Great article! The basic points are very good and true.
I've done many years work with the Australian Government (as a supplier of IT systems). Your system and ours are similar enough that I feel I can comment.
Corruption in the Australian (and I suspect US) civil service is rare and I never observed it myself. The civil servants I dealt with were usually well motivated and competent people. But I did observe an amount of waste (not slack) in Government.
A lot of the waste (not slack) is procedural and governance based. Governance processes are supposed to reduce waste and fraud, but they have unintended consequences. The demand to negotiate the lowest price on goods means that we often accept the lowest bidder, but the lowest bidder often turns out to be the bidder most adept at fudging project scope The net result is big cost overruns and contract variations. The insistence on fixed price contracts, which seems like a good way to constrain cost, means that a big risk premium is built into costings, and for reasons mentioned above, contract variations still occur anyway.
Another source of waste is just inertia. Department structures and procurement decisions end up being the fossilized history of the enthusiasms of previous governments. Sheer inertia plus external stakeholder self interest means that these programs and structures and decisions persist even though they are irrelevant to the current priorities and the money could be better spent elsewhere.
A quickie slash and burn exercise like DOGE was never going to solve these problems, because they are systemic. They are fixable, but only through diligence and cooperation between the political and bureaucratic players. Good government is a team sport and the 'government should be like a business' demand is moronic.
This is a great article, thank you! It addresses my two current pet peeves - "the government should be run like a business" and the short-sightedness of "just in time" (no slack) marketing, which seems to have spilled over into "just in time" for pretty much everything. Off topic, but on topic: sociopaths are unable to envision or plan for the future in ways that non-sociopaths do; they largely live in the moment. This mindset can result in terrible outcomes, when what they want in that moment is all they see, without any regard for the future. "I want it and I want it now" says His Majesty the Baby.
Fantastic article - you put into words something I have been thinking about since 1994 while in Public Health School watching Hillary Clinton’s Health Care Plan bite the dust.
Governments only waste money when they steal it -
contracts to friends for services never rendered
Etc - or apply wrong-headed economic theories onto the wrong project.
I work in a national health service but the bean counters have insisted on lean efficiency and value for money. That we run like a business. They have even introduced an internal market to introduce capitalistic competitive mechanisms to a sector that should be integrated and cooperative - like the army. Imagine if the Calvary was in financial competition with the Infantry!?!
We typically book clinics at 110 to 120% capacity in the hopes people will not show for their appointments but there will be no wasted time. Patients typically over attended and the doctors and nurses are burning out way earlier than their 67 year retirement age.
Hospitals are staffed to be full 100% of the time. Needless to say we have to cancel elective surgeries and care most winters to deal with the predictable surge of emergency care. Every health economist knows that a hospital runs most effectively at an average 80% capacity. This allows time for cleaning, rest, repair and flexibility.
The only thing that would make it worse would be to ration the care based on the individual’s ability to pay rather than by medical need. Hospitals would be full of patients having skin tags removed and nose jobs done rather than cancers removed and heart attacks treated. Sound familiar?
The problem with health is that we can do much more than we need to do most of the time. The cost of what we can do outstrips what we want to pay to do it. In all systems we don’t want to say enough is enough, you’re going to have some pain, some debility and some death in life.
Excellent article. I like the distinction between efficiency and slack. I have long argued that this distinction is important, especially when uncertainty is involved, and I can now reference this article.
I have also worked in government. In my mind, there are inefficiencies, but they are often the consequence of how things get done and the politics involved in doing them. The Fly America Act and government travel policies, for example, can be bewildering. Procurement is another example.
Excellent article (as usual). In Australia, we too have the mindset of running our universities as if they were businesses without anyone usefully being able to identify what universities' "products" are. (Even worse, there is another school of thought that says we should run a university the way we run a public service bureaucracy.) Designing redundancy in administrative structures is fundamental to good, swift, targeted and fuss-free service delivery.
I saw this article in my inbox and clicked read immediately. Again, another insightful read. Never even considered that POV about slack, efficiency, and government spending. I appreciate your articles because they always offer another way of thinking.
I disagree, i have worked at the EPA AND I have worked in private business. I can say without a doubt that my work with government was about 95%waste and 5% actual work. Thats why i left government. When you tax your most productive citizens so that they cannot thrive you have a system out of balance and out of touch with reality. This is where we have been for a very long time. Its so distressing to me. I understand there must be aervices. I understand that not everything is a money making model in the services and regulation of a government. But, when you have an unaccountable government there is going to be so much abuse that it drives the innovation and motivation out of the system. And here we arr.
Can you offer some examples of waste that are not either (1) debatable amounts of slack, (2) services that some people like and others don’t, (3) weird accounting artifacts, or (4) purchases that looked good up front but were bad only in retrospective judgment?
Fraud is what the dishonest applicants are committing (and the OIG occasionally actually prosecutes a few hundred a year who have successfully defrauded the process and received money). In Texas there were 2 OIG units in Dallas and Houston. They went defunct when local law enforcement stopped accompanying OIG staff on investigations and it was too dangerous to go out without them. The waste comes in when the regulations made by unelected bureaucrats over-wrote the legal definitions of disability to facilitate fraud. Government waste was the result. Waste of resources and taxpayer funds to pay fraudulent claims. Waste of time for the 1,230 Social Security Field offices inundated by those who know that there is virtually no oversight or interest in whether they are honest or not. As of now, Social Security is expected to be unable to pay full benefits as of 2035. Waste is giving tax money for purposes other than what it was legally supposed to be. Waste is permitting lawyers and judges to collude in stealing money from the taxpayers. Yes, a Kentucky lawyer named Eric C. Conn was involved in a massive Social Security fraud scheme. He and others, including a judge and a psychologist, were found guilty of defrauding the Social Security Administration (SSA) of approximately $550 million. Conn, who focused on Social Security disability cases, submitted fraudulent medical documents to obtain benefits for clients who were not actually disabled. We can quibble about whether Conn (!) etc. entirely wasted the money by supporting luxury cars and high-rate "escorts" but I am confident that my tax money was wasted. According to the Oxford Advanced American Dictionary, "waste" can be defined as the unnecessary or improper use of something...
I did contract work (licensed psychologist, specialty Developmental Disorders) for Social Security Disability. Your arguments are facile and contradicted by my 41 years of work in the government waste landfill. I was able to see the program devolve from helping the disabled who could no longer work to a bureaucratic cartel. in which the fish truly rotted from the top. Fraud was not just tolerated, it was encouraged. We little fish were compelled to ignore absurdities and "give the benefit of the doubt to the claimant." Social Security was bad but the records from VA could be even more absurd. In 2012, a 47 year old veteran was deemed 100% disabled by VA based on PTSD due to his Vietnam war experiences.* I know things were tough back then but he would have been ten (10) years old when that war ended. I was called by my chief to explain why I had refused to sign off on a case which had awarded disability to a 27 year old who was represented by her mom who claimed the daughter was so mentally delayed that she required constant care, like an infant. I found a tax report hidden away in volumes of records that showed she had 3 years of work at a pole dancer and also had 2 children. The case was taken off my assignments and signed out as proposed. I was told it was not my job to be a detective. These things happened every day. It was an income redistribution program facilitated by fraud and "regulations" issued by political hacks. In December 2022, 56,662 people were getting disability due to cancer (which can't be faked) and 600,722 were getting checks for "depressive disorders" that do not require a biopsy. I suggest you do a search for the "Murder of Rebecca Riley." a precious four year old killed by her own parents (and a complicit physician) in pursuit of a disability check.
You are offering cases of ostensible fraud. Fraud is not the same thing as waste, as I argue in my piece. Fraud is a form of dishonest taking; it is theft. If someone steals your money it is incorrect to say that you wasted it. The same is true if someone defrauds the government.
Great article! The basic points are very good and true.
I've done many years work with the Australian Government (as a supplier of IT systems). Your system and ours are similar enough that I feel I can comment.
Corruption in the Australian (and I suspect US) civil service is rare and I never observed it myself. The civil servants I dealt with were usually well motivated and competent people. But I did observe an amount of waste (not slack) in Government.
A lot of the waste (not slack) is procedural and governance based. Governance processes are supposed to reduce waste and fraud, but they have unintended consequences. The demand to negotiate the lowest price on goods means that we often accept the lowest bidder, but the lowest bidder often turns out to be the bidder most adept at fudging project scope The net result is big cost overruns and contract variations. The insistence on fixed price contracts, which seems like a good way to constrain cost, means that a big risk premium is built into costings, and for reasons mentioned above, contract variations still occur anyway.
Another source of waste is just inertia. Department structures and procurement decisions end up being the fossilized history of the enthusiasms of previous governments. Sheer inertia plus external stakeholder self interest means that these programs and structures and decisions persist even though they are irrelevant to the current priorities and the money could be better spent elsewhere.
A quickie slash and burn exercise like DOGE was never going to solve these problems, because they are systemic. They are fixable, but only through diligence and cooperation between the political and bureaucratic players. Good government is a team sport and the 'government should be like a business' demand is moronic.
This is a great article, thank you! It addresses my two current pet peeves - "the government should be run like a business" and the short-sightedness of "just in time" (no slack) marketing, which seems to have spilled over into "just in time" for pretty much everything. Off topic, but on topic: sociopaths are unable to envision or plan for the future in ways that non-sociopaths do; they largely live in the moment. This mindset can result in terrible outcomes, when what they want in that moment is all they see, without any regard for the future. "I want it and I want it now" says His Majesty the Baby.
Fantastic article - you put into words something I have been thinking about since 1994 while in Public Health School watching Hillary Clinton’s Health Care Plan bite the dust.
Governments only waste money when they steal it -
contracts to friends for services never rendered
Etc - or apply wrong-headed economic theories onto the wrong project.
I work in a national health service but the bean counters have insisted on lean efficiency and value for money. That we run like a business. They have even introduced an internal market to introduce capitalistic competitive mechanisms to a sector that should be integrated and cooperative - like the army. Imagine if the Calvary was in financial competition with the Infantry!?!
We typically book clinics at 110 to 120% capacity in the hopes people will not show for their appointments but there will be no wasted time. Patients typically over attended and the doctors and nurses are burning out way earlier than their 67 year retirement age.
Hospitals are staffed to be full 100% of the time. Needless to say we have to cancel elective surgeries and care most winters to deal with the predictable surge of emergency care. Every health economist knows that a hospital runs most effectively at an average 80% capacity. This allows time for cleaning, rest, repair and flexibility.
The only thing that would make it worse would be to ration the care based on the individual’s ability to pay rather than by medical need. Hospitals would be full of patients having skin tags removed and nose jobs done rather than cancers removed and heart attacks treated. Sound familiar?
The problem with health is that we can do much more than we need to do most of the time. The cost of what we can do outstrips what we want to pay to do it. In all systems we don’t want to say enough is enough, you’re going to have some pain, some debility and some death in life.
Excellent article. I like the distinction between efficiency and slack. I have long argued that this distinction is important, especially when uncertainty is involved, and I can now reference this article.
I have also worked in government. In my mind, there are inefficiencies, but they are often the consequence of how things get done and the politics involved in doing them. The Fly America Act and government travel policies, for example, can be bewildering. Procurement is another example.
Excellent article (as usual). In Australia, we too have the mindset of running our universities as if they were businesses without anyone usefully being able to identify what universities' "products" are. (Even worse, there is another school of thought that says we should run a university the way we run a public service bureaucracy.) Designing redundancy in administrative structures is fundamental to good, swift, targeted and fuss-free service delivery.
One could argue that in Australia the most important 'product' of a university is the VC's salary.
I saw this article in my inbox and clicked read immediately. Again, another insightful read. Never even considered that POV about slack, efficiency, and government spending. I appreciate your articles because they always offer another way of thinking.
Thank you!
I disagree, i have worked at the EPA AND I have worked in private business. I can say without a doubt that my work with government was about 95%waste and 5% actual work. Thats why i left government. When you tax your most productive citizens so that they cannot thrive you have a system out of balance and out of touch with reality. This is where we have been for a very long time. Its so distressing to me. I understand there must be aervices. I understand that not everything is a money making model in the services and regulation of a government. But, when you have an unaccountable government there is going to be so much abuse that it drives the innovation and motivation out of the system. And here we arr.
Can you offer some examples of waste that are not either (1) debatable amounts of slack, (2) services that some people like and others don’t, (3) weird accounting artifacts, or (4) purchases that looked good up front but were bad only in retrospective judgment?
Fraud is what the dishonest applicants are committing (and the OIG occasionally actually prosecutes a few hundred a year who have successfully defrauded the process and received money). In Texas there were 2 OIG units in Dallas and Houston. They went defunct when local law enforcement stopped accompanying OIG staff on investigations and it was too dangerous to go out without them. The waste comes in when the regulations made by unelected bureaucrats over-wrote the legal definitions of disability to facilitate fraud. Government waste was the result. Waste of resources and taxpayer funds to pay fraudulent claims. Waste of time for the 1,230 Social Security Field offices inundated by those who know that there is virtually no oversight or interest in whether they are honest or not. As of now, Social Security is expected to be unable to pay full benefits as of 2035. Waste is giving tax money for purposes other than what it was legally supposed to be. Waste is permitting lawyers and judges to collude in stealing money from the taxpayers. Yes, a Kentucky lawyer named Eric C. Conn was involved in a massive Social Security fraud scheme. He and others, including a judge and a psychologist, were found guilty of defrauding the Social Security Administration (SSA) of approximately $550 million. Conn, who focused on Social Security disability cases, submitted fraudulent medical documents to obtain benefits for clients who were not actually disabled. We can quibble about whether Conn (!) etc. entirely wasted the money by supporting luxury cars and high-rate "escorts" but I am confident that my tax money was wasted. According to the Oxford Advanced American Dictionary, "waste" can be defined as the unnecessary or improper use of something...
I did contract work (licensed psychologist, specialty Developmental Disorders) for Social Security Disability. Your arguments are facile and contradicted by my 41 years of work in the government waste landfill. I was able to see the program devolve from helping the disabled who could no longer work to a bureaucratic cartel. in which the fish truly rotted from the top. Fraud was not just tolerated, it was encouraged. We little fish were compelled to ignore absurdities and "give the benefit of the doubt to the claimant." Social Security was bad but the records from VA could be even more absurd. In 2012, a 47 year old veteran was deemed 100% disabled by VA based on PTSD due to his Vietnam war experiences.* I know things were tough back then but he would have been ten (10) years old when that war ended. I was called by my chief to explain why I had refused to sign off on a case which had awarded disability to a 27 year old who was represented by her mom who claimed the daughter was so mentally delayed that she required constant care, like an infant. I found a tax report hidden away in volumes of records that showed she had 3 years of work at a pole dancer and also had 2 children. The case was taken off my assignments and signed out as proposed. I was told it was not my job to be a detective. These things happened every day. It was an income redistribution program facilitated by fraud and "regulations" issued by political hacks. In December 2022, 56,662 people were getting disability due to cancer (which can't be faked) and 600,722 were getting checks for "depressive disorders" that do not require a biopsy. I suggest you do a search for the "Murder of Rebecca Riley." a precious four year old killed by her own parents (and a complicit physician) in pursuit of a disability check.
You are offering cases of ostensible fraud. Fraud is not the same thing as waste, as I argue in my piece. Fraud is a form of dishonest taking; it is theft. If someone steals your money it is incorrect to say that you wasted it. The same is true if someone defrauds the government.
"Headroom" sounds better than "slack", just sayin'. It must do; they use it to sell stereos! ;-)
I should have put in a Max Headroom graphic.