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One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors. -- Plato (429-347 BC)

Friday, April 01, 2011

April Fool! Good Enough for Somali Pirates, Good Enough For Congress -- A Modest Proposal

by Ralph Benko, Contributing Author: Warning: This is an April Fool’s Day Column. It lays out a way to cut federal spending, by trillions, and how to get it done in months, not years. Washington Insiders who hear about this turn white with fear. You have been warned.

The solution: powerfully change the incentives for members of Congress. Treat our elected representatives as if they were human. Give them a huge bonus for getting the job done. It requires us, as JFK’s chair of the council of economic advisors, Walter Heller, once famously advised, to “Rise above principle and do what’s right.”

I’m sorry to reveal, but since you won’t really believe it, not too sorry: elected officials are just like you and me. And yet, we citizens yearn for heroes – superheroes, really. Our officials wish to satisfy that yearning. They erect awe-inspiring edifices like the Capitol Building. They grandiosely spend billions as if they were nickels found under the sofa cushions. They act in the epic fashion that we demand of them.

Some say that politicians are vain, shallow, creatures. This isn’t fair. Members of Congress tend to be smart, gregarious, somewhat idealistic, people who work ridiculous hours doing tedious, thankless, jobs. Few of them are so blackhearted as to destroy our illusions of them. It would be as if The New York Sun had said in its iconic 1897 editorial “No, Virginia, there is no Santa Claus.”

But, also, being a Member of Congress is not all trivial floor votes and rubber chicken dinners. It is the best gig most of these good folks ever had or can expect. Although their salaries are modest their perks are endless. Plus they get to be hometown heroes with, if lucky, a bit of national celebrity. Good gig.

In the final scene of "The Wizard of Oz" (a political allegory) the Wizard is revealed to be … a good man, just a bad wizard. That sums it up nicely. Officials are people.

Representatives are avid to hang on to their jobs. If they lose re-election they have to go out into the world and be a lobbyist, trade association official, even, the Horror!, lawyer. One cannot blame them for recoiling from that fate. So they ensure their reelection by saying yes, to everybody, especially powerful people, as often as possible. “Yes” often means spending lots of money. Our money.

We, the people, reward them for this. It’s sweet... in an odd way. Gallup shows we assign Congress an 11% confidence rating – while routinely re-electing our own Representative at something like a 98% rate. Mencken loved it:

"I enjoy democracy immensely. It is incomparably idiotic, and hence incomparably amusing. Does it exalt dunderheads, cowards, trimmers, frauds, cads? … Is it inordinately wasteful, extravagant, dishonest? Then so is every other form of government: all alike are enemies to laborious and virtuous men. Is rascality at the very heart of it? Well, we have borne that rascality since 1776, and continue to survive. In the long run, it may turn out that rascality is necessary to human government, and even to civilization itself -- that civilization, at bottom, is nothing but a colossal swindle…."

OK, good fun. But, Houston, we have a problem. Federal spending has become so profligate that it threatens to destroy America. Desperate times call for desperate measures.

Getting spending cut is simple. Shift the incentives. The simplest way to do this is to pay a truly handsome prize, one that well outweighs the officials’ craving for re-election. Think of Congress as akin to the Somali Pirates. Wired magazine did an analysis of the business model of the Somali Pirates:

"The rough fishermen of the so-called Somali coast guard are unrepentant criminals, yes, but they're more than that.

They're innovators. Where earlier sea bandits were satisfied to make off with a dinghy full of booty, pirates who prowl northeast Africa's Gulf of Aden captured ships for ransom. This strategy has been fabulously successful…"

Nobody considers paying ransom to pirates the “right” thing to do. Yet … if you are owner or insurer of a couple hundred million dollars worth of goods you pay the pirates who penetrate your defenses a few million rather watch $200M sink to Davy Jones’s Locker. Ransom: bitter, but practical.

If we the citizens actually wished to staunch the federal Niagara Falls of spending … we’d pay our Representatives a handsome bonus to get it right. We won’t. But it would work. We need to motivate just 359 people (a veto-proof majority) to cut the spending back to reasonable levels and lock it in.

There’s a market clearing price. There’s probably a law against it. But hey, they make and unmake laws up there.

Therefore this writer calls upon some wise American Oligarchs, um, Philanthropists (Hi Warren, hello Bill and Melinda) -- who already have committed to offloading their fortunes -- to put up, up to, a $63.5 billion bounty. That’s only about half of what they already have committed and 10% of what they are aiming to raise at givingpledge.org.

Each Member of Congress, and each Senator, would be given a $100 million prize for cutting federal spending to 18% of GDP. It’s a lot of money but less than many hedge fund managers, managing mere billions, not trillions, make.

To keep the problem from recurring — we don’t want the number of attacks skyrocketing —also they’d have to refer a really strong constitutional amendment to the States, keeping spending at 18% -- except in times of declared war. And constitutionally define war as a Big One to keep Congress from declaring it just to elude fiscal restraint.

Some might be persuaded for less than $100M. But a job is something like a bond, and the net all-in value of holding a Congressional seat, between salary, perks, staff and prestige arguably is worth close to $5 million a year. Capitalized at 5% that’s $100 million. Rather than quibbling over a tiny, one-time, fraction of our multi-trillion savings... let’s just get this done. At $100M even Dennis Kucinich might, bless his heart, take it. (You are free to donate most of it to People for the Ethical treatment of Vegetables, Sir.)

A Representative only gets her $100M if she, or he, votes for the cuts, and the Constitutional Amendment, does so within one session of Congress, and it is enacted. Hello Warren? Bill? Melinda? You’d look great on Rushmore.

Now almost all the incentives are to spend. Spending makes powerful friends. Cutting makes powerful enemies. They just want to keep their jobs! Shift the incentives decisively and the overspending will stop on a dime: welfare, warfare, all of it. Shhhh! They’re only human. People will object: it’s wrong to pay our officials what it takes to get them to do the right thing. To which this writer, probably alone, says: Huh? We’re going to let our civilization capsize instead?

Trust me on this. Or, better yet ... don’t. April Fool! Treat it as satire: it’s less painful.
------------
Ralph Benko is a senior economics advisor to The American Principles Project and author of The Websters’ Dictionary: How to Use the Web to Transform the World. He is working on a new book, called "A Golden Age: the political consequences of the peace."This article which first appeared as an opinion in the FoxNews was submitted to the ARRA News Service editor for reprint by contributing author Ralph Benko who you can follow on Twitter: @thewebster.

Tags: Ralph Benko, April Fool, government spending, Congress, To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!
Posted by Bill Smith at 1:22 PM - Post Link

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