Government Megatrends

Michael Kurth Thursday, August 15, 2019 Comments Off on Government Megatrends
Government Megatrends

Megatrends are sustained changes that shape our future. Globalization, urbanization, the application of technology, climate change and development of new energy sources are often cited as megatrends. 

When it comes to government, I believe there are three megatrends that point to where we are headed regardless of what party is in office. They are the increasing power of the presidency, the increasing scope of federal involvement and the growth of bureaucracy at all levels of government.

Consider the power of the president. When our founding fathers crafted the constitution, they were concerned with preventing the concentration of political power in the hands of any individual or political faction. That is why they created three separate branches of government: the legislative branch to pass laws and taxes with the consent of the governed; the executive branch headed by the president whose mission was to faithfully carry out the laws passed by Congress; and the judicial branch, with the task of ensuring the laws comported with the Constitution and did not infringe on personal liberties.  

But over the last century, the executive branch has grown increasingly powerful vis-à-vis Congress. For example, the last time Congress declared war was in 1942. Korea, Vietnam, the Persian Gulf, Afghanistan, and Iraq were “Extended Military Engagements.” In the case of Vietnam, Congress passed the Gulf of Tonkin Resolution authorizing the president to take military action. But when Congress rescinded that resolution in 1971, President Nixon continued the war anyway. Congress then passed the War Powers Resolution Act, over-riding Nixon’s veto and limiting the president’s emergency power to wage war without Congressional approval to 60 days.  

War powers and foreign policy are not the only areas where the power of the president has expanded. President Obama famously said “We’re not just going to be waiting for legislation … I’ve got a pen and I’ve got a phone” — referring to his use of executive orders to bypass a Republican controlled Congress. But executive orders are intended to cover mundane actions such as personnel policies; not to alter laws or create new ones. 

Part of what’s driving this drive toward presidential power is the long-standing frustration of voters — left, right, and center — with the inability of Congress to deal with problems such as immigration reform before they becomes major crises. It’s been a decade since polls showed Congress with more than a 30 percent voter approval rating. Presently its approval rating is just 16 percent, compared to 70 percent who disapprove of the job Congress is doing. Regardless of which party is in office, I look for the president to continue to look for ways to bypass Congress. 

The second government megatrend is the increasing involvement of the federal government in state and local affairs. The Constitution is very clear in stating that the federal and state governments have separate areas of responsibility and the federal government’s area is limited in scope to raising an army, waging war, defending our borders, delivering the mail, coining money, regulating navigable waters, regulating interstate commerce and a few things like that. But everything else is the domain of the states.  

In order for the federal government to get involved in state and local affairs such as education, highways and infrastructure, healthcare and the myriad of other activities in which it is engaged today, it must be invited in by the states. The primary way this happens is the government in Washington offers federal aid to the states on the condition that they implement federal policies. For example, the federal government has no constitutional role in education. Yet its fingerprints are all over educational policy, including a federal Department of Education to administer federal funds.

If you think this federal funding is because the federal government is awash in tax revenue you are wrong. The federal government is deeply in debt (about $22 trillion dollars), about a third of which it borrows from foreign interests. Thus, the bottom line is that much of the money the federal government uses to buy its way into state and local affairs comes from the federal government’s ability to borrow, and not from its tax revenue. This is not likely to change in the future, because in a bi-partisan vote, Congress just raised the debt ceiling once again. 

The third megatrend in government is the rise of the bureaucratic state. As the scope of government regulation and control expands, agencies are created to administer these new rules and regulations and these agencies tend to take on a life of their own, expanding their size and budget by creating complex rules and regulations that are nearly impossible to navigate.

These agencies may begin life as well-intentioned solutions to an actual problem. But with little incentive for public oversight (who attends public meetings of local boards and commissions?), they are quickly “captured” by the industries they are set up to regulate. Employees of these agencies anticipate lucrative job offers from the industries they oversee if they shape policies that favor established industries and stifle competitors. As Nobel laureate George Stigler wrote: “… every industry or occupation that has enough political power to utilize the state will seek to control entry.” 

One measure of the size and power of the bureaucratic state is the amount of money corporations and special interests are willing to spend to influence the policies of these bureaucracies.  According to the campaign finance watchdog, the price tag of the 2016 election for corporations and labor unions was $6.5 billion. And this is a partial accounting. I don’t look for this to change because both parties are hungry for money to finance their campaigns.

We may see some policy changes as a result of the 2020 election (for example, who gets taxed and who gets the benefits), but the size and scope of government bureaucracy is unlikely to change. In other words, the days of “government of the people, by the people, for the people” is a thing of the past, just as much as mom and pop grocery stores and Sears and Roebuck. 


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