Government’s Size Is the Real Scandal

Published April 25, 2012

In a nation struggling with record budget deficits, feeling outraged about a federal agency that spent almost $900,000 on a lavish, booze-soaked conference seems natural. And the public reactions will be just as natural: Congress will hold hearings, the Obama administration will swear “never again,” advocacy groups will send out pitches painting the administration as irredeemably corrupt, more people will lose their jobs, and, if crimes were committed, some will go to jail. The General Services Administration, which held the conference, will write new ethics guidelines and implement more stringent internal controls.

But it’s all for naught. For the GSA–and the government in general–such scandals are inevitable. Ending them is impossible, and even trying to do so tends to make an already top-heavy government even less efficient. It’s a problem inherent in having such a big government so deeply involved in people’s lives.

After all, this scandal inspires a sense of déjà vu. Barely two years ago, another federal agency–what was then called the Minerals Management Service–ended up under media, congressional, and public spotlights for a hard-partying culture that involved employees taking bribes, doing drugs, and exchanging sexual favors with employees of the companies it was supposed to regulate. That scandal, which came to encompass some of MMS’s actual duties, was actually worse than what seems to be have gone on at GSA. And before that were the millions of dollars the disgraced former lobbyist Jack Abramhoff lavished on allurements such as golf junkets for federal employees in return for official acts. And so forth.

Regrettable as these scandals are, they were all newsworthy precisely because they’re not all that common. Although it’s possible and desirable to stop government officials from committing crimes on the public’s time, simply spending money, even tax money, in a foolish fashion isn’t a crime. (If it were, just about everyone would have to go to jail.) And trying to prevent every potentially foolish decision just isn’t worth it for any enterprise inside or outside the government.

Every purchase decision involves dozens of explicit and implicit tradeoffs on price, convenience, and quality. Government procurement, despite some improvements in recent years, is still terribly burdensome and, in many cases, may involve spending thousands of dollars’ worth of employee time on “bargain shopping” that actually saves much less.

All sizeable government agencies already have inspectors general policing their activities and a roster of ethics rules far more complex than those in the great majority of private enterprises. For good reason, almost all operate far more openly than the typical private business. In this context, extreme measures such as banning all professional development events are likely to destroy agency morale and sap productivity for no good reason. In the case of GSA, indeed, it appears that dozens of existing policies were violated and no new rules are clearly needed.

Ultimately, some degree of corruption is inevitable given the government’s size. No enterprise that employs 2 million people and spends nearly $2.5 trillion a year could possibly do everything well. Making government run more efficiently, something everyone wishes for, isn’t possible if every move any federal worker makes has to be double-checked in a way that a private business never would.

Sure, simply making more rules might remedy the particular scandal at GSA. But such rules may make government’s overall inefficiency even worse. The bottom line is this: The size and scope of government is the real problem that needs to be solved.

Eli Lehrer ([email protected]) is vice president of Washington, DC operations for The Heartland Institute and national director of its Center on Finance, Insurance, and Real Estate.