transition effort.
Heaven knows, there have been huge problems that the Bush administration simply did not attack or solve well: Iraq, Katrina, the meltdown, for starters. But this performance effort is something to pay special attention to.
I think there is an unwillingness to pin blame on the financial elites who have so obviously failed. Instead, we put their solutions at the top of the list of things to try. And we fail again.
I think ALL of the Political Cla$$ is complicit, D and R alike.
Those dolling out the monies have had ample opportunity to divulge where the monies went, provided them by Congress, I might add, but declined to answer.
Otherwise you must argue that they don’t know where the monies went, that they haven’t a clue.
Which cannot suggest anything but incompetence.
Therefore, either we are dealing with intent or incompetence.
Neither of which are reassurring …
‘Too big to fail’ is a rhetoric which suggests a disconnected haughtiness OR a failure to understand that saving the financial ’system’ while consigning the people the hands of unkind ‘fate’ is hardly the stuff of aconscientious appreciation of what ‘democracy’ means.
The failure of the Ruling Classes to properly manage the economy, while deliberately gutting it, to the short-terem benefit of the few, did not happen overnight.
We are only witnessing the cumulative effects at this point … the more dire consequences are not yet upon us.
The chief performance officer is Nancy Killefer, who has government experience and has worked at McKinsey. She gets very high marks from everyone I’ve talked with. She has a tall order, but she’s first-rate.
We all love private market competition–as long as we win. Losers usually turn to the government for help.
In the case of the meltdown, the scale of the crisis is so huge that EVERYONE is now turning to government. This is going to fundamentally redefine government, its role, and how it relates to all of us.
Background on Chief Performance Officer — “she”
http://www.latimes.com/news/na…..4953.story
There’s a long list of suspects in this meltdown. I’ve never been much of a conspiracy theorist myself. After a career studying bureaucracy, I’ve concluded that conspiracies require more organization than most organizations can pull off.
This is really, really complex. That’s a lot scarier. If there was a simple explanation, there would be a simple fix. If it’s very complex, it’s going to pose a much bigger challenge to our government.
I think it’s the complexity, more than the conspiracy, that’s at the bottom of the issue.
Here’s some analysis about how she’s approaching the job as chief performance officer: http://governmentexecutive.com…..todaysnews
In Investing I run from politically dependent and connected companies the freemarket system of rewarding the best companies is subverted by bribes.
You can’t win by picking the best company if the government is making political choices as to who gets a contract.
Since I am not connected I lack the data to make a good choice.
I wanted to say I think we need a perspective such as yours on government so don’t be alarmed if I disagree with you a lot.
The idea that we don’t know how to solve the financial problems we are facing is untrue. I and others here write a lot on these issues. I would argue that this isn’t rocket science. The problems confronting us are fairly simple to understand. Yes, they have many parts, and the administrative side of the solutions would certainly take some good sized bureaucracies to enact and monitor, but the relationships among the mortgage crisis, crap assets, bank insolvency, and the credit crunch is not terribly hard to figure out nor is what is needed to address each and all of these. Most of the complexity comes from setting up and administering the paperwork associated with millions of different inputs. Luckily we have computers for this so even that aspect is manageable if, and that is a big if, we go with a reasonable plan.
The problem is that the Bush-Paulson-Bernanke plan was an idiotic giveaway and what Obama-Summers have so far proposed is an extension of this. And for the same reasons the first plan didn’t work the Obama plan won’t either. It doesn’t address how we got here, what to do now, and what is needed for the future.
What if your loved one’s life was at stake, and you heard: “It’s very complex…there’s a team of people who’ve been working very hard on this issue…” And your child or spouse was lying there, dying.
What would you do then? Where do we grab and what do we twist and for how long? Give us a clue here!
Because people ARE dying. We have no universal health care. Banks get billions, we get foreclosed and sick.
In my book, I look at how some of these decisions get made. The bigger problem: the government tries to buy something new that’s on the cutting edge. Say, a new army fighting vehicle of the future. What should it look like? The Army knows, in general, what it wants the vehicle to do. But it doesn’t know how to engineer it. So it relies on the contractor to design and build it, which means that the big decisions about what it does and how much it costs drift to the contractor–and the Army doesn’t have the expertise to oversee the project or control the costs.
We tend to get into much bigger problems this way than through having the government just make political choices about who gets a contract. And this is much, much, much harder to control. And it costs us much, much, much more.
You didn’t have to be a conspiracy theorist to see the financial tsunami forming. All of the masters of the universe thought they would be able to get a seat when the music stopped.
Interesting article on the chief performance officer. If she succeeds, Congress will hate her, not to mention DoD and DHS.
To tell you the truth, I gave up on the OMB a long time ago and now only work off of CBO numbers. Again this is the same Administration that gutted whole departments and agencies, OSHA, EPA, Labor, Justice, GSA, FDA, Interior, the list goes on and on. What does it mean to have enhanced performance measures when this has been the result? This sounds like a game of who’s kidding who?
A big underlying problem of the bailout is that good assets are entangled with lots of bad ones (especially mortgages), and that a lot of the deals are interconnected. We know the core problem–too many people took out loans they couldn’t afford. But then good loans got packaged right next to sour ones. When the bad ones went down, they took everything else with them, and no one trusts anyone to pay back loans. We know the problem. It’s very, very hard figuring out which solution will work–and how to manage it so we don’t flush hundreds of billions of dollars down the train sorting out which one works best.
My book starts with just this problem–a loved one (my 90-year-old mother-in-law) who was at the bottom of one of government’s most complex systems–Medicare and Medicaid. The good news is that the system worked for her. So I start trying to chart solutions by starting with what worked, and how, for a loved one. Good question. Been there.
Thanks for the link Scarecrow.
But Holy Shit! Bush is worse than Hoover on GDP. And here I was waiting till Bush’s last day to compare the DOW loss with Hoover’s when I should have been watching this!
Lets see lost 2 wars, Katrina, Bank Bailout, No Child Left Behind, Not a single good law or program passed during his administration. Dow at Tech bubble/70’s oil Crisis levels likely to go lower but we hope not to Great Depression levels (although with the Dollar devaluing?).
Things Are Worse than I thought!
http://www.latimes.com/news/na…..4953.story
I don’t think it requires a coherent ‘conspiracy’, simply a ’sufficient’ alignhment of ‘interests’…
The financial tsunami was building for a long time. But each player thought he/she could escape the nasty side effects. The interconnectedness of the whole thing is what took everyone down. Even some of the good guys.
If you look at the book, you will see I am no apologist for Bush. But I do give them good marks for what they’ve tried to do in OMB. Though, like you, I rely on CBO numbers when I’m keeping score on anything.
As I like to point out we were talking about the housing bubble here back in late 2005 and that was long before I moved more of my focus into economics. As eCahn has said, it was the most foreseeable crisis we have ever had. And just as the housing bubble and its bursting were predictable so have the knock on effects which again many of us here including you have called before they happened.
That’s why Bush’s farewell interviews and speeches are so sad. He’s trying to figure some way to frame his administration so that, historians, at least, might see some rays of sunshine decades from now.
The government needs its own experts with real world experience. Lots of old engineers would like a cushy government job just so they can get off the shop foor, field, or away from the young guys in the office who want their jobs.
We should hire them. Nothing is tougher than getting a contract past a government inspector who is pissed he didn’t make partner at his old firm.
Obviously these employees will need to be watched extra careful for bribes and or personal connections to the companies.
On conspiracies: I hear ya. But I really worry most about the fact we build ever-more-complex systems that we can’t control. That’s actually a scarier prospect. We can, at least in theory, uproot conspiracies. If our problems are the product of the systems we’re creating, we need to think much more carefully.
I’m not in any way trying to rewrite the rules of politics. But I’m convinced there are lots of problems out there that come from good people trying hard to good things but producing New Orleans-like debacles. That’s a case where, in fact, the problems just swamped the system’s ability to respond–until some really smart leaders came in during the second wave and started to make things work. I detail that in the book. It’s an amazing…and reassuring…story.
Sad I like it in one word it says everything you need to know about Bush.
On the housing crisis: foreseeable, perhaps. But I don’t think anyone thought it would get this big, this deep, or this broad. Even the experts don’t quite know where the bottom is yet.
Just a couple of weeks ago, no one was talking about having to put so much government cash into Citi that the feds would end up as majority shareholders.
We need good, strong oversight of government employees. But here’s a case where we need to run government like the private sector. NO private company would dream of giving away all the decisions about products and costs to one of its contractors.
2 diggs come on pups!
We must, first, understand that we, not some ‘unseen hand’ are creating these ‘complexities’, and that, therefore, we can and must start the process of making them more manable AND more equitable … tand the ‘economic system’ is a daqmned fine place to start.
I call these ‘complexities’ ‘games’ and would suggest that we need to consider the nature of ‘games’ which lead us to kill other human beings, in the process of ‘playing’ them, as well as to separate the destructive mythologies which surround them, from the realities of life.
I think we would agree, whatever we term these ‘things’, that a sustainable, humane future requires that we come to ‘grips’ with ‘them’.
DW
The “success” of the second Katrina effort you describe covers the military guys who followed Brown and brought some order to the rescue efforts. That had clear command/control for their own resources, and sufficient personal and political stature via Bush’ appointment to command others. It’s a “rocket science” example you describe well.
But when we look at the total effort — where is NO now? — we still see a failed government effort, arguably allowed to fail by a lack of emphasis from the White House (and Congress). The “conspiracy” theories then have fertile ground: was it deliberate? racist? ideological? It seems to me that unless we confront these issues, it’s not very satisfying to say, “it’s a really complex problem with many entities involved” even though it is.
Thanks for the reminder, Things …
dugg!!!
You might read Krugman’s Depression Economics.
And it doesn’t follow that a simple explanation means a simple fix.
We created this complexity. We have to manage them or they will dominate us. The same is true of the economy, which one way or another will get redefined/recrafted as we work through this bailout. We’ve gotta grapple with these issues if we care about the future of American democracy.
As we come to the end of this Book Salon,
Don, Thank you for stopping by the Lake and spending the afternoon discussing your book with us.
Scarecrow, Thank you very much for Hosting this Book Salon today.
Everyone, if you haven’t bought this book yet, there is a link above.
Thanks all.
It’s very hard figuring out the solution when they are looking for it. Most of the political discourse on the economy and the meltdown talks around or past the problem. The Fed has already flushed a couple trillion down the drain compared to Teaasury’s few hundred billion both to very little effect. Again the outlines of how to approach this problem are not that hard. First, you have to know what the scope of the problem is and that means banks have to make a clean and public accounting of their assets according to rules of evaluation set down by the government not them. The government as the one putting up the money that is keeping them afloat has enormous power to do this. And no you don’t need to disentangle all the pieces of the CDOs. A cramdown or even a set of cramdowns by vintage and initial (not subsequent) rating can be used to evaluate not just individual but whole tranches of CDOs. It’s simple addition, just a lot of it. Once we know the size of the problem, we can decide which banks to recapitalize and how best to do it. Again this is not hard. What is hard to the point of impossibility is to try to recapitalize banks without knowing how insolvent they are or expecting in such a climate that they will at some point re-initiate normal lending.
I’d point out that the Chinese government is run by engineers.
Oh I’d say the entire world and its capacity to sustain human life is on the ‘block’.
But Democracy matters very much, to me.
I think it ’simply’ should be ‘participatory’ which, really is a large part of the problem, because it is not.
;~D
Cripes and our government is run by polling and advertising/lobbyists we must avoid any conflict with China, long term we will lose.
That and get the polling and advertising/lobbyists out of government.
Any chance Obama has plans to do that only a total ban will work.
Thank you, Donald for joining us, and, please, come back again.
It has been a pleasure meeting you and sharing thoughts with you.
Don — thanks much for joining us today and responding to questions. Good discussion of an important book.
Folks who haven’t bought the book, it’s here.
Where’s New Orleans now? Mired in dense political battles over where to go. Take a Democratic mayor and a Republican president, an enormous budget for rebuilding the city and a president with neither the inclination nor the resources to spend a lot. Add tremendous local battles on what the city ought to look like, how much cash to invest where first, how to make sure that a storm in the next few months doesn’t recreate the tragedy. The state had a Democratic governor but now has a Republican one. Add to that New Orleans’ long-term disfunctional government, not managed well and subject to some corruption, and a disorganized levee system with many points of vulnerability. And a city that, no matter what, isn’t at a place where anyone would consciously put it today, because any time it floods 80% ends up under water.
Neither Bush nor Congress wants to step into that thicket. The locals haven’t decided what they want to do. And no matter what they do, they still have a city where much of the land is below sea level and where the levee system is a non-system, full of vulnerabilities.
There are lots of racial issues here. From Washington, there was a “good luck–hope they can sort it out” attitude. Unfortunately, there isn’t any single issue to solve. Even if Bush had decided to pour in hundreds of billions, it’s not clear the NO city government could have decided how to spend it well. And even if the city spent it well, there are other parishes up and down the river where problems percolate.
That’s what I mean by the “many entities.” Is there race involved? You betcha. But there’s a lot of additional stuff, too.
We need much better leadership, at all levels, to work our way through such puzzles. Even if we magically solved the race issue, the other nasty puzzles would remain.
Thanks Donald very good Talk.
Thanks so much, to one and all, for a great discussion this afternoon. We’re in the midst of a fundamental transformation of government–to the next government of the United States, as I argue in the book–and it’s going to take all of us to get there.
Many thanks for a great discussion!
But this is precisely my point, we have been talking about all this for a long time now. You keep saying that no one foresaw this or could foresee this. But we did. Here. This reminds me of Greenspan’s testimony before Congress. He repeated the no one could have predicted defense. When Congress members pointed out where people had, he replied Well he couldn’t pay attention to what everyone was saying.
You are confusing “expert” opinion with all opinion. I should point out that it was this same expert opinion that says he never saw the housing bubble or the recession or the falling apart of the house of cards of the financial system. We have been discussing the insolvency of the banking system for an age.
Rebuild above sea level thanks to global warming thats the only sane choice.
But politically its hard.
Who’s going to tell the people in the 80% of the city below sea level they can’t go home? And how could New Orleans exist economically with only 20% of its pre-storm area?
Some of this is 20-20 hindsight, although it was pretty clear to many observers that bad things were brewing. But almost no one expected the wheels to come off, in the US and around the world.
The Netherlands does a good job of maintaining a country, almost all of which is below sea level.
And some of it is 20-20 foresight. There are certain aspects that we couldn’t assess until we saw what Paulson and Bernanke did, but most of it was forseeable (as in before it) and we did it here. And if we could do it, anyone could.
True we should ask their help.
But wouldn’t it be cheaper to move?
Relocate to higher ground as close to New Orleans as you can
Great discussion, thanks to all.