America's amateur government

Too many political appointees, not enough expertise or reward to competence

Welcome to Thursday. Today and tomorrow are the final days of the Slow Boring promotional period. It’s gone extremely well so far, but the nature of capitalism is that I must drive for relentless growth so I will continue to encourage you to subscribe if you’ve been enjoying these posts.

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Also wanted to address something that I saw pop up in the comments on Monday where we had someone being very disrespectful about someone’s choice of pronouns — I wasn’t happy about it, I hope that’s been made clear to the person in question, and I hope in the future we can all be kind here. People who persist in that kind of behavior are going to get banned.

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We’re about halfway between Election Day and Inauguration Day and we still don’t know who Biden will pick to fill several of his cabinet roles, including Transportation, Labor, Commerce, and Education along with a bunch of key quasi-cabinet jobs like EPA chief or SEC Chair. That’s fine, though, the United States has an unusually long transition period and senate confirmation is a trickier thing than the installation of a cabinet in a parliamentary system.

Where the United States really stands out, however, is that Biden is nowhere near filling out the full roster of political appointees who run the agencies that he’s picked chiefs for. He’s nowhere near doing that because even given America’s long transition phase, there’s simply no way you can get all that done. Which in turn just reflects the reality that having political appointees penetrate so deeply down into these agencies is a dysfunctional process.

America has a lot of political appointees

In Canada, the minister of finance is Chrystia Freeland, who was a first-rate economics journalist here in the US before she moved back home to Canada, won a seat in parliament, and rapidly rose to the top of the Liberal Party. Justin Trudeau also created a job called Minister of Middle Class Prosperity that’s done by Mona Fortier and also housed at the Treasury Department.

Freeland and Fortier by Sean Fraser as parliamentary secretary for the department, that’s a kind of junior political role that up-and-comers get.

After that there’s Paul Rochon, the deputy minister, who like all deputy ministers in Canada is a senior civil servant. Because the treasury is one of the most important ministries, Rochon has prior experience as deputy minister of international development and before that he was an associate deputy minister of health. Rochon is backed up at Treasury by two associate deputy ministers and then various assistant deputy ministers run the different departments.

Contrast that with the org chart Janet Yellen is going to be sitting top:

Here in America, the Deputy Secretary is a political appointee (the excellent Wally Adeyemo). Then you have the Undersecretary for Domestic Finance, the Undersecretary for International Affairs, and the Undersecretary for Terrorism and Financial Intelligence. Then beneath them there are eight senate-confirmed assistant secretaries of treasury plus two deputy undersecretaries who normally receive assistant secretary rank. Plus two assistant secretaries who don’t require senate approval.

At Treasury the saving grace of the situation is that even under Trump these jobs do tend to go to real economic policy professionals. Assistant Secretary for Tax Policy David Kautter, for example, is someone I’m sure I disagree with politically but he was the director of Kogod Tax Center at American University, a partner at a big accounting firm, and a tax counsel for Senator John Danforth. He knows a lot about taxes. Not every agency is so lucky.

Things get worse in the lesser agencies

Right now the head of the Federal Railroad Administration in the Department of Transportation is a freight railroad executive doing the revolving door thing. His predecessor under Obama, Sarah Feinberg, got the gig after serving as Anthony Foxx’s chief of staff when Foxx was Transportation Secretary. Foxx himself was a politician, not something with a particular background in transportation issues. And critically his chief of staff, Feinberg, was not somebody who was brought in for her transportation expertise.

Instead Feinberg had a career as basically a generic Democratic Party political operative — Senate Veterans’ Affairs Committee, communications director at the House Democratic Caucus, press secretary for the DCCC, national press secretary for Tom Daschle, then working for Rahm Emannuel in the White House. The current Assistant Secretary for Policy Development and Research at HUD, Seth Appleton, is a guy who worked as a staffer for an obscure House Republican (Blaine Luetkemeyer) and then got brought into HUD in a congressional relations job and then has moved up the ladder.

At the non-prestige departments, these Feinberg/Appleton career trajectories are very common (these just happen to be issue areas I’m interested in). Political operatives get brought into the executive branch in roles that are appropriate for a political operative to fill. But then they end up rotating into policymaking jobs.

The alternative is the revolving door scenario where the person doing the job is genuinely knowledgeable, but knowledgeable because they are coming directly in from industry (and likely headed back there). Progressives are now pushing hard for fewer revolving door appointments, which makes sense. But it’s a somewhat difficult structural problem.

The inevitable revolving door

In the Canadian system, the Minister and her parliamentary secretary are politicians — elected members of parliament — and the rest of the top jobs are done by senior civil servants.

In America, we sometimes appoint politicians to senior cabinet jobs. But there are constraints here, since doing so actually creates a vacancy in the legislature. The nature of the current congressional math is that Biden has strong reason to want to avoid appointing members of congress (and especially senators) to key jobs. And because there’s such a deep pool of political appointees in these agencies, the normal thing is that to get a job political job you should have had a lower-level one in the past. Michèle Flournoy is seen as a well-qualified Secretary of Defense because she previously served as an Undersecretary of Defense. Anthony Blinken is a well-qualified Secretary of State because he previously served as a Deputy Secretary of State.

But these are partisan political appointments, so they were out of office when Trump was president. Doing what? In their case, running a consulting firm where — in the most benign interpretation — they cashed-in on their experience in office.

Progressives are pushing to change some of the norms around this revolving door stuff, and that’s mostly for the good. But the literal revolving in and out of government management roles is built into the reliance on multiple levels of political appointees. You’re not going to serve as an Assistant Treasury Secretary and then go operate a taco truck for four to eight years, you want to go do something that capitalizes on your expertise. So the alternative to corporate work would be to go do non-profit work. But non-profit money doesn’t materialize by magic. And fundamentally if Flournoy and Blinken had been raising money from defense contractors at a think tank that wouldn’t make anybody happier. The solution is to have high-level administration of government departments be done by civil servants, and for a career in civil service to be a prestigious thing to do.

Devaluing the civil service

A subsidiary problem with the overuse of political appointees in senior roles is that it undermines the value of the professionalism present in the lower levels of the civil service. Most of the people working in the Treasury Department in Canada will never rise to the august levels of Deputy Minister Paul Rochon. By the same token, most of the people who graduated from West Point this year aren’t going to become four star generals.

But the fact that the top brass in the military started their careers with junior commissions and then worked all the way up helps bolster the prestige and professionalism of the entire officer corps.

Having a thick intermediate layer of political appointees drawn from the ranks of congressional staff, campaign operatives, and murky revolving door realms does the opposite in the civil service. Before Trump’s administration there was a strong informal tradition in the State Department of giving a lot of the political appointments to career foreign service officers, which had the opposite effect of raising the status of the whole foreign service.

Biden seems to be trying to bring that back by tapping Linda Thomas-Greenfield to be UN Ambassador. She is a career foreign service officer who serving at the top levels of the State Department until she got fired in a rolling Trump-era purge of senior FSOs from political jobs. UN Ambassador has almost always been a political job, so elevating a former FSO to that rank indicates an intention to try to Make The Foreign Service Great Again.

It’s a laudable idea, and ideally I’d like to see the same spirit brought to the “normal” domestic agencies. But realistically of course you can’t unilaterally establish a norm. And the Trump administration on its way out the door was trying to create a new Schedule F category federal employees to further erode the civil service.

We need to want good government

For years now all the smart people have said that the debate between “big government” and “small government” is less important than the question of the quality of the governance. To me personally, Francis Fukuyama’s 2011 book The Origins of Political Order was seminal here though I doubt the point is original to him. Tyler Cowen’s essay on “state capacity libertarianism” heads in the same direction from a different starting point.

Unfortunately it’s a little bit hard to know how to pull out of the spiral that we are in.

I think most observers agree that the Federal Reserve is one of America’s best functioning public sector institutions. And it has the hallmarks of what one would expect from such an institution — the pay scale is higher than for the rest of the civil service, there is only one layer of political appointees (the Board) with the rest of the management done by professional staff, and in the case fo the Fed there’s extra insulation from politics in that the Board members’ terms extend across presidential terms.

Elizabeth Warren studied institutional design carefully before she set up the Consumer Financial Protection Bureau and deliberately set it up to be on the Fed pay scale and with a director whose term extended across presidential terms. Republicans complained bitterly about that Fed pay structured, insisted that they would refuse to confirm any CFPB Director unless Obama agreed to change it (this was part of what precipitated Harry Reid ending filibusters for appointments), and eventually the conservative Supreme Court justices ruled that it was unconstitutional (for unitary executive reasons) to structure the director’s term that way. One of the Trump administration’s final acts is trying to create a new Schedule F of federal workers to push political appointees even deeper down into the bureaucracy.

I hope the smart conservatives and libertarians who are into governance quality and state capacity can convince their friends in GOP politics that this stuff is important. But it still looks to me like they are on a level where if you think that regulation is bad, then you should want regulatory agencies to be low-prestige, low-paid work with little status and if that means they do a bad job then it just proves you were right to begin with.