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Demosclerosis:: The Silent Killer of American Government Hardcover – April 12, 1994
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From Library Journal
According to Rauch, contributing editor of the National Journal , the main problem of our national government is not gridlock--the inability to act. Indeed, many new laws are passed each year. Instead, government lacks the flexibility to act in such a way as to deal effectively with the nation's problems. Rauch calls this condition demosclerosis and claims that it has been intensified in recent decades by the increasing number of interest groups with vested interests in retaining existing governmental programs. Such groups are amenable at most only to marginal programmatic change. Rauch makes a strong case that our governmental arteries are clogged and that interest groups have played a major role in creating this condition. He also performs the valuable service of pointing out how widespread interest group membership is among the public. Although there is a tendency for many people to view interest groups as organizations that other people belong to, Rauch recognizes that "Groups 'R' Us." Highly recommended for academic and public libraries.
- Thomas H. Ferrell, Univ. of Southwestern Louisiana, Lafayette
Copyright 1994 Reed Business Information, Inc.
Our national inability to solve our worst problems--lousy schools, rampant hooliganism, the deficit, etc.--is usually ascribed to a presumably partisan phenomenon called gridlock. But forget gridlock, this lucid, persuasive public policy analysis says. The reason the government can't get anything done is that there are too many citizen-whiner organizations--politely if not respectfully known as lobbies--pressing to have their benefits locked into law. Once they succeed, secondary groups of whiners (the American Association of Retired Persons is a classic example) arise to see to it that their programs are never even trimmed, let alone eliminated; if anything, program budgets only expand. These immortal boondoggles (including such stellar pork barrels as the sugar, tobacco, and dairy subsidies) tie up increasingly more revenue, preventing through financial privation any new actions to deal with emergent problems as well as any revision of ineffective ways of dealing with old ones. And so, the government of the richest nation in history becomes too poor to deal with its own breakdown; democracy is frozen--demosclerotic. Rauch proposes more forceful presidential leadership, more citizen forbearance, and--stiff medicine, this--more taxes and more budget cuts as necessary means to curb the ill effects of a disease he thinks can never be eradicated but might be contained so that it becomes chronic but not fatal. Ray Olson
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People get arteriosclerosis -- hardening or shrinking of the arteries -- making the heart less efficient. The U.S. government has demosclerosis, which is the progressive shrinking of the government's problem-solving ability. Americans surely have less confidence today in their government's ability to address problems than we did in the mid-1990s.
Gridlock is not the problem, insists Jonathan Rauch. The problem is that government seems to be less and less efficient at alleviating more ills than it causes. Even as government tries to do more, people are less satisfied with the results. The reason for this hardening of the governmental arteries is the proliferation of interest groups, each seeking preferential treatment in the form of subsidies, tax breaks or anti-competitive rules.
As the benefits-hunting industry grows, "the steady accumulation of subsidies and benefits, each defended in perpetuity by a professional interest group, calcifies government. Government loses its capacity to experiment and so becomes more and more prone to failure."
Rauch's diagnosis is nonpartisan -- both parties get the blame for demosclerosis -- as do liberals and conservatives. The cause, he contends, is inherent in democracy and in the the "public's tendency to form ever more groups clamoring for ever more goodies and perks and then defending them to the death." The governmental calcification only gets worse, Rauch presciently predicted, unless a serious effort is made to treat it.
Interest groups succeed because it's easier to organize a small, narrow group in support of its common interest -- such as a tax break -- than it is to organize 305 million Americans to resist that tax break that comes at their expense. Interest groups also get a bigger payoff for their members by redistributing income, not by creating it. Consequently, the more the interest groups succeed, the less efficient the economy becomes. Productive investment makes society wealthier, while investment in transfer-seeking does not.
Since the book was written, the lobbying sector in D.C. has continued its rapid expansion and growth in influence. An up-to-date description of that sector is found in REPUBLIC, LOST: How Money Corrupts Congress - and a Plan to Stop It by Lawrence Lessig (Twelve, 2011)
"All groups claim to be serving some larger good," writes Rauch. "And all groups, without exception, are lobbying for more of whatever it is that their members want, generally at some expense to nonmembers." Whether their motives are idealistic or cynical, lobbyists all play the same game.
Transfer-seekers are parasitic in two ways, Rauch explains. There are not only unproductive themselves, but they force other people to be unproductive as they defend themselves from the transfer-seekers. If targets fail to defend themselves, such as by hiring their own lobbyists, they may lose economically. "The costs of economic distortion and rigidity are hard to see. They are marbled all through the economy." Sugar subsidies, for example, benefit one percent of sugar farmers while raising costs for everyone else.
Slower economic growth is attributable in part to the rise of transfer-seeking. The growth of subsidies make the deficit hard to control, since subsidies and tax breaks tend to last forever. Consequently, government can't quickly correct its mistakes, so it has a hard time alleviating problems. "Even the most promising policies and programs cannot be made to work when you lack the flexibility to fail, adjust, and try again...Yesterday's innovations have become today's prisons...dinosaurs that will not die."
Rauch dismisses popular reforms proposed to fix bloated and inefficient government, namely term limits, and restrictions on campaign donations and on lobbying. Even if they could be adopted, none of them would make more than a marginal difference. That's because "the lobbies are us, and you can't isolate a democratic government from its own society." Rauch's prescription is this:
1) Adopt a zero-sum rule under which every addition must be balanced by an offsetting subtraction. To finance a new program, subsidy or tax break, Congress would need offsetting tax hikes or spending cuts. The GOP approach of opposing new taxes and reducing waste as a way to control spending hasn't worked since government can borrow. "The American public is like a glutton whose overeating makes his descendents obese."
2) Wholesale elimination of tax subsidies would make a difference. Round up as many tax expenditures as possible and "shove them all over the cliff together." Fewer tax breaks would allow lower tax rates, which gives wealthy taxpayers less incentive to seek loopholes. Every program should be evaluated by asking a question: "If the program didn't already exist, would we start it from scratch? If the answer is no, whet the ax."
Both liberals and conservatives have good reason to reduce clogged government arteries. To liberals, keeping the disease under control means government will be more effective at solving problems. To conservatives, controlling the disease means that archaic programs can be eliminated. With the disease unchecked, however, "government stays too big for conservatives and too inflexible for liberals. It neither solves problems nor goes away."
Both sides of the political spectrum have to take on their favorite allies and lobbies if progress is to be made -- something neither side is inclined to do. If sclerosis in government remains unchecked, government will steadily become more about last-minute crisis control, and less about anticipatory problem-solving. The "blame-someone else, don't-touch-mine mentality is self-defeating...The problem is not in any individual program or benefit-seeker, but in the collectivity of programs and benefit-seeking. And only in the collective can it be managed. It requires a broad, common agreement to limit transfer-seeking appetites -- a kind of arms-control pact for transfer-seekers."
Though Rauch is a lively writer, it's apparent that his advice has not been followed. What he calls the law of the parasite economy still obtains: "No matter who else loses, lawyers and lobbyists win."