Recently by Gary North: The Next Financial Crisis
I wrote this for Remnant Review in 1977. Multiply dollar figures by 4 to correct for price inflation.
From about 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.
This should 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.
Certain other 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.
To accomplish 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.
Then there 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.
About 60,000 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.
Then there 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 1976.
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 basis.
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 or not.
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.
The conservatives 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 office.
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.
Why 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.
There should 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?