A long-time friend was bemoaning the complexities of compliance with the Davis-Bacon Act. Passed in 1931, the Davis-Bacon Act requires the payment of “prevailing wages” on public works projects. Thus for any federal contract over $2000 employers must pay prevailing wages and benefits. David-Bacon was originally passed to combat the importation of cheap African-American labor from the southern states into higher wage northern work locations. In recent times the law has permutated into a means of keeping contractors from using cheaper non-union wages.
This depression-era law has been in force for eighty years. Its original questionable purpose has long passed. Now the American taxpayer pays for this law though higher contracting costs for federal projects. Despite our current out of control federal deficit, Democrats do not want to repeal the law and offend its union supporters. So, Davis-Bacon is emblematic of how Federal laws and bureaucracies become entrenched and can continue well beyond their original mission to the point of being societally counter-productive.
Homeland Security
My point today is not about Davis-Bacon. It is about how bureaucracies perpetuate themselves when there is little or no use for their continued existence.
A thought experiment: The Department of Homeland Security was created after the 9/11 attacks to protect the United States against future terrorist attacks and to respond to natural disasters. What if the terrorist threat dissipates or disappears?
The always insightful and provocative Global Europe Anticipation Bulletin just issued its latest report. Based on the recent collapse of American supported regimes in Egypt and Tunisia, GEAB analysts predict that other American supported regimes will be overthrown and that American influence in the Middle East will wane. As I am writing this we are witnessing uprisings in Libya and Bahrain. While there are many negative consequences of these revolutions– higher oil prices, decline and potential collapse of the dollar– there may be an offsetting positive:
The ultimate vision of the world has, of course, been achieved under George W. Bush’s presidency, after 9/11, where support for the dictatorships in the region became unconditional in the name of the fight against Islamic terrorism. Tunisian and Egyptian events have shown “live” that the majority of Arabs were simply people wanting to live in a democracy and prosper, like everyone else, and not bearded fanatics dreaming of killing thousands of Westerners. In terms of world public opinion, the pictures of Tunisian streets and Tahrir Square in Cairo lastingly overlap images of the Twin Towers. GEAB No. 52 (subscription required)
Thus, while anti-American feeling may persist for quite a while after these revolutions, terrorism may abate as the “Great Infidel” is incrementally and organically removed from Arab soil.
No Homeland Security?
In a Washington where bureaucracies never die, they permutate and find new missions. George Ure in Urban Survival has long argued that 9/11 had the incidental benefit of delaying the financial crisis. Why? Many young entrants to the labor market became employed fighting in Iraq and Afghanistan or working for Homeland Security. With unemployment still stubbornly high can we afford to dismantle Homeland Security (or end the ongoing wars)? The answer is, probably not. As described by Charles Hugh Smith, bureaucracies are skilled in the art of self-preservation:
In Survival+, I describe the systemic drive within complex bureaucracies to maintain the status quo at all costs: full spectrum defense of the status quo and asymmetric stakes in the game.
In the first, the bureaucracy organizes all its resources to defend itself against encroachment by other fiefdoms (internecine conflict between protected fiefdoms) and outsiders; it does so with desperate vigor because the employees and managers have a keenly asymmetric stake in the game of allocating resources: if their fiefdom loses resources, their livelihoods and perks vanish.
Thus, outsiders rarely muster the political power needed to over-ride these highly motivated forces of bureaucratic over-reach. For examples, we need look no further than the sickcare system, in which an outrageously costly week stay in a hospital has jumped from $10,000 to $120,000, or the Pentagon, where every new weapons system costs twice as much as the weapons it replaces (the F-35 fighter aircraft cost $110 million each, and perhaps as much as $150 million, replacing the Super Hornet F-18 E/F that cost $57 million each), and cities, which responded to the boom of the 80s and 90s by embarking on hiring sprees and limitless “sweeteners” to public labor unions and employees. See Complexity: Bureaucratic (Death Spiral) and Self-Organizing (Sustainable)
We have an ongoing crisis in state and local finance. State and local law enforcement officers are being laid off. We have a large number of restive unemployed citizens whose government benefits are ending. Families needing food stamp assistance are on the rise. Prices of food and energy are soaring. The Federal Reserve is afraid of a new recession. What if civil unrest spreads? With weaker state and local law enforcement who better to re-task for the new mission of maintaining domestic tranquility than the Department of Homeland Security?
If Davis-Bacon, a legislative artifact, is still with us after eighty years, it does not take much imagination to conjure a scenario where a federal agency, Homeland Security, finds new and potentially disturbing missions and worlds to conquer. Do we want an intrusive, national law enforcement agency armed with Patriot Act sanctioned privacy incursions usurping local police? We are entering a brave and potentially scary new world.
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