Many years ago - within living memory for the middle-aged folks here, but not so for the younger readers, there was this guy, Lee Iacocca.
Not what you expected me to say, was it?
Don't worry, I promise this will make sense. (Eventually.)
When Lee Iacocca was fired from the Ford Motor Company, he was aggressively courted by Chrysler, which was at that time considered to be on its last legs, both financially and otherwise; it was a disaster.
Don't worry, I'm not going to talk about bailouts. (I know some of you were thinking of this.)
The real worm in the apple is something else.
There were two steps to Iacocca's revival of Chrysler. First, he got money - bailouts, if you will - from the government. (Really, he convinced the government to guarantee a series of huge loans on Chrysler's behalf; in fact THIS aspect, while wrong, worked, because Chrysler was eventually able to pay back the loans, and thus the government's actual expenditure of funds was nothing.)
The second was seemingly more innocuous, but in fact more dangerous by far, and it has gutted our country.
What Iacocca did was institute a promotion philosophy for management called "up or out."
What it meant was that management began undergoing periodic performance reviews... and if they went more than a certain number of reviews without proving themselves worthy of promotion, they were fired. Simple as that.
At Chrysler, it worked, at least in the short term. Chrysler's management at that time was heavily larded with do-nothings and incompetents, and when they failed to merit promotion, they were gone. Within a few years, Chrysler's management team was lean and hungry once again, and the company was saved.
Everyone thought Iacocca was a great guy.
The problem was - and this didn't become evident for years - that while an individual may be brilliant at their current job, that doesn't imply that they can do the job directly above them. They were forced to accept promotions, repeatedly, or lose their jobs - and eventually they rose to a job they simply couldn't do.
And then they left.
And Chrysler started hemorrhaging their best, brightest people, thanks to the Peter Principle.
...Which says that people are eventually promoted to their level of incompetence; they move up until they reach a job they can't do well enough to merit further promotion.
At Chrysler, that meant that a brilliant automotive engineer would get promoted to a team lead; then an engineering manager; then a department lead... And eventually, he or she would reach a point where they would get fired... and the real effect was that Chrysler had lost a brilliant automotive engineer.
But this wasn't immediately apparent. At first blush, it looked great; cutting away the deadwood, those lazy fat cats who used their corner offices only for purposes of sitting in, resulted in a management team that was highly motivated, dedicated, and had their nose to the grindstone.
...And as Chrysler's fortunes rose, the government sat up and took notice.
And borrowed Iacocca's idea.
First instituted in the military, the officer corps became a proving ground for this philosophy; officers failing to make the promotion list after a certain number of mandatory promotion boards were quietly let go.
...Regardless of their expertise in their current position.
This is complicated by the fact that the higher you rise in the ranks, the fewer jobs there are above you; competition became fierce indeed, and by the mid-Eighties, the Army (the area I know most about) was a lot better off for having shed the deadwood from the Seventies and Sixties; again, motivated, dedicated, hardworking men and women became the backbone.
And, just like at Chrysler, the ill effects didn't show up for years and years.
Based on Chrysler, and the turnaround in the Army, the government instituted a similar promotion philosophy in the vast mechanisms of the government bureaucracy, with one critical difference: it is virtually impossible to fire anyone from government service.
Which means that at every level, in every organization, people got promoted, repeatedly, until they were...
... too incompetent to rise higher.
And then they couldn't get fired. So they simply languished in jobs they were incompetent to perform.
Now, when you tie a person's financial well-being, their family's well-being, to their ability to get promoted rather than their ability to do their current job, you give them a massive, institutionalized reason to try their asses off to get promoted.
So.
If you can't do the job above you, and you've ALREADY done the jobs below you, and you can't do more than you already are at your current job, what do you do to demonstrate your merit to your superiors?
...You expand laterally.
Back in the day, when a government program was decided to be a miserable failure, it was scrapped.
...Has anyone noticed that this doesn't happen anymore?
You see, if you can't expand vertically, and you must expand laterally, you take over as many new programs as you can, bring them under your wing, and then fight tooth-and-nail, to the death, to defend them.
What we did, thanks to Lee Iacocca, was create an environment in the federal government in which the self-interest of each government employee rests not with doing their job competently, efficiently, or well, but with having as much responsibility in their current position as possible.
So when a Senator comes to, say, the Park Service, and says "I have a defense appropriations bill that's just crying out for earmarks; what do you need?" the Park Service responds with, "Well, I have this little project..." and a new bureaucracy is born. Some employee's fortunes rise slightly, and all is well.
...And the taxpayer foots the bill.
And here's the thing: that bill grows - automatically - every single year.
You see, costs go up, every year. So in order to provide NEXT year, what they did THIS year, the program requires slightly more money than it had the year before.
This is called baselining: the initial cost of the program is considered a baseline, from which costs for upcoming years are extrapolated, and that's the budget amount they ask for: the baseline, plus their idea of next year's costs. Then, when it IS next year, they take THAT year's budget - again - as a baseline, and add to it for the following year.
To demonstrate:
Let's say that the program the Park Service asked for was a program to fund volunteer work for kids, to have them pick up litter in the national parks. Admirable, right?
At least to a certain mindset.
But let's say the initial funding is $100 million.
That's our baseline; but costs go up by, say, 5% every year.
So the second year, the program will cost $105 million - our new baseline.
The third year, it will cost $110,250,000 - our new baseline.
The tenth year, it will cost $155,132,821.60 - our new baseline.
The twentieth year, it will cost $252,695,019.55 - better than two and a half times its original budget, "just to keep current" - our new baseline.
The thirtieth year, it will cost $411,613,559.55 - more than four times its original budget, and our new baseline.
Note that this assumes that the program does not grow in ANY OTHER WAY AT ALL.
...And it is in the vested interest of the Park Service employees in charge of it to make sure it's a success.
I know, you think I'm kidding.
I never kid™.
In 1940, total benefits paid out by the Social Security Administration were slightly over $35 million.
In 2009, the estimated payout will be just over $650 BILLION DOLLARS.
The Social Security program (including its lesser subsidiaries and inevitable, as discussed here, offshoots,) constitutes approximately 7% of the Gross Domestic Product of the United States, as of this year.
To put that in perspective, the Gross Domestic Product of the United States is roughly estimated by the International Money Fund at $14,264,600,000,000,000. Yeah, that's TRILLIONS.
Which makes Social Security just under a trillion dollars, all by itself.
It started out as a helpful benefits program, paying out only $35 MILLION in benefits, and in 70 years, has turned into...
...Well, exactly what I said above.
How many of these gargantuan programs do you really expect that the taxpayer can support, hmmmm?
President Obama is proposing to create a giant new bureaucracy, under the guise of health-care reform.
The most generous estimates place the cost at a trillion dollars.
So, let's play with that.
The first year, the costs for this program will be $1 trillion.
The tenth, $1,551,328,215,978.52.
The twentieth, $2,526,950,195,375.64.
The thirtieth, $4,116,135,595,381.58.
Note again, this is JUST with baselining, JUST with the inherent nature of government financing; this doesn't take into account the zealous efforts of promotion-seeking government employees to "grow the program," or the numbers of people who will flock to the program as it rapidly and inevitably replaces private insurance; this is what it will look like in 30 years JUST with cost-of-living increases, so to speak.
In 30 years, the proposed legislation will result in a bureaucracy as expensive as the entire federal budget from last year.
Once people get on the program, and start getting their "free" health-care, how many of them do you really think will be willing to vote for any politician who says anything whatsoever about reducing their benefits? Reducing costs, the only way they can? God forbid, eliminating the program?
If you guessed "almost none," you're right.
We as a nation are teetering on the edge of an abyss. If this reform bill passes, we will begin the fall; indeed, we may already have begun to fall without knowing it.
Thirty years, until "health care" has become a third of GDP. All of it taxes. Do you really think our economy will make it that far? I don't.
Our government is much closer to collapse than people seem willing to believe.
And it's all Lee Iacocca's fault.
Does anyone still think "health care reform" in its current incarnation is a GOOD idea?
