President-elect Donald Trump has announced some surprising initiatives in the days since his election victory.
He browbeat Carrier Corp., a subsidiary of United Technologies, to keep about a thousand jobs in America, which probably would have been lost to a production facility in Mexico. He also threatened Ford Motor Co. with negative consequences if it went forward with plans to move some of its production to Mexico. He took a swing at Boeing for alleged cost overruns in the planned replacements for the jetliners that serve as Air Force One.
He has also announced that Masayoshi Son, the billionaire founder of SoftBank, plans to invest $50 billion in the U.S. economy, which is estimated to produce 50,000 American jobs.
I’m sure Carrier, Ford and Boeing all prize doing business with the U.S. government and are thus at a disadvantage to any threats from the next administration. In these arrangements, Trump holds most of the cards.
However, his most difficult and daunting negotiations will not be with the leaders of multi-national corporations, whom he can browbeat and bully at will. His greatest influence problem will be with the federal bureaucracy.
He can pout and threaten all he wants and skilled bureaucrats are likely to find ways to thwart his plans. Since middle- and lower-level bureaucrats have civil service protections against being fired for cause, they are in a good position to defy any edicts from the incoming president.
I make that claim based on the experiences of past administrations, during which presidents have attempted to curtail the growth of the federal leviathan. In 1969, the newly minted President Richard Nixon ordered some ugly World War I-vintage buildings controlled by the Navy on the Washington Mall to be torn down. A year later, while traveling in the presidential limousine, Nixon noticed that the buildings he’d ordered razed were still standing. Some inquiries were made, and word got back to Nixon that, yes, the buildings would come down, but the functionaries who fashioned the reply wouldn’t say when.
The buildings finally came down, but only after a yearlong battle between the Navy Department and the White House.
Bureaucrats don’t need to openly defy a president. All they have to do is stall and conceal in the hope of attaining their goals.
Earlier this week, Washington Post reporters Craig Whitlock and Bob Woodward revealed that an internal Pentagon study detailing over $125 billion in bureaucratic waste at the Pentagon was suppressed by military bureaucrats, including Secretary of Defense Ashton Carter. If the existence of the report hadn’t been leaked to the Washington Post, we would never have known about it.
Scandals like those at the IRS, the Department of Veterans Affairs, the EPA and now the Pentagon, among others, are almost never resolved with the summary firing of the functionaries who created the scandals in the first place. Civil Service protection makes it almost impossible to fire anyone who is not a presidential appointee.
Gen. Eric Shinseki resigned under pressure as secretary of Veteran Affairs in May 2014 after medical scandals came to light at the VA. Does anyone really think Shinseki was the cause of the scandal or that he had any way of compelling bureaucrats to follow orders to clean up the mess?
Unlike in the private economy, as president, Trump will be less able to bring operating efficiency to the federal bureaucracy, by using his signature command: “You’re fired.”
