DAVID KERANS: State Sabotage and the U.S. Right: More to Come?
The following commentary is reprinted with permission from Russia’s Strategic Culture Foundation. Bold font appears in original article.
State Sabotage and the U.S. Right: More to Come?
© David Kerans (USA)
Source: Strategic Culture Foundation
October 2, 2010
As public policy, destroying the quality and morale of the federal workforce has been so obviously stupid it requires no elaboration here… What does require constant reiteration as we survey all this wreckage is that from the perspective of the right this is not a disaster; this is a triumph.
— Thomas Frank, The Wrecking Crew: How Conservatives Rule 
As much as eight years of misrule and scandal under George Bush may have soured the American public on Republican Party rule, a prolonged recession and moribund labor markets over the last two years have exhausted the country’s patience with the Democratic Party. The Obama administration’s silence on many key issues and half-baked reforms on others have discredited the Democrats with large swathes of young voters, non-party voters, and even trade unions. More or less by default, the Republican Party now stands ready to retake control of the House of Representatives and narrow the Democrats’ edge in the Senate in November’s mid-term elections. The Republican resurgence could rise still higher in the next four years, as Democratic Senators will have to defend 43 seats in elections, while only 22 Republican Senators will come up for re-election.
The Republicans’ resurgence in Washington is real, and will affect domestic and foreign policy, whether they unseat President Obama in 2012 or not. The Republicans’ exploitation of this resurgence, however, will surely diverge from their promises. Simultaneously shaken and energized by a groundswell of anti-government idealist allies grouped into the so-called “Tea Party”, Republican Party leaders have rewound and amplified their simplistic domestic policy platforms from the last 30 years. The Party’s new “Pledge for America” calls for lower taxes and smaller government (apart from the defense and security sectors, that is). The pose is eminently statesmanlike on its surface, of course. It trumpets defense of the private sector against government encroachment, elimination of wasteful government programs, emancipation of business from job-killing regulations, trust in Americans’ rugged individualism and self-reliance, etc., all in the service of a market-based economy destined to produce more wealth and truer democracy for all. If only that was all they had in mind.
Judging from the character of the Tea Party congressional candidates and the behavior of conventional Republican leaders, we can fully expect them to pursue an agenda far more rightwing than a simple promotion of the free market. Namely, we can foresee them pressing to continue the deliberate mismanagement and vandalism of the state that began under Reagan and intensified under George W. Bush, where the overarching principle is the promotion of the interests of the wealthiest layer of Americans. As we shall see, three decades of degradation have left the state vulnerable to even more destructive measures now, with potentially dire consequences.
A Commitment to Wholesale Mismanagement
The chief consequence of the conservatives’ unrelenting faith in the badness of government is… bad government. The one follows from the other not as happenstance but as a rule…”
— Thomas Frank, The Wrecking Crew: How Conservatives Rule 
Disaffection with the state is common to the business class everywhere. What distinguishes the American case is the ferocity with which the wealthy have denounced the state’s right to exist. The interruption of the post-WWII economic boom in the 1970s gave the right the opportunity to scapegoat the state and promise salvation in the form of drastically lower taxes. They explained away the prospect of massive budget deficits that critics foresaw resulting from slashing tax rates, by invoking their now infamous “supply-side” economics, wherein the economic growth that was presumed would follow from the reduction of tax rates and regulations would soon suffice, they insisted, to generate more tax revenues than the current fiscal regime.
Supply-side economics was a hoax. Lower tax rates and reduced regulations on business could not stimulate so much economic growth as to replace the revenue lost to those lower tax rates, and its creators secretly knew that. The idea, though, was deeper than the economics. The right’s leaders had prioritized not the soundness of policy, but the destruction of the liberal, interventionist state so as to enshrine the hegemony of corporate power. To this end, they relentlessly spread the gospel that government was always wasteful, that market forces always made for efficiency, and that the private sector should take over as many functions as possible at the expense of the state, through the outsourcing or surrender of these functions. The state’s agencies, furthermore, should be made to serve capital, the repository and representative of market forces.
Pulverizing the State
“All the people with institutional knowledge, who know how to do stuff, have taken early retirement. Very few of the old pros are left in. The whole domestic government will have to be rebuilt, because it’s been hollowed out.”
–- Hugh Kaufman, EPA Senior Policy Analyst, c.2007
The regimes of the past 30 years have made startling strides on the right’s program to decimate the state. Reagan wasted no time in degrading state agencies by appointing sworn enemies of specific agencies to head them, and flooding departments with political allies who had no experience in government. He then shaved federal employees’ pay, with the aim of demoralizing the civil service and dissuading quality people from choosing careers in state organizations. The gap between private sector and federal pay jumped from just 10% in 1975 to an estimated 30% by 1987, and kept rising thereafter. George W. Bush’s administration intensified these tactics during his presidency, handing all important posts to representatives of business interests, and famously pressuring agencies to produce findings consistent with the administration’s desires, even on matters of scientific fact. Hugh Kaufman’s despair, cited above, captures the mood across much of the federal bureaucracy.
As destructive as the measures detailed above have been, they have not sufficed by themselves to deliver business interests from the accumulated and still growing body of regulations that inhibit their freedom of action on any number of issues, ranging from the handling of toxic waste to the language permissible in credit card contracts, etc. So, in a move of striking ingenuity, the Reagan administration rolled back the authority of all regulatory bodies by establishing an agency empowered to review regulations, the OIRA (Office of Information and Regulatory Affairs). Appointing a free-market conservative to lead OIRA, Republican administrations have used it to challenge, delay, weaken, or cancel whatever regulations they see fit, as a favor to business interests (especially those that contributed to Republican electoral campaign funds, naturally). George H.W. and George W. Bush each took steps to entrench and embolden OIRA, which has become something like a supra-governmental anti-agency, able to disturb or even paralyze the work of any other agency that interferes with the corporate powers-that-be.
Conservatism, as we know it, is a movement that is about greed, about the “virtue of selfishness” when it acts in the marketplace. In right-wing Washington, you can be a man of principle and a boodler [practice corruption—DK] at the same time.
— Thomas Frank, The Wrecking Crew: How Conservatives Rule 
Since a genuine extermination of the state is impractical, the U.S. right has inevitably gravitated to the idea of shearing off state functions and handing them to private industry. Government outsourcing of functions to private contractors has a long history, simply because government does not have the expertise to handle all tasks. Under contemporary conservatism, however, outsourcing is a matter of anti-government, pro-market, pro-efficiency principle, to be embraced and maximized. The right’s enthusiasm is all the stronger for the fact that outsourcing provides enormous opportunities for corruption, especially after government agencies have been demoralized and put into the hands of cronies.
Characteristically then, outsourcing assumed monumental proportions under George W. Bush, first and foremost in connection with difficult-to-scrutinize military and security operations. The reconstruction of Iraq functioned as a perfect Petri dish for the right’s principles on statecraft. Politicization was rampant, with leadership appointments going to free-market devotees; no-bid, no-restriction contracts for various projects proliferated. In place of the promised efficiencies of outsourcing, the Iraq experience generated colossal waste, perhaps 20% of the first $85 billion allocated for reconstruction. Already in 2005 watchdog organization Transparency International warned that the reconstruction of Iraq threatened to become “the biggest corruption scandal in history”. In a response symptomatic of the pathology, Bush’s General Services Administration – an outfit responsible for overseeing outsourced operations – actually tried to outsource the work of supervising contractors, “…allowing the market to perform its miracles without any scrutiny at all” notes Thomas Frank.
None of this could be otherwise. For, to the American right, corruption is no longer a function of opportunism, where a few people find a way to enrich themselves. To so many leaders of the right and the business class, corruption has become programmatic, a corollary to their disdain for the state. They respond not to the government corruption and waste they have so magnified with shame, but with a simple dare to society: if you want it to stop, just reduce the state to starvation, so there will be nothing left to plunder.
The View Ahead
Our account of the right’s assault on the state is by no means complete. In particular, we have not detailed the cynical strategy of blowing up federal deficits so as to cripple social programs and preclude significant funding for any new initiatives designed to support the population or the environment. Nor have we chronicled the Obama administration’s very modest progress in reversing the damage inflicted on the state in the last 30 years. We intend to return to these themes in the near future. For the moment, suffice it to say that the resurgent right is not at all “woefully short of ideas, let alone solutions”, as the Economist recently characterized it. It seems all too likely that the right’s assault on the state will continue, and that the movement has in mind to put social security, a primary function of the U.S. state, to the sword. The stakes will be high indeed.
 Thomas Frank, The Wrecking Crew: How Conservatives Rule, Metropolitan Books, 2008, p.140. Most of the present article issues directly from Frank’s findings and analysis.
 Frank, op. cit., p.139.
 David Stockman, Reagan’s own Director of the Office of Management and Budget, later admitted as much (David Stockman, The Triumph of Politics: Why the Reagan Revolution Failed, Harper Collins, 1986, p. 74–as cited in Frank, op. cit., p. 261).
 Quoted in Frank, op. cit., p. 136.
 Frank provides shocking figures and poignant examples (op. cit., pp. 132-33).
 The estimates (and the label “anti-agency”) are Frank’s; he also recounts how Clinton declined to reverse the damage in the 1990s (op. cit., pp. 133-34, 310-11). Measurements of the government-private sector pay gap are inevitably imprecise, as Frank freely admits. Most current estimates do not show government employees being significantly underpaid (see, e.g., my “Local Government Pain and Rolling Political Failure in the U.S.”, http://www.fondsk.ru, August 23rd, 2010, f.n. 14). Frank’s point is in any case valid: Reagan sent federal employee downward in comparison with the private sector.
 For a superabundance of examples, see, e.g. Jack Huberman, The Bush Hater’s Handbook, Granta 2004.
 A useful overview featuring regular updates is the Center for Progressive Reform’s “Eye on OIRA” website: http://www.progressivereform.org/eyeonoira.cfm
 Frank, op. cit., p.7.
 To give just one figure, in 2005 the Bush administration awarded $145 billion in non-competitive contracts, versus just $67 billion in the final year of Clinton’s administration, in 2000. Amanda Terkel, “Non-Competitive Federal Contracts Skyrocket Under Bush”, AmericanProgress.org, May 11th, 2007.
 “Marketplace: Spoils of War” radio reports (http://marketplace.publicradio.org/features/iraq/index.html); “Report: U.S. using Contractors in Iraq at Unprecedented Rate”, CNN.com, August 12th, 2008. For similar estimates, see coverage of a Democratic Policy Committee hearing in 2008: “Bush Asleep While Iraqi Fraud Funnels Millions to Al-Qaeda”, BobGeiger.com, September 23rd, 2008. Also noteworthy is Satyam Khanna, “Rice: No ‘American money’ in Iraq was lost to Corruption”, Think Progress.org, December 16th, 2008. Yes, Ms. Rice did actually say that. As of early 2010, cumulative allocations for the reconstruction of Iraq were nearing $150 billion (James Glanz, “New Fraud Cases Point to Lapses in Iraq Projects”, New York Times, March 13th, 2010).
 “Iraq ‘Facing Corruption Threat'”, BBC NEWS, March 16th, 2005.
 Frank, op. cit., p. 139.
 Frank draws this evolution sharply (op. cit. p. 252).
 Frank cites a variety of conservatives to this effect (op. cit., pp. 247-49, 343).
 Economist, “What’s Wrong with America’s Right?” June 10th, 2010.